Stock Analysis

Tower Full Year 2023 Earnings: Misses Expectations

Simply Wall St

November 26, 2023

Tower (NZSE:TWR) Full Year 2023 Results

Key Financial Results

Revenue: NZ$412.2m (up 16% from FY 2022).
Net income: NZ$2.35m (down 87% from FY 2022).
Profit margin: 0.6% (down from 4.9% in FY 2022).
EPS: NZ$0.006 (down from NZ$0.044 in FY 2022).

TWR Profitability Indicators

Combined ratio: 101.0% (up from 90.1% in FY 2022).

revenue-and-expenses-breakdown — NZSE:TWR Revenue and Expenses Breakdown November 26th 2023

All figures shown in the chart above are for the trailing 12 month (TTM) period

Tower Revenues and Earnings Miss Expectations

Revenue missed analyst estimates by 17%. Earnings per share (EPS) also missed analyst estimates by 157%.

The primary driver behind last 12 months revenue was the New Zealand segment contributing a total revenue of NZ$375.5m (91% of total revenue). Notably, cost of sales worth NZ$404.7m amounted to 98% of total revenue thereby underscoring the impact on earnings. The most substantial expense, totaling NZ$5.06m were related to Non-Operating costs. This indicates that a significant portion of the company's costs is related to non-core activities. Explore how TWR's revenue and expenses shape its earnings.

Looking ahead, revenue is forecast to grow 19% p.a. on average during the next 2 years, compared to a 2.4% growth forecast for the Insurance industry in Oceania.

Performance of the market in New Zealand.

The company's shares are down 3.2% from a week ago.

Risk Analysis

It's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Tower, and understanding these should be part of your investment process.

Valuation is complex, but we're helping make it simple.

Find out whether Tower is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.