Lower Shipments But Higher Prices Improve Alliance Profitability

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

Alliance One International reported yesterday that global demand for processed tobacco was strong during its first quarter to the end of June with average prices up by 24.6 per cent on those of the first quarter of last year. Price increases though, were offset by a 21.0 per cent fall in volume sales that was caused by declining global stocks and the timing of shipments. As a consequence, the company's sales for the quarter were down by 0.5 per cent to $459.2 million in 2008, but profitability improved. Net income of $15.3 million, or $0.17 per basic share, was up from $6.0 million, or $0.07 per basic share. CEO, Robert E. Harrison, said that while sales were essentially flat, gross profit, operating income and net income had improved because of the company's focus on, and execution of, programs that drove consistent operating performance. Looking forward, he added, as long as global stocks remained tighter and competition for those stocks remained keen, prices would continue to increase. "Despite the challenges of worldwide supply constraints, our well-developed global footprint and quality initiatives are competitive strengths that squarely position us to meet our customers' requirements, particularly in the face of further industry consolidation," he said. Enditem