In the first 9M of 2019, the Group recorded an increase in sales of 22%, increae in EBITDA of 20% and an increase in net profit of 15%.
In the first nine months of 2019, net sales of Purcari Group were up 22%, reaching RON 138.6m. Romania, Moldova and China contributed most to the growth in absolute figures, increasing 25% YoY, 18% YoY and 72% YoY respectively. The Group maintained double-digit growth in Poland, Ukraine and Belarus, with 19%, 21% and 23% sales increase respectively. In terms of product mix, the premium segment continued to show solid performance, with Purcari brand growing 32% YoY, mainly driven by dynamics in Romania and China. The Bardar, premium brandy brand showed solid performance as well, increasing by 25% YoY.
Cost of sales amounted to RON 69.34m, representing an increase of 22% YoY or RON 12.45m. As a result, the company recorded a gross profit of RON 69.34m, representing an increase of 23%. Meanwhile, the gross margin maintained at 50%, which came on the back of the good product mix dynamics and controlled personnel costs. On SG&A side, the Group continued increase of marketing investments, to build brand equity for future growth. To put things into a perspective, marketing and sales expenses amounted to RON 10.69m, noting an increase of 25% or RON 2.16m.
Total SG&A amounted to RON 39.07m, showing an increase of 26% YoY. Beside the mentioned marketing investments, general and administrative expenses witnessed a 17% increase or RON 2.64m. Also, in the first nine months of 2019, the Group recorded a provision for impairment loss on trade receivables amounting RON 1.09m, before its expected high season in Q4 2019. The management expects significant recovery of impaired trade receivables but decided to adopt a prudential approach in assessing market risks.
The Group’s EBITDA reached RON 46.2m, increasing 20% YoY. The adjusted to one-off IPO related expenses of 2018, EBITDA was up 17% compared to the previous period. The result from operating activities increased by 20% YoY, amounting to RON 39.27m. Such a result was positively influenced by above-mentioned gross profit growth and control over SG&A expenses, despite the recorded provision.
Going further down the P&L, the company recorded an increase in net financial loss by RON -1.95m, which at the end of nine months amounted to RON -5.12m.
In the 9M of 2019, net profit amounted to RON 29.41m, representing an increase of 15% YoY.
It is also worth mentioning that in early October, Lormier Ventures Limited, a wholly owned subsidiary of Emerging Europe Growth Fund II (managed by Horizon Capital) disposed of all or part of the shares through an accelerated book-building process. In the ABB, Lormier Ventures Limited sold 4.539.223 shares, representing 22.7% of Purcari’s share capital, which made them (as of 31 December 2018) the second largest shareholder, behind Amboselt Universal which owns 25.03%. To read more about it click here.
