Alliance on track as quality flue-cured and Burley steer towards undersupply
Alliance One International has reported net income for the second quarter ended September 30 at $18.4 million, or $0.21 per basic share, which compares with a net loss of $3.7 million, or $0.04 per basic share during the second quarter of last year. For the six months to the end of September, the company reported a net loss of $12.4 million, or $0.14 per basic share, compared with a net loss of $2.4 million or $0.03 per basic share for the first six months of last year.
“Fiscal year 2013 is on track to meet our expectations,” said CEO, Mark W. Kehaya. “Revenue for the quarter and first six months increased by $61.9 million and $58.1 respectively, to $576.4 million and $934.2 million versus last year.
“Additionally, for the quarter, income before taxes and other items significantly improved compared to the prior year from $11.2 million to $21.2 million, as we continue to see the positive impact of our efficiency improvements and devaluation of a number of foreign currencies versus the US dollar.
“We expect the full effect of the devaluation experienced over the year will more than offset derivative foreign currency hedge losses of $13.0 million realized in the first quarter and $13.3 million through the first six months of this fiscal year.
“Global supply has shifted to undersupply in flavor quality flue-cured and Burley leaf varieties and is moving towards equilibrium in other styles based on solid global demand and reduced crop sizes in a number of important regions.
“As a result, our global inventories decreased $52.1 million versus last year to $1,009.7 million and our uncommitted inventory is inside of the higher end of our target range and is expected to decrease significantly by fiscal year end.
“Our continued emphasis on investment in factory improvements, grower sustainability, social responsibility and farmer agronomy programs is providing required support to our customers’ global initiatives that are intertwined with their volume and quality requirements.
“Focus on our customer’s immediate requirements and our ability to address their longer term needs in a cost effective manner should provide a strong platform to enhance long term shareholder value.”
