Profit of Purcari Wineries drops in Q1 despite higher sales

CEE’s leading wine producer with operations in Moldova and Romania, Purcari Wineries - BVB: WINE, announced the group’s revenue grew by 11% in Q1 this year, reaching RON 81.6 million.

EBITDA rose by 9% y/y to RON 23.1 million in Q1, marking a margin of 28%.

The company’s net profit contracted by 15% y/y to RON 10.8 million (EUR 2.2 million) in Q1, resulting in a 13% net profit margin, down from 17% in the same period last year. The key element leading to the drop in the bottom line was the financial result. The results from operations increased by 9% y/y to RON 35.7 million.

The company’s market capitalisation was RON 590 million (EUR 118 million) on May 14, before the release of Q1 financials, after its shares rose by 53.7% y/y.

The company is paying this year a dividend that, at the current price of the shares, accounts for a 3.7% yield.

“We have had a good start of the year [...]. As inflationary pressures ease and the effects of the strong harvest in 2023 trickle in, we are seeing more headroom for improving margins,” commented Victor Bostan, CEO of Purcari Wineries.

The group anticipates the discontinuation of the activity of the EcoSmart Union, the waste recycling business, following the development of the national Guarantee Return System. Ecosmart accounted for circa 8% of revenues and 4% of EBITDA and Net Income in 2023.

The company revised its full-year forecast to revenue growth of +12-15% - lowered from +16-20%, reflecting Ecosmart adjustment. The revenue growth for the winery activity was maintained at +20-24%, while the projection for the EBITDA margin was also kept at 26-28%. The net income margin is seen as steady at 14-16%.

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