Universal Corp. reported net income for the fiscal year ended March 31, 2020, of $71.7 million, compared with $104.1 million for the prior fiscal year. Excluding restructuring and impairment costs and certain nonrecurring items, net income declined by $25.3 million. Operating income was $126.4 million for the fiscal year, down from $161.2 million for the fiscal year ended March 31, 2019.
Results reflected earnings declines in Universal’s North America and Other Regions segments, partially offset by earnings improvements in the company’s Other Tobacco Operations segment.
“We could not have predicted that we would be closing out our fiscal year in the throes of a global pandemic,” said George C. Freeman, III, chairman, president and CEO of Universal.
“Uncertain market conditions, mainly driven by the ongoing Covid-19 pandemic, led to extreme weakening of the Indonesian rupiah, Brazilian real and Mexican peso relative to the U.S. dollar, all of which experienced double-digit depreciation during the month of March.”
These currency weaknesses were the primary drivers for unfavorable currency comparisons, according to Freeman.
“Towards the end of our fiscal year, we also saw some shipment delays in certain regions due to the Covid-19 pandemic and slower customer orders, which increased our uncommitted inventory levels,” said Freeman.
“In addition, as we have discussed throughout the fiscal year, our results for fiscal year 2020 have been negatively impacted by lower carryover volumes compared to fiscal year 2019, mainly in North America and Africa. Our gross margins for fiscal year 2020, however, remained relatively flat compared to fiscal year 2019.”
While some of Universal’s processing facilities experienced partial or total closures due to Covid-19, nearly all operations have resumed with measures to protect employees against infection, according to Freeman.
In related news, Universal declared a quarterly dividend of $0.77 per share, payable August 3, 2020.
“Today’s dividend increase is a milestone for our company,” said Freeman. “It is our 50th consecutive annual dividend increase, and we are very proud of this achievement. It represents the continuation of our strong record of returning value to our shareholders through our consistent dividend delivery. We have raised our common dividend every year since 1971.”
Universal’s annual meeting of shareholders will take place August 4, 2020.