Festi (FESTI) Q4 2023 earnings summary

Executive summary

• Q4 sales of goods and services rose 11.0% YoY to ISK 35.235bn; EBITDA increased 37.3% to ISK 3.148bn and net profit rose to ISK 975m from ISK 708m.

• FY sales of goods and services reached ISK 136.3bn, up from ISK 121.4bn; EBITDA rose 9.9% to ISK 11.015bn, while net income fell to ISK 3.438bn from ISK 4.082bn.

• FY revenue was reported at ISK 138.4bn, up 11.8%; results exceeded final 2023 EBITDA guidance of ISK 10.4–10.8bn, supported by stronger subsidiary sales and cost controls.

Financial highlights

• Q4 margin from sales was ISK 8.109bn, up 18.0% YoY; margin rate increased 1.4 percentage points to 23.0%.

• Q4 EBIT was ISK 2.052bn, up 34.3% YoY; EBT was ISK 1.187bn, up 42.1%.

• FY gross profit was ISK 30.7bn versus ISK 27.0bn; EBIT increased 5.1% to ISK 7.053bn, while EBT decreased 16.2% to ISK 4.136bn.

• FY EPS was ISK 11.31 versus ISK 13.19; return on equity was 10.0%.

• Operating cash flow was ISK 9.414bn versus ISK 4.607bn; year-end cash was ISK 3.362bn versus ISK 2.112bn.

Outlook and guidance

• 2024 EBITDA guidance is ISK 11.2–11.6bn; planned CAPEX is ISK 4.4–4.8bn.

• Continued focus on operating expenses, operational optimization and lowering unit costs; Q4 margin rates improved across all sectors from Q3.

• Commodity prices were expected to remain high amid geopolitical conflict, while inflation was expected to decline as 2024 progressed.

• Completion of the Lyfja acquisition remained subject to Competition Authority approval, with a conclusion expected in Q2 2024.