Alliance Believes Shift to Market Balance Beginning

Source from:  Tobacco Reporter 02/14/2012

Alliance One International reported net income of $11.8 million, or $0.13 per basic share, for the third quarter ended December 31. During the same period of the previous year, the company made a net loss of $2.0 million, or $0.02 per basic share. During the nine months ended December 31, net income of $9.4 million, or $0.11 per basic share, was down from the $32.1 million or $0.36 per basic share reported for the same period of the previous year. The nine month results to the end of December 2010 included a $37.5 million gain on the sale of Brazilian assets whereas the nine months results to the end of December 2011 included only a $13.1 million gain on the exchange of Brazilian assets. In announcing the results, CEO, Mark W. Kehaya, said the company believed its operational enhancements were delivering improved efficiencies and that fiscal year 2012 was on track with its expectations. "We have experienced significant shipment delays that caused our inventory to increase by $243.3 million to $1,063.3 million compared to last year while our uncommitted inventories are below the prior year. "We are confident that these shipping delays will correct themselves in the last fiscal quarter and that our actions should deliver improved revenue and profitability from operations for the full year when compared to last year with emphasis now on fourth quarter shipping. "We have a strong order book developing for next fiscal year and we have started purchasing the new crop in Brazil, which is smaller than last year. "Combined with reduced crop sizes in other regions we believe the shift back towards market equilibrium is beginning. "Our action steps to reduce costs have helped improve gross profit margin by 170 basis points compared to last year to 13.3 per cent of sales this quarter. "Further, SG&A decreased 9.4 per cent from last year to $33.9 million for the quarter. "Our strategic factory investments are reducing operating expenses and position our operations to handle increased volumes in future periods that should result from our enhanced business strategy as a low cost producer. "Additionally, we will continue to deploy capital where our customers see value in grower sustainability and social responsibility." Enditem