Universal Corporation is scheduled to webcast a conference call on November 8 following the release of its results for the second quarter of fiscal year 2019 after market close on that day.
The conference call 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 on a listen-only basis at www.universalcorp.com, while a replay will be available at the same site through February 8.
A taped replay of the call will be available also from 20.30 on November 8 through November 22 at (855) 859-2056, using the telephone replay identification number 4048119.
Category: Leaf
Results webcast scheduled
ILO pressed on tobacco link
Government members of the International Labour Organisation’s (ILO) governing body have been told that the expiration in December of the ILO’s contract with Japan Tobacco International – the organization’s only remaining contract with the tobacco industry – creates an opportunity for the ILO to start afresh in 2019.
The advice comes in an open letter posted on the website of the Framework Convention Alliance and signed by about 100 ‘public health, development, human rights, and corporate accountability organizations’.
The letter states, in part: ‘While the world waits for the ILO to align itself with the 181 countries party to the WHO [World Health Organization] Framework Convention on Tobacco Control (FCTC), at this 334th Governing Body meeting [scheduled for today], we, the undersigned organizations, respectfully request the following decisions be adopted:- No longer accept any funding from the tobacco industry including corporations profiting from tobacco and ancillary groups that receive tobacco industry funds, in accordance with the UN model policy;
- Implement the integrated strategy using Regular Budget Supplementary Account funds in the short term;
- Work closely with relevant UN agencies, e.g. FAO, UNDP, to assist tobacco farmers and workers to find alternate livelihood; and
- Allow current contracts with the tobacco industry to expire, do not negotiate for the renewal of expired contracts, and do not establish any new contracts with the tobacco industry or its proxies.’
The full version of the letter is here.
ZYN factory going up
Swedish Match’s snus shipments in Scandinavia during the three months to the end of September, at 66.6 million cans, were increased by about eight percent on those of the three months to the end of September 2017, 61.7 million cans.
During the same periods, shipments of moist snuff in the US were down by about six percent to 31.7 million cans, while shipments of snus and nicotine pouches outside Scandinavia were increased by 97 percent to 6.9 million cans.
Swedish Match’s share of the Swedish snus market was down by 2.2 percentage points to 63.2 percent, while its share of Norway’s snus market was down by 1.1 percentage points to 51.0 percent.
The company’s US cigar shipments during the three months to the end of September, at 427 million pieces, were increased by about five percent on those of the three months to the end of September 2017, 405 million pieces.
During the same periods, the company’s chewing tobacco shipments, excluding contract-manufacturing volumes, fell by about seven percent to about 1,526,000 pounds.
Swedish Match reported that, in local currencies, sales increased by 10 percent for the third quarter, while reported sales increased by 16 percent to SEK3,388 million.
Also in local currencies, operating profit from product segments (excluding other operations and larger one-time items) increased by 13 percent, while reported operating profit from product segments increased by 19 percent to SEK1,317 million.
Operating profit amounted to SEK1,305 million, while profit after tax amounted to SEK959 million.
Earnings per share increased by 32 percent to SEK5.55.
In presenting Swedish Match’s three-month and nine-month results, CEO Lars Dahlgren (pictured) said that the company had delivered another quarter of very strong financial results. Sales and operating profit in local currencies had increased for the two largest product segments, snus and moist snuff, and Other tobacco products, while the Lights product segment had had a relatively stable year-on-year performance.
‘Snus and moist snuff product segment sales grew by 12 percent and operating profit increased by 17 percent in local currencies, with strength coming from both our Scandinavian snus business and our snus and nicotine pouches outside Scandinavia,’ he said.
‘Both the Swedish and Norwegian snus market grew at a robust pace compared to the prior year. In particular, we noted an acceleration of category volume growth in Sweden. Intense competitive activity and product innovations within the premium segment have been positive for the development of the snus category. We also believe that the exceptionally warm summer contributed to higher snus consumption this year.
‘The changeover to plain packaging in Norway has gone smoothly, but it is still early to assess if there will be any longer-term category implications.
We estimate that total Scandinavian snus market growth, measured on a volume basis, was close to seven percent during the quarter. On balance we are relatively pleased with the performance of our more recent product introductions in the Scandinavian snus market, but overall our portfolios have lagged category growth in both Sweden and Norway during the quarter. Despite the loss in market share, we estimate that the underlying (excluding V2 Tobacco and Gotlandssnus) volume growth for our Scandinavian snus business reached four percent, a strong growth rate relative to historical levels.
