Leaf prices down on those of last year

Alliance One International made a net loss of $18.6 million during its first quarter to the end of June, a smaller net loss than was recorded during the first quarter to the end of June 2013, $36.9 million.

Gross profit increased by 23.2 percent to $35.1 million and gross profit as a percentage of sales climbed from 7.4 percent to 14.1 percent.

In reporting the results, president and CEO, Pieter Sikkel, said that the buying of green tobacco had been delayed by challenging weather in some regions and by global markets that had gone into oversupply.

“Market prices paid for green tobacco from suppliers have been generally lower than last year,” he said. “This is consistent with conditions highlighted at fiscal year-end 2014.

“The slow start reduced first quarter sales versus last fiscal year and is expected to have the same impact through the second quarter, but should normalize and result in similar full year revenue.”

During the quarter to the end of June, volume sales, at 47.7 million kg, were down by 37.5 percent on those of the quarter that ended on June 30, 2013.

At the same time, revenues declined by 35.1 percent to $249.0 million.

“As anticipated, gross profit increased 23.2 percent to $35.1 million and gross profit as a percentage of sales improved to 14.1 percent this year from 7.4 percent last year, primarily driven by improved operating performance,” said Sikkel.

“We expect improvement in gross profit and other profitability measurements to continue throughout the year…”