The results for Q4'23 turned out to be noticeably lower than our forecasts.
• In Q4'23, Toya achieved PLN 177.7 million of consolidated revenues, PLN 18.2 million of EBIT and PLN 14.9 million of net profit attributable to the shareholders of the parent company.
• The level of sales turned out to be noticeably lower than our forecasts, and as a result, profits are clearly lower than our estimates.
• Revenues decreased by as much as 17% y/y. However, in Q4'22, Toya used price promotions to reduce inventory levels, but no such action was carried out in Q4'23. Either way, the sales level is disappointing - it is also noticeably lower than the results achieved in the two previous quarters.
• Gross margin on sales was significantly higher y/y, although slightly below our estimates. In the case of sales in Poland, which constitute half of the capital group's revenues, the company benefited from the strengthening of the Polish zloty.
• With revenues declining, selling costs increased - to the highest quarterly level in history. In turn, general and administrative costs decreased y/y, although we expected a slight increase. Overall, SG&A was slightly higher than our estimates.
• The financial balance was close to zero - in September last year, the company repaid the last loan, financial costs are mainly the result of leasing interest.
• Cash flows from operating activities were a positive element, the level of which in Q4'23 (+PLN 42.0 million) clearly exceeded the level of net profit plus depreciation (+PLN 17.1 million). This was possible thanks to a decrease in the level of inventories and receivables and a slight increase in liabilities to suppliers.
• As a result, the cash balance at the end of the year increased to PLN 69.9 million (the highest level in history), and net cash (the group companies only have leasing liabilities) increased to PLN 38.0 million (from PLN 13.4 million PLN at the end of Q3'23).
• Despite poor results for the last quarter, we maintain a positive attitude towards the company in the long term - as consumer sentiment improves, sales levels should increase.
• In our opinion, the high level of cash should encourage the management board to allocate a significant part of the profit to dividends or share buybacks.