‘For international snus and nicotine pouches, we have now for two consecutive quarters reported positive operating results, stemming from strong volume growth for ZYN, improved pricing, and reduced marketing spending for US snus.
‘With the acquisitions of V2 Tobacco, and more recently Gotlandssnus, we have expanded our portfolio to include a range of unique snus products that not only provide growth opportunities in Scandinavia, but also present an ability to expand our international snus portfolio. In September, we introduced V2’s Thunder Xtreme, a range of strong snus products in the US.
‘Construction efforts directed towards our new ZYN production facility in Owensboro, Kentucky, continue according to plan.
‘Other tobacco products (cigars and chewing tobacco) had another good quarter, with sales and profit growth in cigars more than offsetting declines in sales and profits for our US chewing tobacco business in local currencies.
Cigar shipment growth continued to be driven by our rolled leaf assortment despite the price increase taken earlier in the year.
‘Given the rapid growth within the rolled leaf segment, we are facing increasing challenges in securing certain tobacco supplies but we have implemented measures that we expect will improve the situation during the first half of 2019.
‘The acquisitions of V2 Tobacco and Oliver Twist (with their chew bags and tobacco bits) delivered positive contributions to both sales and operating profit…’Little profit in growing
Zimbabwe is forfeiting at least US$27 on every kg of unmanufactured tobacco that it exports, according to a story in The New Zimbabwe quoting the Finance Minister Mthuli Ncube.
Speaking at an investment conference in Switzerland last week, Ncube said that Zimbabwe was one of the biggest producers of leaf tobacco and that the bulk of what it produced was exported in unmanufactured form.
Zimbabwe’s more-than 100,000 growers had produced a record flue-cured crop this year of 252.5 million kg.
But the average price had gone down.
And the average price of about US$3 per kg for unprocessed grower tobacco and US$6 per kg for processed tobacco, compared with between US$30 and US$60 for tobacco cigarettes, Ncube said.
Therefore, by exporting unprocessed tobacco Zimbabwe was forfeiting at least US$27 per kg that could be accruing to the country.
The story said that Zimbabwe was looking for foreign direct investment to boost its economy so that it could become a middle-income country by 2030.Leaf price increased
The grower price for leaf tobacco produced during Japan’s 2019 harvest has been set at an average of ¥1,912.32 per kg for all leaf types, an increase of 1.33 percent on the 2018 price of ¥1,887.14 per kg, which was 0.51 percent up on the 2017 price of ¥1,877.57 per kg.
But the 2019 price has been set 0.40 percent lower than it was in 2015. The 2017 price was the same as that for 2016 tobacco, but the 2016 price was down by 2.2 percent on that of 2015, ¥1,920.10 per kg, which was up 0.71 percent on that of the 2014, ¥1,906.47 per kg. The 2014 price was the same as that of 2013 but up by 0.84 percent on that of 2012.
Japan Tobacco Inc. said yesterday that the Leaf Tobacco Deliberative Council (LTDC), chaired by Yoshio Kobayashi, had released its annual determinations for the domestic leaf-tobacco cultivation area and grower prices for 2019 in response to a proposal submitted by JT earlier in the day.
The Council was said to have been in general agreement with JT’s proposal, and determined that, in 2019, the domestic tobacco cultivation area should be set at 6,886 ha, a decrease of 4.8 percent compared to the contracted area of the previous year, which included inactive areas in Fukushima.
The domestic tobacco-cultivation area for 2018 was set at 7,436 ha, a decrease of 4.7 percent compared to the contracted area of the previous year.
The council went along too with JT’s price recommendation of ¥1,912.32 per kg for all leaf types.
The LTDC was described as a council that confers on important matters concerning the cultivation and purchase of domestically-grown leaf tobacco in response to inquiries by JT. It comprises no more than 11 members, appointed by JT with the approval of the Minister of Finance from among representatives of domestic leaf tobacco growers and academics.Jordan has growing ideas
Jordan is considering lifting its ban on the commercial cultivation of tobacco, according to a Roya News story citing an Al Ghad report and relayed by the TMA.
Tobacco cultivation has been banned in Jordan for the past 10 years, except in the case of small quantities for personal use.
