Tag: Pyxus International

Strong Quarter Pyxus

Photo: Pyxus Interantional
Pyxus International reported strong top and bottom line results for the quarter that ended Sept. 20. Net income was $8.1 million compared with a loss of $1.54 million in the comparable 2022 period. Sales and other revenues were $624.25 million during the quarter compared with sales and other revenues of $505.28 million in the second quarter of 2022.
“The momentum we built during the first quarter continued in the second quarter,” said Pyxus President and CEO Pieter Sikkel in a statement. “We delivered solid revenue growth, increased profitability, exercised operating discipline and continued to manage working capital efficiency.
Contributing to the company’s performance was a volume increase of 10.2 percent and an increase in average market prices of 11.7 percent over the same quarter last year. The increase in leaf volume was primarily due to the accelerated timing of shipments from North America and South America and growth from Africa and Asia. Pyxus considers the higher pricing to be a feature of a market that remains generally undersupplied. The company believes the undersupplied condition of the market is also evidenced by its success in seizing opportunities to capture additional business.
Buoyed by its quarterly performance, Pyxus revised its guidance for fiscal 2024 upward and now expects full-year sales to be in the range of $2 billion to $2.1 billion and for full-year adjusted EBITDA to be in the range of $170 million to $180 million.
November 14, 2023
Pyxus Exceeds Guidance for 2023

Pieter Sikkel | Photo: Pyxus International
Pyxus International reported sales and other operating revenues of $1.91 billion in 2023, up 16.8 percent from the prior fiscal year. Average gross profit per kilo increased 13 percent primarily due to product mix in Asia and customer mix in North America. Operating income increased $52.1 million to $93.8 million from the prior year. Net loss attributable to Pyxus International was $39.1 million, improving 52.4 percent from the prior fiscal year.
“Our teams achieved strong results for the fiscal year as we exceeded our most-recent adjusted EBITDA guidance, improved our leverage ratios, and aggressively managed our working capital to improve both our operating and free cash flow,” said Pyxus President and CEO Pieter Sikkel in a statement.
“We experienced the third consecutive year of La Nina weather patterns, which limited tobacco supplies and increased tobacco costs by as much as 50 percent in some of our markets. Inflationary tobacco costs, increasing interest rates, and lingering geopolitical issues added to a complicated crop year. We successfully overcame these challenges.”
“We offset reduced production in certain markets by sourcing tobacco from our global network of farmers around the world to meet our customers’ demand for sustainably grown compliant leaf in a short crop year. Uncommitted inventory at year-end was $19 million, which reflects the short-supply and high-demand environment we operated in during fiscal 2023.
Pyxus said it expects the momentum created this year to continue through fiscal year 2024. Current projections reflect a partial recovery of the tobacco supply compared to last year and continued strength in demand and pricing. For the full 2024 fiscal year, Pyxus expects sales to be between $1.9 billion and $2.1 billion and adjusted EBITDA to be between $155 million and $180 million.
June 6, 2023
A Gamble on Goobers

