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Dec 31, 2020
Universal Corp Q3 2021 Earnings Report
Reported increased earnings per share and operating income driven by strong tobacco shipment volumes and strategic investments in plant-based ingredients platform.
Key Takeaways
Universal Corporation reported increased net income and operating income for the quarter ended December 31, 2020, driven by strong tobacco shipment volumes and the addition of businesses acquired in the Ingredients Operations segment. The company's strategic investments in its plant-based ingredients platform are expected to generate between 10% and 20% of EBITDA in fiscal year 2022.
Net income for the quarter ended December 31, 2020, was $33.3 million, or $1.34 per diluted share, compared to $26.0 million, or $1.04 per diluted share, for the prior year's third fiscal quarter.
Operating income for the third quarter of fiscal year 2021 increased to $60.2 million compared to $44.1 million for the three months ended December 31, 2019.
Consolidated revenues increased by $167.9 million to $672.9 million for the three months ended December 31, 2020, compared to the same period in fiscal year 2020.
Tobacco Operations segment operating income increased by $38.4 million to $84.1 million for the quarter ended December 31, 2020, compared with the same period for fiscal year 2020.
Universal Corp
Universal Corp
Universal Corp Revenue by Segment
Revenue by Segment
Tobacco Operations Revenue
CapyFin.comIngredients Operations Revenue
CapyFin.com Forward Guidance
The company anticipates adjusted operating income for fiscal year 2021 to materially exceed that for fiscal year 2020, barring unforeseen events such as shipment delays or COVID-19 related uncertainties. The new plant-based ingredients platform is expected to generate between 10% and 20% of EBITDA in fiscal year 2022.
Positive Outlook
- Strong tobacco shipment volumes expected to continue in the fourth fiscal quarter of 2021.
- Uncommitted tobacco inventory levels remain within the target range.
- Significant and strategic investments in the plant-based ingredients platform.
- Expect the new platform will generate between 10% and 20% of our EBITDA in fiscal year 2022.
- Opportunities to increase market share and enhance leaf tobacco businesses.
Challenges Ahead
- Potential shipment delays due to lack of vessel or container availability, port congestion, or COVID-19 related uncertainties.
- Ongoing international competitor pricing pressures.
- Operating and growing our businesses during the pandemic has not been easy.
- Slower processing of products due to controlled staffing in facilities that could lead to further delays of shipments to customers.
- Expect continued volatility in foreign currency exchange rates during fiscal year 2021.
Revenue & Expenses
Visualization of income flow from segment revenue to net income