The unaudited net turnover of the leading producer of alcoholic beverages in the Baltic States, AS Amber Latvijas balzams (hereinafter also – the Company), for the year 2023 reached 97.9 million euros, which is 9.4% less than in the corresponding period in 2022. Total sales volumes (in 9-liter cases) in 2023 were 18.4% less than in the corresponding period in 2022.
A decrease in turnover is related to global trends in the reduction of working capital of wholesalers and importers in the context of rising inflation, as well as strategic decisions made by Stoli Group regarding the rebranding of Stoli products, affecting order volume.
The gross profit in the reporting period was 14.4 million euros, which is a decrease of 4.9 million euros compared to the corresponding period in 2022. The gross profit indicator was affected both by the drop in sales volume and also by a significant increase in the costs of raw materials as well as costs related to production, which had a direct impact on the Company’s results. The negative cost trends were observed starting in the second half of 2022 and therefore only partially affected the comparative indicators.
The operating profit for the year 2023 is 4.1 million euros (2022: profit of 6.4 million euros). The ratio of operating profit to turnover in the reporting period of 2023 is 4.3% (2022: 5.9%), which was directly influenced by both the above-mentioned factors with an impact on gross profit and the proportion of fixed costs in the total amount of costs.
Taking into account the drop in production volumes and the overall decrease in profitability, the Company has taken a series of measures to promote the efficiency of production processes and reduce costs:
- By the middle of the year, a 30% improvement in the utilization efficiency of the finished product filling equipment had been achieved.
- Completed several investment projects (such as an automated line for filling Stoli Elit vodka and purchased palletizing equipment), which allows not only to increase production capacity but also to reduce labour costs per unit of production.
- Switched fixed-price contracts for the purchase of energy resources.
- Adaptation of workforce resources and other costs to current production volumes has been carried out.
AS Amber Latvijas balzams is one of the largest taxpayers in Latvia. During the reporting period, the Company paid taxes of EUR 69.3 million to the state budget, including excise tax amounting to EUR 56.4 million.
Joint stock company Amber Latvijas balzams is the leading producer of alcoholic beverages in the Baltics with a rich history since 1900. The company owns two alcoholic beverage plants in Riga – a strong alcoholic beverage plant and a sparkling wine and light alcoholic beverage plant. Amber Latvijas balzams is one of Latvia’s leading exporters, as well as the company is one of the largest taxpayers in Latvia. The company has been part of the Amber Beverage Group since 2015.
More information can be found in section ‘Latest Financial Indicators’.
JSC Amber Latvijas balzams
Chairman of the Board
Intars Geidāns