Wendel shares drop 10% after earnings fall on weak asset valuations, FX hit

Investing.com -- Wendel (EPA:MWDP) shares fell more than 10% on Thursday after the investment firm on Wednesday reported a steep decline in first-half 2025 net income to €4.3 million, down from €388.2 million a year earlier, citing foreign exchange losses and lower contributions from unlisted assets.

The year-ago result had included a €419 million capital gain from the sale of Constantia Flexibles, which had no equivalent in the current period. 

A capital gain from the March 2025 forward sale of Bureau Veritas shares was not recognized in the income statement, but instead booked directly to equity, Wendel said in its half-year report released July 30.

Group consolidated sales rose to €4.18 billion in the six months ended June 30, up 7.2% year-on-year, with 3.9% organic growth and a 5.4% positive scope effect. 

Net income from operations, group share, declined 17.9% to €86 million. Total (EPA:TTEF) net income, including non-recurring items, was €268 million, down from €845.8 million.

Net asset value per share on a fully diluted basis dropped to €167.7 at the end of June from €176.7 in March. 

The company attributed €4.7 of the decline to exchange rate effects from a stronger euro. At constant exchange rates and excluding the €4.70 per share dividend paid in May, NAV was stable.

Listed investments, accounting for 38% of gross asset value excluding cash, contributed positively to NAV. 

Shares of IHS Towers rose 29.5%, while Bureau Veritas and Tarkett (EPA:TKTT) gained 1.2% and 3%, respectively, on a 20-day average. 

Unlisted assets, also 38% of gross asset value, reduced NAV by €5.0 per share in the second quarter due to valuation and operational factors.

Wendel’s asset management business expanded significantly. Assets under management for third parties reached €39 billion as of June 30, following the acquisition of a 72% stake in Monroe Capital (NASDAQ:MRCC) for $1.132 billion in March. 

Fundraising totaled €4.3 billion in the first half, with no sponsor capital deployed by Wendel. Monroe raised $4 billion, and IK Partners closed two funds at hard caps.

The platform reported €152 million in management fees and €59.9 million in fee-related earnings, up 355% and 318% year-over-year. Asset management accounted for 22% of gross asset value, excluding cash.

Among portfolio companies, Bureau Veritas delivered €3.19 billion in first-half revenue, up 5.7%, with a 15.4% operating margin. 

ACAMS reported a 9.6% increase in sales and 53.9% EBITDA growth. Stahl and Scalian posted lower revenue and earnings. 

Wendel invested €41.5 million in Scalian to support acquisitions and its balance sheet.

Wendel maintained a loan-to-value ratio of 18.5% and an average debt maturity of 3.1 years at a 2.4% cost. S&P revised its outlook to stable from negative in March while affirming a BBB rating.

The group initiated a new dividend policy, with a €1.50 interim payment scheduled for November, following a €4.70 payout in May, up 17.5% from 2024.