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MALMÖ, Sweden - Oatly Group AB (NASDAQ:OTLY), a leading producer of oat-based dairy alternatives currently trading at $0.66 per share with a market capitalization of $395 million, has announced a forthcoming change to its American Depositary Receipts (ADRs) structure. The company will adjust the ratio of its ADRs to ordinary shares from 1:1 to 1:20, effectively executing a one-for-twenty reverse ADR split. This adjustment is expected to proportionally increase the trading price of each ADR when it takes effect at the opening of business on February 18, 2025. According to InvestingPro data, the stock has experienced significant volatility, with a 41% decline over the past year.
The reverse split will not alter the number of Oatly’s underlying ordinary shares; no new shares will be issued or cancelled due to this action. ADR holders will not receive fractional new ADRs. Instead, fractional entitlements will be sold, and the net proceeds, after deductions, will be distributed to the holders by the depositary bank. ADR holders have been advised to consult the Deposit Agreement for details on any applicable fees. With an overall WEAK financial health score from InvestingPro and rapidly depleting cash reserves, investors might benefit from accessing the comprehensive Pro Research Report available for deeper analysis.
While the company anticipates that the ADR trading price on the Nasdaq Global Select Market will increase after the ratio change, it has not guaranteed that the post-change price will be equal to or greater than twenty times the pre-change price per ADR.
The announcement comes ahead of Oatly’s scheduled financial results release and conference call on February 12, 2025, where additional updates regarding the ADR ratio change may be provided.
Based in Malmö, Sweden, Oatly has established itself as the original and largest oat drink company, operating in over 40 countries worldwide. The company’s focus on oats has led to a wide range of dairy alternative products, including milks, ice cream, yogurt, cooking creams, spreads, and on-the-go drinks. Despite generating annual revenue of $813 million, the company faces profitability challenges with negative EBITDA of $117 million. InvestingPro subscribers can access 7 additional ProTips and extensive financial metrics to better understand the company’s growth trajectory and market position.
This news article is based on a press release statement and contains forward-looking statements that involve risks and uncertainties. These statements are not guarantees of future performance, and actual results could differ materially from those projected. Oatly disclaims any obligation to update or revise any forward-looking statements, except as required by law.
In other recent news, Oatly Group AB has reported a nearly 10% increase in constant currency revenue and a reduced adjusted EBITDA loss of $5 million in its Q3 2024 financial results. Full-year revenue growth is projected to be at the lower end of the 6%-10% range, with adjusted EBITDA losses expected to be closer to the favorable end of the $35 million to $50 million range. North America and Greater China have reported revenue increases of 18% and 12% respectively, with the latter experiencing its first quarter of profitable growth.
DA Davidson, a financial services firm, adjusted its price target for Oatly Group AB to $1.20 from the previous $1.40, while maintaining a Buy rating for the company’s stock. The firm sees value in Oatly’s stock for certain investors, citing visible advancements in revenue and EBITDA.
Oatly plans to bolster brand awareness and advertising, targeting local market preferences. The company aims for profitable growth and positive adjusted EBITDA by 2025, focusing on distribution gains, market share improvement, and category expansion. These are recent developments in the company’s journey towards profitable growth.
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