According to its latest available financial statement for the operating year 2014 (which covered the period between April 1, 2013 and March 31, 2014), AOI’s total sales and other operating revenues improved by 4.1% to US$1,487.3 million due to increased tobacco sales revenue.
Processing revenues were down 3.4% while cost of services increased 2.6% as a result of smaller crop sizes in the United States due to excessive rainfall.
Tobacco sales revenue and cost increases were mainly due to larger crop sizes in Africa, higher prices across all regions where the company is active (including Asia), the timing of shipments in North America, and product mix. Nevertheless, higher prices were paid to tobacco suppliers across all regions, which increased average sales prices but also cost per kilo. During the fiscal year ending on March 31, 2014, average costs increased US$0.39 per kilo while average sales prices only rose US$0.29 per kilo, which resulted in a gross margin decrease of 18.5% to US$134.5 million.
Gross margin as a percentage of sales declined from 11.6% to 9.0% during the same period. Mainly the result of lower gross margin, operating income also decreased 37.5% to US$47.1 million year-on-year.