Quoting an unnamed source at the Ministry of Health, Al Ghad, reported that the Government was considering allowing leaf cultivation for commercial purposes.
The Government had formed a committee, comprising representatives of the ministries of health, agriculture and trade-and-industry, and other organizations, to study the feasibility of such a move.Early plantings down
Zimbabwe’s farmers have so far put about 7,000 ha under flue-cured tobacco, a figure that is almost 50 percent lower than that recorded by the same time last year, according to a story in The Herald.
The latest weekly statistics from the Tobacco Industry and Marketing Board show that farmers have put 6,572 ha under the crop so far this season, which compares with 11,945 ha during the same period of the previous season.
The president of the Zimbabwe Commercial Farmers’ Union, Wonder Chabikwa, said the decline in tobacco hectarage was due to farmers being wary of the climatic conditions this season, with rainfall forecasts pointing to an El Nino effect.
“Tobacco hectarage this year is lower than that of last year due to farmers being cautious about the quality of the rainy season,” he said.
“They may decide to increase the hectarage after the first rains.”Growers told to diversify
Zimbabwe’s flue-cured tobacco growers are being encouraged to diversify into other high value export crops such as chia, oil seed and cigar tobaccos, according to a story in The Chronicle.
Although flue-cured tobacco is one of Zimbabwe’s major foreign currency earners, cigarette-tobacco consumption is seen as being under threat in some countries from products such as electronic cigarettes.
The Tobacco Industry and Marketing Board (TIMB) corporate communications manager, Isheunesu Moyo, said yesterday the promotion of chia production among tobacco farmers was meant to ensure growers had an all-year-round source of income.
Moyo said that farmers were being trained to grow chia and to engage in horticultural.
Chia, he added, was an ideal crop for diversification since its seeds were in demand abroad and it therefore had good potential as a foreign currency earner.
TIMB has had all its field and technical officers trained in chia production so that they can impart the necessary skills and knowledge to tobacco farmers.New factory for Azerbaijan
With Azerbaijan aiming to minimize the import of tobacco products, the tobacco manufacturer, Tabaterra, is to build a tobacco factory in the Sumgayit Chemical Industrial Park, about 30 km from the capital, Baku, according to an AzerNews story.
The factory is expected to have a capacity such that it will be able to meet the country’s total demand for tobacco products.
Meanwhile, Azertutun Ltd, part of the Azerbaijan Industrial Corporation (AIC), has estimated its 2018 production of leaf tobacco at 3,000 tons.
AIC director general Kamran Nabizade was quoted as saying that Azerbaijan had planned to produce 6,000 tons of tobacco this year, of which 3,000 tons would be accounted for by Azertutun.
The AzerNews story said that Azerbaijan was aiming to realise the potential of the leaf tobacco industry by increasing its competitiveness.
Azerbaijani President Ilham Aliyev signed a decree approving the State Program for the Development of Tobacco Growing in Azerbaijan for 2017-2021 on August 10, 2017.
According to the order, the State Program is aimed at developing tobacco production and processing, increasing profitability and export potential, and increasing employment in rural areas.
The state program is said to take account of all the factors necessary for the development of the industry.Cuba aims for big harvest
Cuban agriculture authorities yesterday said they aimed this season to harvest more than 34,000 tons of tobacco, despite the damage caused by Hurricane Michael to the crop in the western Pinar del Rio province, according to a Xinhua News Agency story.
The president of the state-owned Tobacco Business Group (Tabacuba), Justo Fuentes, said the company had signed contracts with tobacco farmers based on that figure, before adding that “the harvest must be higher in hectares, quality and yield this year”.
The tobacco season got underway in the central Sancti Spiritus province, Cuba’s second largest tobacco producing area, on Wednesday.
Tabacuba aims to plant more than 30,000 ha this season, which will conclude in the first months of 2019.
Meanwhile, work is underway to recover from the damage caused by Hurricane Michael in the Vueltabajo region of Pinar del Rio, where thousands of tobacco ha were damaged earlier this week.
Vuetlabajo, considered by some to be the world’s best tobacco producing region, provides about 70 percent of national tobacco production in Cuba.
The tobacco industry is Cuba’s fourth largest employer, providing permanent jobs for about 200,000 people. At its peak, a quarter of a million people are employed in the harvest.
In the 2017-2018 season, producers harvested about 30,000 tons of tobacco, 6,000 tons more than during the previous season.
