Universal Corporation reported yesterday that its net income for the nine months to the end of December was $75.1 million, or $2.94 per diluted share, compared with $73.4 million, or $2.63 per diluted share, during the same period of the prior fiscal year.
For the third fiscal quarter to the end of December, net income was $45.4 million, or $1.78 per diluted share, compared with net income for the prior year’s third quarter of $53.6 million, or $1.92 per diluted share.
Net income for the nine months and third quarter included a one-time reduction in income tax expense of $10.5 million, or $0.41 per diluted share, resulting from the enactment of the Tax Cuts and Jobs Act in December 2017.
Operating income for the nine months to the end of December of $111.2 million was down by $7.3 million compared to that of the nine months to the end of December 2016. Operating income for the third quarter of fiscal year 2018 fell to $59.7 million from $83.2 million.
“As expected, our earnings from operations so far in fiscal year 2018 have been impacted by lower Burley crop volumes in Africa and fewer carryover crop sales in North America, offset in part by the return to normal crop volumes in Brazil, where we continue to see the benefits of higher volumes and lower factory unit costs,” said George C. Freeman, III, Chairman, President, and CEO. The Burley crop shortfall will predominately affect our third and fourth fiscal quarters when we typically ship African crops.”
Looking ahead, Freeman said Universal expected that its volumes for the fourth quarter of fiscal year 2018 would be lower than those achieved in the fourth quarter of the prior year, given reduced crop volumes available for sale in Africa this year, which typically had strong shipment volumes during the fourth fiscal quarter. “As a result, we continue to believe our total lamina volumes for fiscal year 2018 will be modestly lower than those volumes in fiscal year 2017.
“Looking forward, the next crop cycle, which will be reflected in our fiscal year 2019 results, has begun with green tobacco purchases in Brazil. The crop season is off to a good start, and assuming the recovery of African volumes and overall market stability, we believe that our fiscal year 2019 total sales volumes will be higher.”
Category: Financial
Universal looking forward
JTI volumes down in 2017
Japan Tobacco Inc. reported today that its domestic cigarette sales volume during the year to the end of December, at 92.9 billion, was down by 12.5 percent on that of the year to the end of December 2016, 106.2 billion.
JT said that the fall in volume had been due mainly to the contraction in industry-wide volumes caused by the expansion of the reduced-risk products category, and the continuing long-term market decline.
The industry-wide volume during the year to the end of December was given as 151.4 billion, down 12.9 percent from the volume recorded during 2016, 173.8 billion.
JT’s cigarette market share increased by 0.3 of a percentage point to 61.3 percent, year to year.
JT’s revenue during the year to the end of December, at ¥626.8 billion, was down 8.4 percent on that of the year to the end of December 2016, ¥684.3 billion, while core revenue fell by 9.1 percent to ¥590.6 billion as the cigarette sales volume decline offset the benefit of a Mevius-brand retail price rise last year, and increased sales of Ploom TECH, which rose above ¥10 billion. Core revenue excludes the revenue from distribution of imported tobacco on the domestic market, revenue from domestic duty-free sales, revenue from JT’s China business, and revenue from the sale of reduced-risk products such as Ploom TECH devices and capsules.
Adjusted operating profit during the year to the end of December fell by 10.7 percent to ¥232.3 billion, from ¥260.2 billion during the year to the end of December 2016. The fall in adjusted operating profit came about because of the lower core revenue and despite cost decreases having been made.
Meanwhile, Japan Tobacco International’s total tobacco (including cigarettes, fine-cut, cigars, pipe tobacco and snus, but excluding water-pipe tobacco, reduced risk products and contract manufactured goods) shipment volume during the year to the end of December, at 398.5 billion, was down by 0.1 percent on that of the year to the end of December 2015, 398.7 billion.
But JTI’s global flagship brand shipment volume was increased by 0.8 percent from 283.7 billion to 285.9 billion.
JT reported that JTI’s shipment was stable as industry volume contraction was almost offset by volume increases primarily in Iran and emerging markets, market share gains and acquisitions in Indonesia and the Philippines. Excluding acquisitions, JTI’s volume declined 2.1 percent.
