Karelia Tobacco (KARE) Q3 2024 earnings summary

Executive summary

• Net profit after tax for the nine months ended 30 September 2024 increased by 11.5% year-over-year to €80.1 million (Group), with turnover up 10.9% to €227.2 million (net of excise tax and VAT).

• Third quarter saw strong sales volume growth in Greece, Bulgaria, Western Europe, and the Middle East, offsetting declines in Northern Africa.

• Gross profit margin declined in Q3 due to higher raw material costs, particularly tobacco.

Financial highlights

• Group turnover (net of excise tax and VAT) for 9M 2024: €227.2 million, up from €204.9 million year-over-year.

• Net profit after tax (Group) for 9M 2024: €80.1 million, up from €71.8 million year-over-year.

• EBITDA for 9M 2024: €90.1 million, up 8.95% year-over-year.

• Q3 2024 net profit before tax decreased 29.2% year-over-year due to negative FX differences, despite a 38% improvement in financial results.

• Basic earnings per share (Group) for 9M 2024: €29.00, up from €26.01 year-over-year.

Outlook and guidance

• No significant deviations expected from previous forecasts for the remainder of 2024, except for a favorable USD/EUR exchange rate post-US elections.

• Management highlights ongoing geopolitical volatility as a risk to global economic parameters.