PAM Managing Director Ronald Ngwira (left) examines fuel pellets created with leftover shells from the company’s groundnut operations. | Photo: Taco Tuinstra
Pyxus has great expectations of its Malawi groundnut business
Like many of their customers, tobacco merchants in Malawi have been exploring supplemental lines of business—not only to ensure their future as cigarette consumption stagnates but also to help their contracted farmers develop supplemental sources of income.
Pyxus Agriculture Malawi’s (PAM) contracted tobacco farmers often cultivate nontobacco crops, including groundnuts, maize and sunflowers. Measured by weight, its growers already produce four times more food than tobacco. As part of its efforts to improve farmer livelihoods and the communities in which they live, Pyxus has been working to find markets for some of these crops.
The company has high expectations, especially for groundnuts, which are nutritious sources of protein, vitamins and dietary fiber. Among other health benefits, groundnuts are credited with preventing heart diseases, lowering bad cholesterol and improving fertility. Common products made from groundnuts include cooking oil, herbal supplements, butter and snack items. Groundnuts are also used as a source for animal fodder. There are three categories of groundnuts: the Hausa groundnut, the Bambara groundnut and the peanut.
Driven by consumers’ growing appetite for protein-rich and plant-based foods, global demand for groundnuts is increasing by 4 percent per year. Market Research Future projects the value of global peanut sales alone to reach $107.4 billion by 2030. Malawi has grown groundnuts for decades. “In the 1980s, Malawi used to be a big exporter to Europe,” says PAM Managing Director Ronald Ngwira. Currently, however, Africa is a net importer of groundnuts; global supply is dominated by Argentina, India and the United States. Malawi produces 447,421 metric tons of groundnuts—less than 1 percent of global cultivation.
A Good Match for Malawi
In addition to enjoying strong global demand, groundnuts are suited to Malawi’s conditions. Due to the country’s landlocked location, agricultural exports must travel long distances to ports in either South Africa or Mozambique. As a semi-perishable product, groundnuts are able to tolerate such journeys without requiring expensive cold storage.
What’s more, groundnut plants release nitrogen as they decompose, improving soil fertility and allowing farmers to reduce their fertilizer bill. Soil health has been a major concern in Malawi, where farmers struggle with high levels of acidity and insufficient levels of organic matter due in part to deforestation and less-than-optimal agricultural practices.
Another benefit: Leftover shells from Pyxus groundnut operations can be converted into fuel pellets and green charcoal, reducing the need to cut trees for firewood and potentially saving thousands of hectares of forest. This is a big deal in Malawi, where few people have access to electricity and the majority of the country’s rapidly growing population burns wood as fuel for cooking and energy. Wood is also used by farmers to build barns and cure tobacco. Industry typically relies on coal to fuel its activities. According to Ngwira, the use of groundnut shell-based fuel has already allowed Pyxus to reduce AOTM’s factory reliance on coal by 40 percent.
One challenge that has been holding back Malawi groundnut production is the quality of its plant varieties, which has constrained quality and productivity. To unlock the potential of groundnuts for Malawi, PAM has been researching better cultivars. Over the past few years, the company examined 1,000 strains from around the world. Looking for varieties that are high in protein, climate-change resilient and resistant to disease, PAM selected four types and presented them to the ministry of agriculture for approval. The company then invested in irrigation, mechanization and multiplication of the improved varieties to boost farmers’ yields and incomes.
Boosting Volumes and Quality
Tapping into its large network of tobacco field technicians, Pyxus also started offering extension services to groundnut farmers. “We have more than 150 qualified extension officers training farmers on a daily basis to assist farmers achieve better yields and quality while also ensuring track-and-trace capabilities to export into international markets,” says Ngwira. At 1 metric ton per hectare, average groundnut yields have traditionally been low in Malawi. With better cultivars, inputs and agricultural practices, however, it should be possible to increase those yields to 3 metric tons per hectare, according to PAM. Ngwira says the company will follow the same journey it took when implementing the integrated production system in tobacco, where years of farmer training resulted in substantially improved productivity and loan recovery rates.
PAM’s investments in groundnuts are paying off already. In 2021, Malawi’s government set the minimum selling price of groundnuts at MKW330 ($0.32) per kilogram. Owing to the quality produced by its contracted farmers, Pyxus was able to offer a minimum price of MKW440 per kilogram, according to Ngwira.
PAM is also tackling the problem of aflatoxins, poisonous carcinogens produced by certain molds that can impact agricultural crops. Historically, Malawi groundnuts have suffered from comparatively high levels of aflatoxins, but with better agricultural practices, such as quick drying to prevent the formation of fungi, it is possible to reduce contamination to below the tolerances prescribed by export markets.
In March 2022, PAM inaugurated a $3 million processing factory in Lilongwe’s Kanengo, where it not only cleans, shells and sorts the groundnuts but also turns the leftover shells into fuel pellets. Built in a disused tobacco warehouse, the facility employs more than 100 people and has the capacity to process 50,000 tons of groundnuts per annum. It is the largest groundnut shelling plant on the African continent outside of South Africa.
Addressing Malawi President Lazarus Chakwera and other dignitaries attending the opening ceremony, Ngwira noted that factory was key to unlocking Malawi’s potential for agricultural industrialization—which is in line with the government’s commitment to promote exports through value addition for agricultural crops.
Ngwira is excited about the prospects for Malawi groundnuts. In addition to growing demand from major markets such as China and India, there is also a huge appetite for the product regionally. “Currently, most Malawi groundnuts are exported to the Lake Victoria region,” he says. Already home to more than half a billion people, the area’s population is projected to grow significantly. “Malawi can help supply the protein to feed those people,” says Ngwira.
To cater to the anticipated demand, PAM aims to rapidly expand its contacted farmer base from about 7,000 smallholders at the time of the factory opening to about 30,000 in the future. In the process, it will not only create additional sources of incomes for its contracted farmers but also provide Malawi with a welcome supplement to tobacco as a source of much-needed foreign exchange.—T.T.
Taco Tuinstra is Tobacco Reporter’s editorial director.Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors.On his watch, Tobacco Reporter has won several awards for editorial excellence.Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.

