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Investing.com -- Verbio SE shares tumbled 18.05% on Thursday after the biofuel producer reported preliminary earnings for the 2024/2025 financial year that fell significantly below guidance, weighed down by inventory impairments and reduced earnings potential at its U.S. operations.
The company posted preliminary earnings before interest, taxes, depreciation, and amortization (EBITDA) of approximately €14 million for the fiscal year, well below its most recent forecast of the "lower end of mid double-digit million range." Analysts had expected EBITDA of €37 million. Before special items, preliminary EBITDA would have been approximately €31 million, the company said.
The significant miss was primarily driven by impairment allowances on inventories due to the absence of a significant short-term recovery in greenhouse gas (GHG) quota prices. Additionally, Verbio recognized a non-cash impairment of approximately €66 million on non-current assets, mainly related to its straw biomethane plant in Iowa, USA.
"The total impairment of the straw biomethane plant is mainly due to a reduced short- to medium-term earnings potential as a result of changed external market conditions for cellulosic-based fuels in conjunction with investment expenditures exceeding the planned level during the COVID-19 pandemic," the company explained in its release.
Verbio emphasized that its biomethane from stillage, which is not a cellulosic-based fuel, remains unaffected by these unfavorable market conditions. The company is currently exploring expanded use of grain stillage and alternative raw materials for its Iowa plant.
Despite the disappointing results, Verbio maintained a relatively stable financial position with net financial debt of around €164 million as of June 30, 2025, below its self-imposed ceiling of €190 million. The company reported a preliminary equity ratio of close to 60% at the end of the financial year.