Alliance sales down in third quarter

Alliance One International’s gross profit during its third quarter to the end of December, at $83.8 million, was up by 0.9 per cent on that of the third quarter to the end of December 2012, despite sales having decreased by 6.4 per cent to $654.6 million.

“Fiscal year 2014 is on track to experience improved volume and revenue versus last year, with continued focus on core operating income, driven by solid full service volume and strong demand for processing services,” said CEO and president, Pieter Sikkel.

“This is despite pricing to our customers that has not captured the full impact of increases in prices paid to farmers in certain markets, combined with some customers experiencing cigarette volume challenges.

“As such, for the quarter ended December 31, 2013, revenue decreased $44.6 million versus last year, to $654.6 million, impacted by an earlier Chinese New Year in 2014. “Even with these headwinds and $1.9 million of additional restructuring and asset impairment expense versus last year’s quarter, operating income improved 1.6 per cent to $50.1 million or an increase from 7.0 per cent to 7.7 per cent as a percentage of sales, mainly due to a more profitable product mix.”

For the nine months to the end of December, Alliance’s full service volumes, at 324.5 million kg, were increased by 4.8 million kg on those of the nine months to the end of December 2012.

At the same time average selling prices increased by 5.5 per cent to $5.16 per kg.