June 1, 2023
Pyxus Announces Third-Quarter Results

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Pyxus International announced results for its fiscal quarter ended Dec. 31, 2022.
Sales and other operating revenues increased $226.7 million, or 52.9 percent, to $655.6 million for the three months ended Dec. 31, 2022.
Operating income increased $11.4 million to $41.6 million for the three months ended Dec. 31, 2022.
Net loss attributable to Pyxus International improved by $27.8 million to $2.3 million for the three months ended Dec. 31, 2022.
“We are excited to share our third-quarter results,” said Pieter Sikkel, president and CEO of Pyxus. “Our improved operating profit illustrates the company’s strong global performance in spite of a dynamic and complicated crop year that was exacerbated by La Nina and inflationary pressures. Our results evidence the progress the company made year-over-year in several ways and would not have been possible without the dedication and contributions of our employees.
“We successfully utilized our global footprint to navigate the current tobacco supply shortage and meet our buying targets overall for fiscal 2023. Combined with continuing normalization of shipping schedules in North and South America and increased volume from Asia, the company delivered an increase of more than 50 percent in sales and other operating revenues year-over-year. This increase and higher utilization of the company’s securitization programs resulted in cash flow from operations in the third quarter increasing by more than $100 million year-over-year. Some of these funds were strategically utilized to fully repay the outstanding indebtedness under the company’s ABL Credit Facility and provides the company with increased financial flexibility as we approach the next buying cycle.
“We anticipate the third quarter to be our largest sales quarter of the fiscal year due to more normalized shipping schedules. Based on our expectations for continued improvement year-over-year, we have revised our expected fiscal 2023 sales to be between $1.85 billion and $2 billion and our adjusted EBITDA expectations to be between $140 million and $155 million.”
February 15, 2023
Pyxus Makes Board Changes

