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Investing.com -- Shares of Verbio SE (ETR:VBK) rose 7% following the company’s financial results for the second quarter of fiscal year 2024/25. The German bioenergy company reported a slight decline in sales year-on-year (YoY) but exceeded consensus estimates for EBITDA.
Verbio’s second-quarter sales dropped 6.5% YoY to €393.6 million but showed a 9.9% increase quarter-on-quarter (QoQ). Although sales in the Bioethanol/Biomethane segment fell by 11.8% YoY and 6.7% QoQ, this was partially offset by a 23% QoQ increase in the Biodiesel segment, amounting to €242.5 million, despite a 3% YoY decrease.
EBITDA for the quarter stood at €20.8 million, surpassing both the consensus estimate of €20.3 million and the €-6.6 million reported in the first quarter of fiscal year 24/25. However, this figure represents a decline from €26.1 million in the same quarter of the previous year.
The improvement in EBITDA from the previous quarter was attributed to an improved biodiesel margin, which benefited from favorable rapeseed oil purchases compared to the spot market.
The balance sheet shows an increase in net debt to €97 million, up from €32.9 million at the end of the fiscal year 23/24 in June. This rise in debt is attributed to negative free cash flow resulting from capital expenditures in the US and the production plant for specialty chemicals. The equity ratio slightly decreased to 64.7% from 65% in the first quarter.
The company confirmed its revised full-year EBITDA guidance, which had been downgraded on January 15th to a mid double-digit million range from the previous forecast of €120-160 million. Analyst consensus estimates still stand at €101 million, but adjustments are expected following the late updates. Verbio also anticipates net debt could reach up to a maximum of €190 million, unchanged from previous expectations.
Despite the challenges, including a delay in the ethanol line in Nevada due to quality issues and a lower EBITDA guidance for FY24/25, Verbio’s stock has responded positively to the recent earnings report.
The company remains optimistic about a recovery in GHG certificate prices following the implementation of a ban on the carry forward of surplus GHG quota into 2025 and 2026.
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