In Q1, the company observed an increase in sales of 29%, increase in EBITDA of 37% and an increase in net income of 46.5%.
Purcari Wineries published their Q1 2019 report. According to it, sales amounted to RON 42.2m, representing an increase of 29% YoY. Such an increase could be attributed to the contribution of the Romanian and Polish market which grew by 34% and 49%, respectively. In Moldova, the company observed an increase in sales of 12%. When observing the product mix, the premium segment showed strong performance, with Purcari brand growing by 35%, due to dynamics in Romania. Furthermore, the company’s mid-price brand, Bostavan, increased by 41%, showing strong performance across key markets.
In Q1, Purcari observed a cost of sales of RON 22m, which represents an increase of 39.4%.
When observing the company’s SG&A, Purcari states that they continued to increase marketing investments, to build brand equity and seed future growth. As a result, marketing expenses increased by 24%, amounting to RON 3.3m. In total, SG&A amounted to RON 8.3m, representing an increase of 33%.
Going further down the P&L, EBITDA amounted to RON 13.9m, which represents an increase of 37% YoY. However, if we were to compare it to Q1 2018 adjusted EBITDA, which excludes IPO related expenses, it increased by 26%.
When observing the company’s net financial result, Purcari observed a decrease in loss of 8%, amounting to RON 1.7m.
In Q1, net income amounted to RON 8.7m, representing an increase of 46.5%. Such an increase could mostly be attributed to the above-mentioned high growth in the top line.
Performance (Q1 2019 vs Q1 2018) (RON m)
It is also noteworthy that in February 2019, the Group finalized the acquisition of assets owned by Vismos winery, including 263 hectares of vineyards and a production platform for primary winemaking, capable of processing up to 8,000 tons of grapes (the equivalent of around 5m liters of wine or 6.7m bottles). The acquisition, was structured as an assets purchase, paid for in two tranches with EUR 0.76m paid at closing and EUR 1.49m to pe paid by March 2020.