Karelia Tobacco (KARE) Q1 2024 earnings summary

Executive summary

• Net profit after tax rose 43.5% year-over-year to €29.3 million for the Group in Q1 2024, with turnover up 4.3% to €69.3 million (net of excise tax and VAT).

• Operating results (EBIT) remained stable at €26.3 million, while EBITDA increased slightly by 0.7% to €28.3 million.

• Profitability was boosted by higher interest income from cash reserves and positive FX differences due to US dollar appreciation.

Financial highlights

• Group turnover (gross) reached €319.1 million, up from €293.0 million year-over-year.

• Gross profit margin declined by one percentage point due to higher tobacco procurement costs.

• Earnings per share (basic and diluted) increased to €10.62 from €7.40 year-over-year.

• Cash and cash equivalents stood at €194.2 million at quarter-end, down from €211.8 million at year-end 2023.

• Net cash from operating activities was €2.4 million, with significant investment in financial assets during the quarter.

Outlook and guidance

• Management expects no significant deviations from previous forecasts, with slightly better sales volumes in the EU and Balkans.

• Market share gains noted in Bulgaria and continued sales growth in France, Spain, and Portugal.

• Persistent high raw material prices and international inflation are expected to continue impacting costs.

• No seasonality in production or operations.