In the fiscal year 2023, Purcari Wineries Group experienced a remarkable 22% year-on-year increase in revenues, reaching RON 370 million.
The Romanian market emerged as a powerhouse, driving a 35% surge and constituting 58% of finished goods sales, while Moldova witnessed a modest 4% uptick, rebounding from pandemic-induced challenges. Sales in Poland stagnated as the Group prioritized margin over volumes, with flagship brand Purcari witnessing a commendable 28% growth.
Maintaining a stable gross profit margin of 41.7%, the Group faced a 2.0% decrease year-on-year. Marketing and sales expenses surged by 13%, driven by increased sales volumes, while general and administrative expenses mirrored a similar growth pattern. However, both expense categories represented a reduced share of Group revenue compared to the previous year.
Profit from operating activities surged by 23%, propelled by robust sales and prudent expense management. Net finance costs plummeted by 47%, attributed to a net foreign exchange income and decreased interest expenses on borrowings. Income tax expense witnessed a significant 42% decline, bolstering net profit for the year 2023.
EBITDA recorded a 6% year-on-year decrease, but normalization to account for a one-off gain from bargain purchase yielded a strong 27% increase. Non-current assets witnessed a 9% increase, primarily fueled by capital expenditures, while current assets surged by 7%, driven by higher inventories typical of the wine industry post-harvesting season. Non-current liabilities surged by 74%, reflecting increased long-term borrowing to finance capital expenditures.
Despite a slight 1% decrease, dividend income remained healthy at RON 35.6 million, sourced from subsidiaries' profit distributions. Administrative expenses witnessed a notable 19% decline, attributed to lower equity-settled share-based payments. Net finance income nearly doubled, reaching RON 2.4 million, bolstering the net profit for the year by 10% to RON 28.8 million.
Recognized product quality
In a testament to its unwavering commitment to quality, Purcari Wineries Group has amassed a remarkable collection of awards over the years, starting from 15 medals in 2015 and escalating to a staggering 97 medals in 2021. Notably, it held the prestigious title of the most awarded CEE winery at Decanter London from 2015 to 2022, clinching a total of 129 medals. In 2023, Purcari Winery continued its upward trajectory, emerging as the most successful winery from CEE at the Decanter World Wine Awards. Fast forward to 2024, and the Group solidified its position among the top 3 most awarded wineries globally, garnering recognition from esteemed competitions such as Decanter World Wine Awards, Concours Mondial de Bruxelles, Mundus Vini Spring Tasting, and many more.
However, despite its illustrious achievements on the global stage, the Group remains grounded in its dedication to consumer satisfaction. With an impressive average rating of 4.1 on Vivino, a popular wine rating mobile app, based on over 100,000 individual scores, the Group's products continue to resonate with discerning consumers worldwide. Recognizing the growing influence of millennials in shaping consumption patterns, Purcari Wineries Group closely monitors technological innovations like Vivino, akin to services such as Yelp or TripAdvisor in the restaurant industry. This keen focus ensures the Group remains agile in meeting the evolving taste preferences of this demographic.
As of March 2024, the Group manages approximately 1,560 hectares of vineyards, with the majority planted during 2004-2005 and situated in favorable micro-zones for winemaking. Despite its achievements, the Group remains vigilant, understanding that continuous improvement is essential in the dynamic world of wine production.
In summary, Purcari Wineries Group's financial performance in 2023 reflects resilience amidst market dynamics, strategic expense management, and prudent financial planning, positioning it for continued growth and shareholder value creation.