Universal Corporation believes that worldwide demand for Burley tobacco might exceed supply.
“We are currently forecasting worldwide Burley tobacco production levels for fiscal year 2018 of about 510 million kg, a reduction of approximately 13 percent from fiscal year 2017 levels,” said George C. Freeman, chairman president and CEO. “As a result, we believe that demand for Burley tobacco may slightly exceed supply.”
Freeman was announcing Universal’s results for the first quarter of fiscal year 2018, which ended on June 30.
Universal reported net income of $3.6 million, or $0.14 per diluted share, for the quarter. Those results were up $9.1 million from a net loss of $5.5 million, or $0.40 per diluted share, for the first quarter of fiscal year 2017.
‘Operating income of $6.6 million for the quarter ended June 30, 2017, improved $14.6 million compared to an $8.0 million operating loss for the quarter ended June 30, 2016,’ the company reported. ‘Similarly, segment operating income was $6.1 million for the first quarter of fiscal year 2018, up $14.3 million compared to the same period last year, mainly as a result of earnings improvements in the Other Regions segment, partially offset by earnings declines in the North America and Other Tobacco Operations segments.
‘Revenues of $284.6 million for the quarter ended June 30, 2017, decreased by $10.9 million, or four percent, on lower total volumes and a less favorable product mix.’
Freeman said that crop purchases were essentially completed in Brazil and were progressing well in Africa.
“Overall crop qualities are good,” he said. “We expect increased volumes in Brazil to continue to positively affect earnings throughout this fiscal year. At the same time, greater reductions than expected in Burley crop sizes in Africa and continued challenging market conditions in Tanzania will reduce our volumes sold from that region.”