• March 29, 2024

Alliance volumes improved slightly

Alliance One’s sales and other operating revenues during the year to the end of March, at $2,354.9 million, were up by 5 percent on those of the financial year that ended on March 31, 2013.

The tobacco sales revenue and tobacco cost increases were said by Alliance to be mainly the result of larger crop sizes, higher prices and shipments delayed from the prior fiscal year.

“Volumes improved slightly with increased levels of South American byproducts and larger crop sizes in Africa offset by the change in sales from the investee operation in Thailand and the timing of Asian shipments, said Alliance in announcing its results.

“Reduced customer processing volumes in Brazil as a result of increasing green prices required by farmers throughout the buying season, delay in purchasing and processing the current Brazilian crop and smaller weather-related crop sizes in the United States led to reduced processing revenues and cost of services.”

Gross profit fell by 15.8 percent to $240.0 million and gross profit as a percentage of sales decreased from 12.7 percent to 10.2 percent, mainly due to the impact of higher green costs in multiple origins that were not fully recovered from customers, reduced processing and unrecovered farmer advances primarily in Zambia.

“Partially offsetting increased costs were lower derivative losses in Brazil net of increased exchange losses due to appreciating currencies in Africa this year, when compared to last year,” said Alliance.

“Selling, general and administrative expenses decreased 8 percent to $134.1 million when compared to the prior year, driven by lower incentive compensation and amortization related to internally developed software as well as reduced professional fees driven by lower monitor costs that will no longer recur.”

Other income decreased by 12.1 percent to $18.2 million primarily due to the net effect of the gain recorded on the sale of a Turkish warehouse, gain on the closing of the joint venture in Brazil, other asset sale gains, various costs and reduced loss on sale of accounts receivable.

“In comparison, last year, other income was $20.7 million related mainly to a non-cash benefit of $24.1 million recorded for Brazilian excise taxes based on a court ruling and higher loss on sale of accounts receivable,” Alliance said.