In announcing Alliance One International’s results for the fiscal year 2016, which ended on March 31, CEO and president Pieter Sikkel said, in part, that global leaf tobacco production would “decrease further this next year in line with the market tightening in various origins and qualities”.
“We will continue to monitor our customers’ evolving requirements and supply chain simplification strategies, while we further strengthen our operations, leverage our improved global footprint and step further up the supply chain.
“Some manufacturers’ partial vertical integration strategies continue to reverse as they seek to gain efficiency benefits and costs savings, while further leveraging compliant leaf merchants’ capabilities.
“These changes present opportunities for growth.
“We will continue to focus on enhancing best agricultural practices globally and further improve sustainability programs essential to our company, our customers and the local communities in which we operate.”
Alliance’s earnings per basic share were reported to have improved to $7.38, from a net loss of $3.16 last year.
Net income, which increased to $65.5 million from a net loss of $27.9 million last year, included a $106.2 million gain related to the reconsolidation of AOI’s Zimbabwe subsidiary at the end of the fourth quarter.
Adjusted EBITDA, which excluded the Zimbabwe subsidiary gain, remained consistent at $190.2 million, while as a percentage of sales it improved to 10.0 percent from 9.2 percent the previous year.
SG&A (selling, general and administrative expenses), which improved by 9.8 percent to $123.5 million driven by efficiency and cost reduction initiatives, included $8.6 million of Kenya-related legal and professional costs.