Universal sees opportunities for growth

Universal Corp’s net income for the third quarter to the end of December was $38.6 million or $1.36 per diluted share, up from $35.5 million or $1.25 per diluted share during the three months to the end of December 2012.

Segment operating income during the third quarter of fiscal 2014, at $74.6 million, was up by 18 per cent on that of the previous third quarter, on combined earnings improvement in every segment.

At the same time, consolidated revenues increased by 13 per cent to $767.8 million on higher overall volumes, mainly due to the current season’s larger African crops, partly offset by lower volumes in Brazil.

Meanwhile, net income for the nine months ended December 31 was $122.3 million or $4.31 per diluted share, compared with $106.6 million or $3.75 per diluted share for the same period of the previous fiscal year.

Segment operating income was $130.3 million for the nine-month period to the end of December, a decrease of $55.6 million from that of the nine months to the end of December 2012.

Revenues increased by two per cent to $1.9 billion for the first nine months of fiscal year 2014, on slightly lower volumes at higher prices.

George C. Freeman, III, chairman, president, and CEO said that one of Universal’s strengths was the ability to manage its business well in uncertain global markets.

“While it is still very preliminary, the current outlook for the 2014 crops, which will impact our fiscal year 2015 results, indicates increased production in some origins,” he said.

“At the same time, there are possible reductions in cigarette manufacturers’ needs due to lower cigarette sales in Europe and the United States. However, our uncommitted inventories remain at relatively low levels.

“Our focus remains on efficiently managing our business and positioning ourselves to meet the needs of our customers and suppliers while delivering consistent results to our shareholders.

“We believe that there are opportunities to grow our business by investing in projects that bring additional value and services to our customers.

“We continue to make good progress on the programs announced in October to expand our leaf production and processing capacity in Mozambique and to enhance production efficiency in several other origins…”