• July 23, 2024

Product Mix, Demand Boost Universal Income

 Product Mix, Demand Boost Universal Income
Photo: Tobacco Reporter archive

Universal Corp. reported operating income of $153.8 million for the nine months that ended Dec. 31, up 20 percent over the comparable period in 2022. Tobacco operations contributed 148.9 million in income, 25 percent more than in the first nine months of the previous year. Universal attributed the performance of its tobacco operations largely to higher prices and a more favorable product mix, partially offset by lower tobacco sales volumes.

“Our tobacco business continued to perform very well, driven by a favorable product mix and strong demand from our customers,” said Universal Chairman, President and CEO George Freeman III in a statement.

“Improved margins, larger crops in Africa, and strong tobacco shipments in line with our expectations benefited our results in the nine months and quarter ended Dec. 31, 2023, compared to the same periods in fiscal year 2023.

“Global leaf supply for all types of leaf tobacco continues to be tight, and as of December 31, 2023, our uncommitted tobacco inventory was at a low level of 8 percent. While we expect global leaf tobacco supply to remain tight in fiscal year 2025, in part due to El Nino weather conditions, we believe the strength of our diverse global footprint will help us satisfy our customers’ leaf tobacco needs.”

Freeman also expressed satisfaction with the progress made by Universal’s ingredients business, particularly with the expansion of the company’s factory in Lancaster, Pennsylvania, USA, and the advancement in achieving Universal’s sustainability agenda. The company recently published its 2023 sustainability report and announced its participation in a solar project that it believes will help Universal reduce its operational greenhouse gas emissions by a third by 2030.