JTI’s revenue during the year to the end of December, at ¥1,237.6 billion, was increased by 3.2 percent on that of the year to the end of December 2016, ¥1,199.2 billion, while core revenue rose by 3.4 percent to ¥1,177.0 billion.
Adjusted operating profit was up by 4.5 percent to ¥351.3 billion.
JT’s consolidated revenue for the year to the end of December, at ¥2,139.7 billion, was down by 0.2 percent on that of the year to the end of December 2016, ¥2,143.3.
Operating profit was down by 5.4 percent to ¥561.1 billion, while adjusted operating profit was down by 0.3 percent to ¥585.3 billion.
Masamichi Terabatake, president and CEO of the JT group said that the 2017 results demonstrated the group’s ability to deliver solid profit in an ever-challenging business environment.
“In my first year as CEO, I will focus on ensuring success in the domestic tobacco business, an essential driver for our future growth,” he said. “We will also continue to actively invest in both traditional tobacco and reduced-risk products with the ambition to hold the No.1 market share position in reduced-risk products in Japan by the end of 2020.
“I believe our management principle is well suited to achieve this sustainable profit growth in the mid- to long-term. We need to enhance our organization’s ability to face the competition by being faster and bolder across all our operations.
“We are confident that we can deliver mid to high single-digit annual average growth rate in adjusted operating profit at constant FX in the mid to long-term with our planned investments. Moreover, we are committed to growing the dividend per share year-on-year in line with mid-term profit guidance.”PMI to webcast results
Philip Morris International is due to host a live audio webcast at www.pmi.com/2017Q4earnings from 09.00 Eastern Time on February 8 to discuss its 2017 fourth-quarter and full-year results, which will be issued about 07.00 the same day.
During the webcast, which will be in listen-only mode, CEO André Calantzopoulos will discuss the company’s results, the outlook for 2018 and, with CFO Martin King, answer questions from the investment community and news media. The webcast will be in a listen-only mode.
The audio webcast can be accessed also on iOS or Android devices by downloading PMI’s free investor relations mobile application at www.pmi.com/irapp.
An archived copy of the webcast will be available until 17.00 on March 9 at www.pmi.com/2017Q4earnings.
Slides and script also will be available at www.pmi.com./2017Q4earnings.Universal to webcast results
Universal Corporation is due to webcast a conference call on February 6 following the release of its results for the third quarter of fiscal year 2018 after market close on that date. The conference call, which will be in listen-only mode, will begin at 17.00 Eastern Time and will be hosted by Candace C. Formacek, vice president and treasurer.
A live webcast of the conference call will be available online at www.universalcorp.com.
A replay of the webcast will be available at that site through May 6.
In addition, a taped replay of the call will be available from 20.30 on February 6 through February 20 at (855) 859-2056, using the telephone replay identification number 2686739.Tobacco revenue increased
The Philippines’ government is expected to generate about P183.2 billion in revenue from excise taxes on cigarettes and alcoholic beverages this year, according to a story in The Philippine Star citing data from the Department of Finance (DOF).
DOF figures indicate that P126.97 billion of the Bureau of Internal Revenue’s (BIR) income this year is projected to come from tobacco excise tax.
This would be 13.78 percent higher than the 2016 income from tobacco taxes, P111.59 billion.
The DOF projects that another P56.23 billion will this year be provided by alcohol excise tax.
This would be 9.90 percent higher than last year’s alcohol-tax revenue of P51.16 billion.
The increases in the excise tax revenues from tobacco and alcohol were said to have been brought about by the enactment of the Tax Reform for Acceleration and Inclusion Act.
Meanwhile, the BIR is gearing up for the implementation of a new revenue stamp system for tobacco and alcoholic products.
The finance undersecretary Antonette Tionko said the new designs for tobacco tax stamps and the newly-crafted tax stamp system for alcoholic drinks would be implemented within the first quarter.Altria to webcast results
The Altria Group is due to host a live audio webcast from 09.00 Eastern Time on February 1 to discuss its 2017 fourth-quarter and full-year business results.
Altria will issue a press release with its business results about 07.00 on the same day.
