Universal Corp. reported sales and other operating income of $2.1 billion in fiscal 2022, compared with $1.98 billion in fiscal 2021. Reported operating revenue was $160.3 million, an 8% increase over the revenue reported in 2021. The company's tobacco business contributed $1.84 billion in sales and other operating income in fiscal 2022, down slightly from the previous year.
George C. Freeman III, Universal's chairman, president and CHIEF executive officer, said in a statement: "I am proud of our fiscal year 2022 results, which were broadly comparable to our fiscal year 2021 results." "Many of our key tobacco regions continue to face an extremely challenging logistics environment in FISCAL year 2022. Strong performance in our ingredients operating segment offset some of the challenges of declining results in our tobacco operating segment.
"Our plant-component platform fused well and exceeded our expectations. With the acquisition of Shank's Extracts, we are now able to offer our customers a wide range of products, from fruit and vegetable juices, concentrates, and dehydrated ingredients to plant Extracts and flavorings. Demand for organic products increased in the Ingredients business segment in FISCAL 2022, with continued strong sales in the human and pet food categories and vanilla extract.
"We continue to see opportunities to increase market share and expand the supply chain services we provide to our customers."
George C. Freeman III George C. Freeman III is chairman, President and Chief Executive Officer of Universal Corporation
"Ongoing shipping restrictions reduced our tobacco business segment performance for the year and quarter ended March 31, 2022 as global shipping supplies continued to be constrained due to the COVID-19 pandemic. Due to logistics constraints in FY2021, we have carryover tobacco volumes and shipment in FY2022. Similar logistics constraints affected fiscal year 2022, resulting in higher tobacco volumes, reflecting a difference of approximately $70 million in revenue from no shipments in fiscal year 2022 compared to carryover volumes in fiscal year 2021. Tobacco shipments in FY2022 were also lower due to a reduction in burley crops in Africa.
"We experienced volatility in the Brazilian tobacco and money markets in the fourth quarter of fiscal 2022. The appreciation of the Brazilian currency combined with strong demand for tobacco leaves led to an unprecedented increase in the green price of tobacco leaves and the early purchase of the 2022 Brazilian crop, resulting in a disruption in the market dynamics. In order to fulfill the orders of our customers, when purchasing tobacco leaves from our contracted farmers this season, all tobacco leaves will be purchased at the then-high market price, regardless of the quality of tobacco leaves. This resulted in a larger inventory write-down for the quarter ended March 31, 2022 compared to the fourth quarter of last year.
"As we enter fiscal year 2023, we are seeing strong demand for our plant ingredients and tobacco products. We consider the supply of flue-cured tobacco, burley, dark air-dried tobacco and flavoured tobacco to be in an undersupply position. At the same time, we continue to see opportunities to increase market share and expand the supply chain services we provide to our customers. We expect our tobacco and ingredients businesses to continue to be subject to logistical constraints as well as higher costs, particularly freight, raw materials, labor, fertilizers and energy. We are actively working to mitigate these challenges.