Street Calls of the Week
Investing.com -- Verbio SE on Thursday confirmed its fourth-quarter 2024/25 preliminary results on Thursday, reporting a significant decline in earnings primarily due to inventory write-downs, falling GHG premiums, and one-off repair costs at its Nevada facility.
The company reported fourth-quarter sales of €433.4 million, representing a 27.5% increase year-over-year and a 9.7% rise quarter-over-quarter. However, EBITDA fell to -€8.2 million, compared to €8.2 million in the third quarter and €39.4 million in the same period last year.
The quarterly sales growth was largely driven by the Biodiesel segment, which increased 16.2% quarter-over-quarter to €244.4 million, supported by resumed production in Canada.
The Bioethanol/Biomethane segment contributed €186.1 million, up 2.5% from the previous quarter, benefiting from higher North American production and GHG quota sales, though partially offset by lower ethanol prices.
Despite the challenging quarter, Verbio maintained its net financial debt at €164 million, below its self-imposed ceiling of €190 million, though significantly higher than the €32.9 million reported at the end of fiscal year 2023/24.
The company’s equity ratio declined to 58.2% from 67.4% in the previous fiscal year.
Due to the lower operating results, Verbio announced it will suspend its dividend for the financial year.
Looking ahead, the company issued guidance for fiscal year 2025/26, projecting EBITDA in the high double-digit million range (approximately €70-90 million), which aligns with analyst expectations.
The outlook assumes market spreads below those achieved in fiscal year 2024/25, improved earnings in the US following maintenance setbacks, and a recovery in GHG quota prices.
Management expressed optimism about a recovery in GHG certificate prices during 2026, though price improvements have been limited so far.
The company also expects net debt to moderately decrease, though it anticipates exceeding forecasts during the year due to time lags.
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