Covid-19 Weighs on Universal’s Half Year

Universal Corp. reported net income of $14.8 million for the first half of fiscal year 2021, compared with $30.1 million for the same period of the prior fiscal year. Excluding certain nonrecurring items, net income declined by $23.9 million. Operating income was $24.9 million, down from $50.7 million in the first six months of 2019.

“Timing factors related to Covid-19 continued to impact our results in the second quarter of fiscal year 2021,” said George C. Freeman III, chairman, president and CEO of Universal, in a statement. “Our tobacco customer orders for crop year 2020 are strong, however, and the vast majority of these committed orders are packed awaiting shipment, with customer mandated shipment timing heavily weighted to our fourth quarter of fiscal year 2021.

“In addition, our uncommitted inventories have come down significantly from the levels at the end of fiscal year 2020 and are at 16 percent of tobacco inventories as of September 30, 2020, which is well within our target range.

“At this time, we believe our adjusted operating income for fiscal year 2021, excluding acquisitions, will materially exceed that of fiscal year 2020 barring any unforeseen events including shipment delays due to lack of vessel or container availability, port congestion, or Covid-19 related uncertainties. We are closely monitoring shipping conditions and currently expect to complete our scheduled shipments prior to our 2021 fiscal year end.”