CEE's leading winery Purcari reports 12% y/y advance of core revenues in H1

Bucharest Exchange-listed Purcari Wineries PCL (BVB: WINE), CEE's leading wine producer, announced its consolidated (group) revenue increased by 3% y/y to RON 165.9 million (EUR 34 mln) in H1, driven by a 12% growth in the core wine segment, while the waste recycling segment was discontinued.

The group's net profit rose by 15% y/y to RON 29.3 mln (nearly EUR 6 mln) in H1, compared to RON 25.5 bln expected by Banca Transilvania financial group in a research report published on August 22.

WINE's market capitalisation was RON 642 mln (EUR 130 mln) at the end of August 21 (before the release of the H1 financials), after the price of its shares rose by 38% y/y. The dividend distributed from last year's profit resulted in a 4.06% yield.

"We delivered a robust quarter [...]. We are pleased to report improved profitability, with our gross profit margin reaching 51% in the second quarter. Despite the challenging consumer sentiment in our regions, we remain confident in the resilience of our business model and are committed to delivering value and growth to our stakeholders," said Victor Bostan, CEO of Purcari Wineries.

Sales growth coupled with an improved cost structure of packaging components and bulk wine spurred EBITDA and net profit in H1 to reach RON 55.3 mln and RON 29.3 mln, respectively.

Relative profitability improved significantly, with an EBITDA margin at 33% and a net profit margin of 18% in the first six months.

For H1, EBITDA and net income rose 24% and 15%, respectively.

Normalising for the discontinued Ecosmart business, thus excluding those profits from the reporting, the EBITDA rose 20% and net income 8% in H1.

Following the discontinuation of the Ecosmart line of business starting in Q2 2024 and challenging wine trade dynamics in the mass market segment, the group updates the annual guidance to a revenue growth of +5-10%, with the core wine sales up +15-20%. EBITDA margin is expected at 26-28% (33% in H1) and the net income margin at 14-16% (18% in H1).

(Photo source: Dreamstime.com)