AOI spreads its wings

As part of its One Tomorrow strategy, Alliance One International is continuing to make measured investments in industrial hemp, e-liquids and legal Canadian cannabis business lines as the company builds its capabilities to position them for further success in evolving regulatory and consumer environments, said president and CEO Pieter Sikkel in announcing AOI’s first quarter results.

‘Our industrial hemp joint venture, Criticality, LLC, (Criticality) is taking active steps to become a leader in the production of cannabidiol hemp oil (CBD) and related consumer products,’ Sikkel said. ‘We look forward to receiving and processing hemp at Criticality’s facility in North Carolina this fall.

‘Our e-liquids investments continue to demonstrate positive momentum. Last month, Fontem Ventures introduced Salt of the Earth, an additional product line that is a direct result of the relationship with our Purilum joint venture and utilizes Purilum’s premium nicotine salt e-liquids.

‘As October 17, 2018, the effective date for legalization of recreational cannabis use in Canada, draws closer, our Canadian cannabis subsidiaries are rapidly gearing up to meet expected consumer demand beyond the current legal medicinal market. As previously announced, construction work on an additional 310,000 square feet of greenhouse and warehouse space is underway as FIGR, our wholly owned indirect Canadian subsidiary, works toward its total goal of over one million square feet of production in that market.’

Sikkel said that the fiscal year had got off to a strong start and that AOI was building positive momentum in its leaf business and making continued progress on its One Tomorrow transformation initiative announced earlier this year.

He said that strong operating plans had been put in place, including ‘measured inventory reductions’.

‘We continue to optimize our global footprint and have taken steps to capitalize on opportunities in regional markets, further positioning our leaf business to meet the evolving needs of tobacco product manufacturers…

‘The investments we have made in agronomy services and our track-and-trace technology remain an integral component of all aspects of our business.

‘As our contracted farmer base continues to increase the yields of their non-tobacco crops, we are actively working to build the value-added processes that will support the diversification of their incomes.

‘By keeping the farmer at the center of everything we do, we are able to confidently provide customers across all of our business lines with sustainable and traceable agricultural products, ingredients and services.’

Alliance reported total sales and other operating revenues increased by 5.1 percent to $291.0 million as, it said, crops in South America and other origins returned to a more normalized cycle when compared to that of the same period of the previous fiscal year.
Gross profit increased by 44.8 percent to $41.4 million, and gross profit as a percentage of sales was 14.2 percent this year, up from 10.3 percent.

Operating income increased by $5.3 million to $4.7 million.

Net loss attributable to Alliance One International, Inc. for the quarter improved to $0.8 million, compared with $32.5 million last year, and adjusted EBITDA improved by 93.7 percent to $19.4 million.