Bucharest-listed Purcari Wineries, one of the largest wine producers in Central and Eastern Europe (CEE), announced its sales rose by 9% year-on-year in the first quarter (Q1).

The increase came despite a nearly 50% plunge in exports to China in the same period, due to the COVID-19 epidemic.

Orders for April show moderate growth/flat trend, the company announced in a note to investors. The main drag on performance is the shutdown of the HoReCa segment, accounting for less than 15% of company sales.

The demand for wine has been holding well through the lockdown period, but the outlook remains volatile, according to the company's representatives.

"We suspend our guidance for 2020 until more clarity emerges of the new normal," the company told investors.

The stress tests carried by the company for downside scenarios show a comfortable safety margin: 29% EBITDA margin for the best-case scenario (6% drop in revenues this year) and 28% EBITDA margin under the worst-case scenario (18% drop in revenues). The EBITDA in absolute terms would shrink by 20% from 2019 under the best-case scenario and by 32% under the worst-case scenario.

Purcari Wineries announced on April 21 that five employees at its subsidiary Vinaria Bostavan in Moldova were hospitalized with suspicion of infection with the SARS-CoV-2 virus over the weekend. All production platforms, including Bostavan, are closed for Easter until May 4 - and will be thoroughly disinfected by then, the company assured.

"We will prioritize the health and safety of our employees, as we seek to find the right balance between protecting our staff and running our operations," the company said.

editor@romania-insider.com

(Photo source: the company)