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Pyxus International announced the resignation of Patrick B. Fallon, managing principal of Monarch Alternative Capital, from its board of directors and the appointment of two new members of the board, John S. Alphin and Patrick J. Bartels Jr., effective Jan. 18, 2023, according to a press release. The changes to the board result in an increase in the total number of directors from six to seven individuals.
“On behalf of the company’s board of directors, I thank Mr. Fallon for his guidance in redefining the company’s strategy, helping position the business for growth and long-term success,” said Pyxus President and CEO Pieter Sikkel. “I am pleased to welcome Mr. Alphin and Mr. Bartels to Pyxus’ board of directors and look forward to their strategic direction as we work to accelerate business growth, increase stakeholder value and together grow a better world.”
Alphin has 24 years of tobacco industry experience, including serving as a corporate director and head of global leaf sourcing for BAT. His areas of expertise include strategy and business development, generation of sales and operational efficiencies, navigation of complex, global supply chains and implementation of robust sustainability and corporate governance programs. Alphin will serve as a member of the Environmental, Social, Governance and Nominating Committee of Pyxus’ board of directors.
Bartels brings more than 20 years of experience in the financial sector and currently serves as a managing member of Redan Advisors. He previously held positions with Monarch Alternative Capital, Invesco and PricewaterhouseCoopers. Additionally, Bartels has served as a director on numerous public and private boards and has experience in corporate governance, finance, capital markets and mergers and acquisitions. Bartels will serve as a member of the Audit Committee and chair of the Compensation Committee of the company’s board of directors.
January 24, 2023
Pyxus Appoints New Chief HR Officer

Fernanda Goncalves (Photo: Pyxus International)
Pyxus International has appointed Fernanda Goncalves as its new senior vice president and chief human resources officer.
Goncalves joins Pyxus with more than 20 years of global human resources and business experience, most recently serving as global HR head at Red Hat, an IBM subsidiary headquartered in Raleigh, North Carolina, USA. She has also held positions with multinational companies including BASF, Hamburg Sued and Ernst & Young.
Goncalves has a Master of Business Administration degree from Duke University in Durham, North Carolina; a master’s degree in supply chain management from Universidade Mackenzie in Sao Paulo, Brazil, and a bachelor’s degree in business management from the University of Salvador in Salvador, Brazil. In addition to her professional experience, Goncalves serves as a board member of the National Hispanic Corporate Council, working to promote diversity, equity and inclusion (DEI) strategies, talent acquisition goals and employer branding and talent strategies.
“On behalf of Pyxus and the board of directors, I am pleased to welcome Fernanda to the company,” said Pyxus president and CEO Pieter Sikkel in a statement. “During the extensive search to fill this position, we were impressed by Fernanda’s perspective on talent management and experience with HR strategy, DEI programs and organizational transformation. She has a clear passion for making the greatest impact through shaping the employee experience, coaching and developing leaders, and driving overall business success, which aligns with Pyxus’ purpose and business strategy.”
Reporting to Sikkel, Goncalves will serve as a key member of Pyxus’ executive management team. She will provide leadership to the company across several core functions and support its strategic priorities, including upholding its commitment to environmental, social and governance targets. Goncalves succeeds Laura Jones, whose last day with the company was Dec. 31, 2022.
“The board and I would like to thank Laura for nearly 24 years of leadership and dedication to the company,” said Sikkel. “She was integral in shaping the company’s culture and driving organizational growth and performance. It was a privilege to work with her, and we wish her success in her future endeavors.”
January 22, 2023
Pyxus Sales up by Third

