Alliance One International, Inc. (AOI) Reports Q1 Loss of $2.58
Alliance One International, Inc. (NYSE: AOI) reported Q1 EPS of ($2.58), versus ($2.12) reported last year. Revenue for the quarter came in at $263.8 million, versus $249.02 million reported last year.
Pieter Sikkel, President and Chief Executive Officer said, "Global markets are still in oversupply with some regions beginning to tighten. Market prices paid in U.S dollars for suppliers' green tobacco have again been generally lower this year, and conditions highlighted since the end of fiscal year 2014 when global oversupply was building have continued. We anticipate that oversupply will further correct through the current crop cycle. Despite global oversupply and reduced average sales prices, our sales for the first quarter improved 5.9% versus last year to $263.8 million primarily due to increased volumes shipped from South America and enhanced customer demand for Asian products. South American and African markets have been delayed by 4 to 6 weeks this year mainly related to weather. As a result, we have experienced a slow start that is expected to improve through the year with sales building each subsequent quarter and resulting in improved full-year revenue and adjusted EBITDA when compared to last fiscal year.
"Gross profit decreased 2.6% to $34.2 million and gross profit as a percentage of sales also decreased to 13.0% this year from 14.1% last year, driven by Brazilian Real hedging expense, change in product mix, customer processing requirements and the weather-related delay in crop timing. Mainly as a result of changes in Brazilian Real/U.S. Dollar exchange rates versus our hedging plans, gross profit this year included $1.4 million of foreign currency hedging expense, compared to $2.1 million of foreign currency hedging gains last year, or a $3.5 million change. Benefits from Brazilian Real depreciation versus the U.S. dollar that resulted in hedging expense in the first quarter are expected to be recognized as current Brazilian crop purchases and inventory are sold through later this fiscal year.
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