Karelian Tobacco Industry: Cash Reserves and Dividends – Mammoth

By | April 30, 2023

With cash reserves in the form of investments and reserves of a whopping 643 million euros, the Karelian tobacco industry last year recorded an increase in its turnover and a small decrease in its net profit.

In particular, the turnover of the Messina tobacco industry (net of Excise Taxes and VAT) amounted to 257 million euros (+12.61% compared to 2021), while its net profits amounted to 85.36 million euros. from 87.67 million euros in 2021.

How and to whom the “golden” dividend is distributed
The management of the listed company will propose to the next ordinary general meeting of shareholders the distribution of a dividend of 11.80 euros per share. It is noted that the proposed dividend is higher than that of the 2021 financial year.

The dividend yield is 4.07% based on the stock market price as of December 31, 2022.

Since the Karelia family as a whole owns 95.66% of the company, the proposed “golden” dividend of €32.568 million will go almost exclusively to its main shareholders, who will receive €31.154 million.

According to the relevant reports in the annual financial report of the tobacco industry, Ioanna Karelia and her mother Asimina Spyropoulou, daughter and wife of the late Konstantinos Karelia, collectively own 45.3787% of Karelia’s shares. However, the majority stake, ie 50.2841% of Karelia’s shares, is held by the current Management.

CEO Andreas Karelias, together with his brother Efstathios, vice president of the company, own a total of 43.1344%.

To this percentage is added the 7.1497% held by the non-profit foundation Georgiou and Victoria Karelia Foundation. The president of the Foundation is her mother Victoria, who since 1986 has also been the president of Karelia.

Satisfactory course in 2023
The group’s trajectory during the first months of 2023 is considered especially satisfactory, according to the management of the listed company, since in the midst of continuous increases in the cost of raw materials, but also the intensification of competition from alternative products of nicotine supply, sales volume seems to be holding up slightly, while turnover has risen significantly following ex-factory price increases to offset rising raw material costs.

“Although in many raw materials and packaging materials the inflationary trends observed in the previous period seem to be attenuating, nevertheless the prices of inputs remain at high levels. But for some items, such as acetate tow, price increases continue at unprecedented rates, helped by the small number of suppliers and lack of supply, combined with the need for tobacco companies to stock up.

Thus, the group is forced to operate under a regime of great cost uncertainty during the year, since the time horizon of the prices offered is very short. We believe, however, that the expected de-escalation of energy costs will also lead to a partial rationalization of the purchase of this type of material ”, he underlines.

According to the first figures of 2023, the sales volume in the international markets is moving to the high levels of 2022, as reported, with sales increasing in the Far Eastern markets after some time, but also in the travel retail stores from Turkey, the Persian Gulf countries and Egypt.

A satisfactory evolution is also expected in the Balkan markets, where, however, the recent increases in taxes on tobacco products in Bulgaria and Albania, on the one hand, give the possibility of small increases in ex-factory prices, but on the other hand they carry risks of destabilizing the market and changing the trend of the shares.

As mentioned in the financial report of the listed company for 2022, in the Greek market, the first figures for 2023 show an increase in the volume of sales in cigarettes and stability in rolling tobacco.

Although the company faces intense competition from alternative nicotine delivery products, its brands are showing strong resilience and continuing the enviable run of previous years in terms of volume and revenue, he noted.

At the same time, the forecasts for tourist traffic in 2023 are particularly optimistic, so you expect increased sales in travel retail stores.

Since the end of the previous year, investments have been launched to increase the production capacity of its products, which are mainly intended for the EU markets, as well as for countries where new anti-smoking legislative interventions change the form of packaging.

Likewise, the group follows developments very closely and adjusts its policy to protect its high reserves, opting, among other things, for short-term placements, but also progressively directing a greater part of the deposits to government bonds with a high credit rating. .

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