Photo: Taco Tuinstra
Pyxus International reported sales and other operating revenues of $508.3 million for the three months ended Sept. 30, 2022, up 28.9 percent in the comparable 2021 period. Operating margin increased $21.6 million to $27.1 million. Net loss improved by $8.2 million to $1.5 million. Adjusted EBITDA increased 63 percent to $42.2 million.
“We are pleased with the results achieved during the first half of fiscal 2023, particularly our efforts to reduce supply chain complexities and increase operational efficiencies,” said Pyxus President and CEO Pieter Sikkel in statement.
“These efforts resulted in more normalized shipments in certain markets compared to the prior year. During the quarter, we increased sales and other operating revenues by $114.1 million, and operating margin improved by $21.6 million primarily due to increased demand and more normalized timing of shipments from Africa, Asia and South America.
“This enabled the company to utilize cash generated from increased sales in the quarter to refinance the Delayed Draw Term Loan Facility, repay a portion of the revolving loan facilities and fully fund the U.S. defined benefit pension plan.
“As of Sept. 30, 2022, our inventory increased $87.7 million compared to the prior year primarily due to higher green tobacco prices and processing costs in Africa and South America and delayed shipments from North America. Our processed tobacco inventory continues to be more than 90 percent committed to specific customers. The overall increase in inventory and our committed inventory levels for processed tobacco position us to meet near-term demand.
“The prevailing La Nina weather patterns continue to adversely affect the global supply of tobacco. Through our efforts to accelerate buying activities in certain key markets, investments we have made across the business, and engaging with customers in transparent dialogue regarding the impacts of La Nina and inflation on our business, we purchased sufficient volume to meet near-term customer demand and maintained our gross profit as a percentage of sales despite historic inflation.
“As we approach the second half of fiscal 2023, we are closely monitoring the market for crop inputs like fertilizer and taking steps to mitigate the near-term risk of supply shortages where possible. We continue to expect fiscal 2023 sales to be between $1.75 billion and $1.95 billion and adjusted EBITDA to be between $130 million and $160 million.
“We remain focused on driving stakeholder value as we accelerate our contributions toward a net-zero future and were recently awarded a Golden Leaf Award in the Best ESG Program category for our efforts to promote sustainable fuel production helping to mitigate deforestation. We received positive feedback from customers on our environmental, social and governance framework, specifically our strategic alignment with our customers’ targets, and look forward to increasing collaboration so that together we can grow a better world.”
November 12, 2022
Jamie Ashton Appointed to Pyxus Board

Photo: akub Jirsák | Dreamstime.com
Pyxus International has appointed Jamie J. Ashton to its board of directors following the resignation of Holly Kim, a partner of Glendon Capital Management. Ashton will serve as a member of the board’s audit and compensation committees.
Ashton is a senior vice president of Glendon Capital Management, which together with its affiliates is a significant shareholder of Pyxus.
“On behalf of the company’s board of directors, I thank Ms. Kim for her dedicated service to our company,” said Pyxus President and CEO Pieter Sikkel in a statement. “She was an active advisor in redefining the company’s strategy, and her valuable guidance has significantly contributed to our steady business performance over the past two years.”
“I am pleased to welcome Mr. Ashton to the board,” added Sikkel. “As a close colleague of Ms. Kim’s, Mr. Ashton has a deep familiarity with our company and we look forward to his direct contributions to our board.”
October 21, 2022
Pyxus Reports First Quarter Results

Photo: Pyxus International
Pyxus International reported sales and other operating revenues of $343.9 million for the fiscal quarter that ended June 30, 2022, up 3.2 percent over the comparable 2021 quarter. Net loss increased 27.8 percent to $14.7 million, primarily due to a $7.6 million decrease in income tax benefit. Adjusted EBITDA increased 17.1 percent to $17.3 million.
“As expected, our first quarter was consistent with the prior fiscal year, with increased demand and more normalized timing of shipments from Asia, partially offset by the timing of shipments from Africa and South America,” said Pyxus President and CEO Pieter Sikkel in a statement.
“As of June 30, 2022, our inventory increased $126 million compared to the prior year primarily due to higher new crop green tobacco prices and processing costs in South America, and accelerated new crop buying activities in certain key markets. In addition, our processed tobacco inventory continues to be more than 90 percent committed to specific customers.
“The overall increase in inventory and our committed inventory levels for processed tobacco position us to meet near-term demand and we expect to see stronger shipments in subsequent quarters in fiscal 2023, consistent with historical trends. Despite higher green tobacco prices and processing costs in South America, we were able to effectively manage our working capital to meet our purchasing goals for the current crop cycle.
“Crop sizes in certain markets in Africa, Asia and South America are below expectations due to the adverse impacts of prevailing La Nina weather patterns during the growing season, which has exacerbated supply shortages. We continue to engage with customers in transparent dialogue regarding the impacts of La Nina and inflation on our business. In response to these and other market dynamics, we accelerated buying activities in certain key markets, and continue to invest in research trials, local programs, and additional training for our global agronomy team to further support our efforts to maximize grower efficiencies and yield despite unpredictable weather patterns.
“We continue to expect fiscal 2023 sales to be between $1.75 billion and $1.95 billion and adjusted EBITDA to be between $130 million and $160 million. Moving forward, we are committed to recovering crop sizes, and aligning volumes in future years with customer expectations, as we work to deliver stakeholder value, and together, grow a better world.”
August 12, 2022
Pyxus Reports Progress in Fiscal 2022

