Flue-cured output to rise
The chairman, president, and CEO of Universal Corporation, George C. Freeman, III, has predicted that global flue-cured tobacco production outside China will increase by about nine percent in the fiscal year to the end of March 2018.
This increase would largely stem from the recovery of the Brazilian crop due to better weather conditions, he said.
At the same time, Burley production would decrease by about eight percent, primarily due to reductions in Africa.
In presenting Universal’s annual results to the end of March, Freeman said it was too early to determine whether additional purchases made by customers in fiscal year 2017 might impact their requirements in fiscal year 2018.
Net income for the fiscal year ended March 31 was $106.3 million, down from $109.0 million in fiscal year 2016, while operating income of $178.4 million was down $3.3 million.
Segment operating income, which excludes non-recurring items, was $188.5 million in fiscal year 2017, up $2.4 million from that of the previous year; a rise that was primarily attributable to improved results for the company’s North America segment, partly offset by a decline for the Other Tobacco Operations segment.
Revenues of $2.1 billion for fiscal year 2017 were said to have been ‘relatively flat’ as slightly higher volumes and a benefit from earlier receipt of distributions from unconsolidated subsidiaries were offset by lower green leaf costs and lower processing revenues.
“I am pleased to announce that Universal delivered solid results again this year despite supply headwinds, most notably from the weather-reduced crop sizes in Brazil and ongoing challenging market conditions in Tanzania,” said Freeman.
“Although we had anticipated ending the year with slightly lower volumes, earlier shipment timing as well as attractive green prices in some origins resulting in some additional purchases by our customers boosted shipments later in our fiscal year, allowing us to improve our market share and achieve lamina sales volumes that were slightly above those of the prior fiscal year.”
