Universal Working on Security of Supply

Source from:  tr.itsmyiq.com Aug 6, 2008 08/07/2008

Universal Corp is working with its customers and suppliers to ensure security of supply, a key issue for the tobacco industry, according to a statement by president and CEO, George C. Freeman III, that accompanied the release of Universal's first quarter results to the end of June. "We do not expect that current low levels of inventory available for sale will be drastically increased after this season's crops are complete, despite significantly larger Burley crops in Africa," he said. "The tight markets, combined with the weak US dollar and competition from alternative crops for farm acreage make controlling the cost of leaf a continuing and extraordinary challenge for us. We have been working to find the delicate balance between controlling cost and providing the required incentives to farmers." Universal's net income for the first quarter, at $21.1 million, or $0.64 per diluted share, was up from $18.7 million, or $0.54 per diluted share, the previous quarter. Revenues were up by 12 per cent to $506 million because of higher volumes, higher farm prices and the effects of the weak US dollar. The year-to-year improvement in first quarter results was said to be due to higher shipments in several countries, a lower effective income tax rate, and the absence of write-downs in Africa and restructuring charges. "The year has begun on a positive note. Our operations continue to be strong, and we have made significant operating improvements in Africa since last year," said Freeman. Meanwhile, Universal's board of directors has elected Freeman to succeed Allen B. King as its chairman with immediate effect. King had previously announced his intention to retire at this year's annual meeting and did not stand for reelection. He has been named chairman emeritus. The board elected also W. Keith Brewer to the post of executive vice president, COO. The board has declared a quarterly dividend of $0.45 per share on the common shares of the company, payable on November 10 to shareholders of record at the close of business on October 14. And it has declared a quarterly dividend of $16.875 per share on the Series B 6.75 per cent Convertible Perpetual Preferred Stock, payable on September 15 to shareholders of record as of 17.00 hours Eastern Time on September 1. Enditem