Universal (UVV)2025-05-29 22:00Financial Data and Key Metrics Changes - For the fourth quarter of fiscal year 2025, sales and other operating revenue were 770.9 million in the same quarter of fiscal year 2024, primarily due to lower tobacco sales volumes [16] - Operating income for the quarter was 68.2 million for the same quarter in fiscal year 2024, also driven by lower tobacco sales volumes [16] - Net income attributable to Universal Corporation was 0.37 per share, down from 1.61 per share for the same quarter in fiscal year 2024 [17] - For the full year of fiscal year 2025, sales and operating revenue were 2.75 billion in fiscal year 2024, mainly due to higher tobacco sales prices [18] - Net income for fiscal year 2025 was 3.78 per share, down from 4.78 per share in fiscal year 2024 [19] Business Line Data and Key Metrics Changes - Segment operating income for the tobacco operations segment was 222.4 million in fiscal year 2024, driven mainly by higher sales prices [20] - Segment operating income for the Ingredients Operations segment was 3.9 million in fiscal year 2024, primarily due to higher sales volumes [20] Market Data and Key Metrics Changes - As of March 31, 2025, the net debt was 180 million lower than the previous year [21] - The estimated unsold flue-cured and burley stock was 22 million kilos as of March 31, 2025, up 11 million from December 31, 2024 [47] Company Strategy and Development Direction - The company focuses on three strategic pillars: maximizing tobacco operations, growing ingredients operations, and strengthening the organization [9] - The company aims to grow Universal Ingredients both organically and through measured acquisitions, leveraging its strong reputation for quality and service [11] - Sustainability is a core part of the business strategy, with a commitment to high standards and transparency in supply chain practices [25] Management's Comments on Operating Environment and Future Outlook - Management anticipates strong customer demand in fiscal year 2026, with global flue-cured production expected to increase by about 20% and burley production by about 30% [22] - The company is optimistic about the growth of its ingredients segment, having completed a major expansion project and focusing on organic growth [24] - Management noted that the investigation related to Mozambique has been completed and is not expected to have a material impact on financials [25] Other Important Information - The company declared its 55th annual dividend increase, with a quarterly dividend of 14 million [17] Q&A Session Summary Question: How should SG&A be viewed for fiscal 2026? - Management indicated that they cannot provide forward-looking guidance on SG&A but noted that fiscal year 2025 SG&A was about 5 million from the prior year, with various moving pieces affecting it [32] Question: Will there be ongoing legal expenses related to the Mozambique situation? - Management confirmed that the Mozambique investigation has been completed, and there will be no ongoing legal expenses related to it [35] Question: What are the expectations for tobacco margins and growth in fiscal 2026? - Management acknowledged that as the market moves from undersupply to a balanced state, it is still too early to determine the exact impact on margins and growth, but they expect strong demand to continue [38][40] Question: What is the profit outlook for the Ingredients segment? - Management reiterated their long-term target for the Ingredients segment to achieve 10% to 12% of EBITDA, emphasizing the need to leverage investments made in capabilities and sales [50] Question: What are the plans for the share repurchase program? - Management stated that while the share repurchase program is available, they are currently prioritizing other strategic investments [74] Question: What is the outlook for interest expenses in fiscal 2026? - Management indicated that they aim to bring interest expenses down due to improved working capital management and a more normalized buying season in Brazil [75]