Q2 2021 Universal Corp Earnings Call

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Please be advised today's conference speaking recorded if you require any further assistance. Please spread sorry zero I would now like to have the confidence over to your speakers today is Kansas for music, the Vice President and Treasurer of Fusee. Thank you. Please go ahead.

Instead of taxation changes in exchange rates and interest rate industry consolidation in evolution and changes and market structure or sources. Finally, some of the information I have for you today is based on audited allocations and is subject to reclassification in an effort to provide useful information to investors our comments today may incur.

<unk> non-GAAP financial measures for details on these measures, including reconciliations to the myths comparable gap measures. Please refer to our current earnings press release.

Release, net income and diluted earnings per share declined by $23.9 million.93, respectively for the first half of fiscal year 2021, compared to the first half of fiscal year 2020.

For the first half of fiscal year, 2021, and by $98.9 million to $377 million for the three months ended September 32020, compared to the same periods in fiscal year 2012 on lower tobacco volumes and sales prices.

Turning to the regions.

Oh operations segment operating income of $11.6 million for the six months and $4 million for the quarter ended September 32020 reflected decreases of 6.4 million and $3.5 million, respectively compared to the same periods of fiscal year 2020.

We experienced slowdowns in both tobacco processing and receipt of customer orders for leaf tobacco due to COVID-19, we implemented social distancing requirements in our factories, which slowed output and increase the time to process certain tobacco crops.

Customer orders came in slower in part due to the absence of customer on site visits which necessitated the mailing a product samples prior to order confirmation.

Some customers have also requested shipping dates for their orders that are later in our fiscal year compared to.

The prior fiscal years.

Biden presidency, and may be a Republican Senate.

And and building the synergies amongst our.

Our companies in that sector.

22, and so that all looks positive in the net.

That's a strategy that we believe we can deliver.

Okay, and then fade smart-alec that business tracking versus your internal expectations. When you made the investment.

It's tracking slightly below what we had forecast for this year, partially because of covid.

Two months any anything you can share their.

Yeah listen I mean really follow it very closely supply and demand worldwide and she has in some areas. We have seen some negative impact in some areas. We have seen some positive impact so on the on the on the supply site as supply and demand. We believe right now on the fluke yard it is aledo a it's a.

Slightly oversupply in the flu and they barley ready stands right now it's imbalance, but if American blend cigarettes, continuing decline. We do believe that next year, we might have a slight oversupply on the on the on the bar at the site as well I think what is important here to mention is that this year the crops in general they came in a little bit.

Below where we expected that the biggie the beginning of the year, but he saw.

It also offer does the opportunity to bring our uncommitted inventory down and you have seen north I think it was what the two quarters ago, you had about 25% of all our inventory uncommitted right now we've got a level of 60%. So we are very proud you put a strategy in place and we achieve that just.

That's great Okay, Uhm I'd like to thank you.

Scenarios and training for Yahweh and it finds it down but down less than expected. So I would think.

A customer inventory might be getting worked off faster than expected, which I would think would be a positive Kevin <unk>.

Outlook keep your issue today your outlook for the crop.

I'm just curious on that point that can you help me with that it looks like our tobacco and Oriental tobacco, Okay. That's for.

Sure.

The dark dark tobacco visa just prospective is is very good then we have been investing in the right before the for the mess cigar business and for the premium. So you gotta be as in his but also in the accuracy got visual which was a large expansion on there and we have invested check what to get the last few years. So we do see a very positive there and on the.

Oriental sides, we believe right now it is more more or less in balance.

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Then comes from the line of Steve Moore, Russia of capital Securities. Your line is open hi, good evening everyone.

I'm just sort of a bigger picture question I'm, you know everybody's been concerned about corona and the effects negative effects, but what do you foresee happening to your business, assuming we get a.

Good vaccine and think the world returns to normal, but what what would be the likely scenario for your business.

Well I must admit that we've been operating pretty pretty well even with.

With all the restrictions in place so.

I guess I see is traveling a little bit more than we have in the past six months, but I think the business has not really been materially affected negatively by Korea.

Corona virus, so when the.

Threat received I don't see any material appreciation due to that.

All right.

Regarding silver I came in kind of late on the whole silver story, but have you guys quantified how much.

Revenues potentially could add have you guys broken that out.

And no we have not feed at this point in time, we have not done that and we are looking at and segment reporting for FCC purposes, and we hope that the additional information like that in the future for you with regard to the lateral.

Okay.

Then we had talked about the opportunity for that 10% to 20%. So I think that's the main figure that earning then out there I probably could it potentially best case scenario, adding 10% to 20% tier earnings down the road, yes, our new play into our platform. So that and we have made the statements Steve that we have reached.

Oh that goal by between 10, and 20% with <unk> acquisition of silver in fiscal year 22, Okay.

And then I was looking at your consolidated balance sheet numbers on page nine of the release.

And there was seem to be a bit of a job in terms of under the other assets. There is a decent job of 45 million and the goodwill and other intangibles.

Where did that come from.

Its fruits more.

Okay.

So that was the acquisition of fruits Marta.

Yeah I did the did the earlier jump or if you were looking year over year and a half Mark yeah. Yeah. That's I was asking about okay. That's it for me. Thank you very much I have a nice evening you too.

Again, everybody if you would like to ask a question. Please press star one on your telephone keypad.

We have no I'm sorry, we have a question from Chris we know of.

Very good Berman your line is open.

Okay and good evening.

I've a question on the overall tobacco market, which in the United States, which seems to be growing a little or declining less than it has in the past that.

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