The webcast can be accessed at altria.com or through the Altria Investor App. Pre-event registration is necessary, and is available via directions posted at www.altria.com/webcasts.
During the webcast, which will be in listen-only mode, chairman, CEO and president, Marty Barrington, and CFO, Billy Gifford, will discuss the results and answer questions from the investment community and news media.
An archived copy of the webcast will be available on altria.com or through the Altria Investor App. The free app is available for download at www.altria.com/irapp or through the Apple App Store or Google Play.Relaxed over tax changes
Imperial Brands says that recently-announced changes to the US federal corporate tax rate are not expected to materially impact the group’s adjusted effective tax rate in the future.
‘The group benefits from substantial US tax amortisation of goodwill and intangibles which contributes to a relatively low adjusted effective tax rate,’ Imperial said in a note posted on its website yesterday.
‘For the year to 30 September 2018 we currently anticipate that the reduced taxation of US earnings will result in a benefit of less than one percent to the group adjusted effective tax rate. We continue to expect an overall adjusted effective tax rate for the group of around 20 percent.
‘The group’s US deferred tax assets and liabilities will be revalued to take account of the corporate tax rate changes. This is expected to result in a one-off credit of around £20m which will be treated as an adjusting item in the current year and will therefore not impact adjusted earnings.’BAT expects tax reduction
British American Tobacco has said it anticipates that, for the year to the end of December 2018, the changes brought about by the US Tax Cuts and Jobs Act would reduce the Group’s effective tax rate percentage to the high-twenties.
‘All other things being equal, this would result in a benefit of six percent to full year 2018 earnings per share, supporting our commitment to high single digit earnings growth and increased investment in the roll out of Next Generation Products,’ the company said in a note posted on its website today.
BAT said it noted that approval had been given for the new Act and said that it was continuing to work through the full impact it would have on the company. It said it would provide in February more details about that impact as part of its preliminary announcement for the year ended 31 December 2017.
‘For the year to 31 December 2017 the announced changes will have no impact on the Group’s underlying effective tax rate, which we have previously said we expect to be around 30 percent, BAT said. ‘However, we anticipate that the changes will result in a non-cash exceptional tax credit as a result of the revaluation of deferred tax balances arising from the acquisition of Reynolds American Inc. (RAI).’SEKAP’s future in question
The board of the Greek tobacco manufacturer, SEKAP, is due today to hold an extraordinary meeting to discuss the possibility of filing for bankruptcy, according to a story by Tasos Kokkinidis for Greek Reporter.
SEKAP, which is owned by the investor Ivan Savvidis, has been told by a Komotini Court of Appeal to pay a fine of €38 million for infractions that occurred in 2009, before Savvidis took over ownership of the company.
The daily newspaper Kathimerini apparently reported that board members would be joined today by Greek bankruptcy experts.
Savvidis owns a number of companies in northern Greece including the Makedonia Palace Hotel in Thessaloniki, the Souroti drinks company, and the PAOK soccer club.
Altogether, his businesses form part of a consortium that recently acquired a controlling stake in the Thessaloniki Port Authority, via his Belterra Investments company.
JT’s domestic sales tumble
Japan Tobacco Inc.’s domestic cigarette sales volume during November, at 7.0 billion, was down by 15.0 percent on that of November 2016, 8.3 billion, according to preliminary figures issued by the company today. The November 2016 figure was down by 3.5 percent on that of November 2015.
Volume during January-November, at 84.9 billion, was down by 12.1 percent on that of January-November 2016, 96.6 billion. The January-November 2016 volume was down by 2.7 percent on that of January-November 2015.
JT’s market share stood at 61.7 percent during November, at 61.2 percent during January-November, and at 61.1 percent during January-December 2016.
JT’s domestic cigarette revenue during November, at ¥42.0 billion, was down by 14.7 percent on its November 2016 revenue, ¥49.2 billion, which was down by 1.4 percent on its revenue of November 2015.
Revenue during January-November, at ¥505.2 billion, was down by 10.9 percent on that of January-November 2016, ¥566.8 billion, which was increased by 0.8 percent on its revenue of January-November 2015.
