Tobacco firm Alliance One International Inc. reported a 25.7 percent improvement in earnings in its second quarter, spurred by an increase in volumes despite difficult weather conditions.
The Morrisville-based company reported a net loss of $15.7 million, a $5.4 million improvement from last year’s net loss of $21.1 million. Losses per share for the quarter totaled to $1.75, a 26.1 percent increase from $2.37 reported in the same quarter a year ago.
Wall Street currently does not have any analyst estimates for Alliance One.
Revenue from its operations decreased 6.1 percent to $389.4 million for the quarter, mainly due to lower average sales prices and greater costs per kilo. Difficult weather conditions on its Brazilian crop and a stronger U.S. dollar also played a part in lowering sales.
“Offsetting some of our improvements were the challenges created by El Niño related wet weather in southern Brazil this year that has reduced gross profit by approximately $24.0 million versus last year,” said Chief Executive Officer and President Pieter Sikkel in a statement. He also mentioned the company expects El Niño to provide an ultimate $30 million negative impact to gross profit for fiscal year 2016.
The company also reported a $1.6 million of legal and professional costs for the incident that was uncovered in Kenya earlier this year, where some of its employees were found to be involved in fraudulent activity lasting over seven years.
Volumes, however, increased 4.7 percent to 88.8 million kilos in the second quarter, driven by an increase customer demand, profitable shipments from Africa and North America and booming sales in Africa.
“Our global team is motivated, and focused on strategy and plan execution that will improve our operations and enhance our position as the preferred global supplier,” said Siekkel. “We believe our balanced strategy is well measured and should improve shareholder value.”
The company provided no earnings guidance for the rest of the year.
Alliance One was founded in 2005 and currently operates as a global independent leaf merchant, operating over 50 manufacturing facilities worldwide.
Shares of Alliance One were trading at $1.90, up $1, or 6.29 percent, on the morning of Nov. 8.
The filing can be found here.