Photo: Alliance One International
Pyxus International reported sales and other operating revenues of $1.64 billion, up 23.1 percent from the prior fiscal year. Gross profit as a percent of sales was 13.8 percent, compared with 12.1 percent in 2021. The net loss attributable to Pyxus International was $82.1 million, which improved 30.2 percent from the prior fiscal year despite $32.2 million of goodwill impairment in fiscal 2022.
The results presented for the prior fiscal year period reflect the periods prior to and subsequent to the company’s emergence from Chapter 11 proceedings.
Pyxus International attributed the increase in sales and other revenues to a 16.8 percent increase in kilo volume and a 7.5 percent increase in average price per kilo. The 16.8 percent increase in kilo volume was driven by larger crop sizes in Africa and increased market share in Africa, Asia and South America partially due to customers reversing their vertical integration in certain markets.
In addition, 21.1 million kilos or $178.3 million of shipments were delayed by the Covid-19 pandemic and customer shipping instructions from the prior year into the current year and was offset by similar volume of shipments expected in the current that has been delayed into next year in Africa, North America and South America.
The 7.5 percent increase in average price per kilo was primarily due to product mix having a higher concentration of lamina in Asia, Africa, and Europe, as well as customer and grade mix in Africa and North America.

Our employees worked diligently to successfully increase volumes and revenue compared to the prior year while continuing to navigate global challenges.
Pieter Sikkel, president and CEO, Pyxus International
“We are proud of the progress made by the business during fiscal year 2022,” said Pyxus’ President and CEO Pieter Sikkel, in a statement. “Our employees worked diligently to successfully increase volumes and revenue compared to the prior year while continuing to navigate global challenges, which largely stem from the ongoing impacts of Covid-19 and the unfortunate events in Ukraine.
“We continued to expand our customer relationships as customers sought solutions to reduce supply chain complexities and improve operational efficiencies. Expansion of these relationships, partially attributable to our environmental, social, and governance framework that we publicly announced in December 2021, increased our market share in Africa, Asia, and South America and contributed to a 16.8 percent increase in kilo volume compared to last year.
“Our efforts in fiscal 2022 to execute on our strategy to increase financing sources and working capital lines around the globe resulted in a new asset-based lending credit facility with PNC Bank in February 2022, which provides the company with an extended maturity date, reduced costs and increased potential borrowing availability. In addition, in June 2022, we entered into an agreement to amend our delayed draw term loan facility, which provides the company with an extended maturity date, reduced costs, and increased financial flexibility.
“In January 2022, we completed the exit of our cash-flow-negative cannabinoid operations. Our restructuring activities generated savings in SG&A, which contributed to a $55.9 million decrease in expense compared to last year. As a result, our SG&A expense has normalized and is consistent with levels prior to our investments to develop those businesses.
“For the full year, we expect fiscal 2023 sales to be between $1.75 billion and $1.95 billion and adjusted EBITDA to be between $130 million and $160 million as we anticipate increased demand for our leaf products, the continuation of Covid-related logistical challenges, and cost and price increases due to inflation.
“Maintaining farmer livelihood and a supply chain of responsibly sourced, sustainable, and traceable products remains a top priority as we engage with customers about the impact of inflation on the cost and price of tobacco going forward. Additionally, we have taken proactive measures to secure inputs for the next year, such as fertilizer and fuel, allowing us to remain focused on delivering stakeholder value as we work to grow a better world.”
June 15, 2022