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14.05.2024 08:00:35 - dpa-AFX: EQS-News: Q3 2023/24: Volatile market environment affects earnings (english)
Q3 2023/24: Volatile market environment affects earnings
EQS-News: Verbio SE / Key word(s): 9 Month figures
Q3 2023/24: Volatile market environment affects earnings
14.05.2024 / 08:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
---------------------------------------------------------------------------
Q3 2023/24: Volatile market environment affects earnings
* Verbio expects significant improvements in earnings in Q4 2023/24
* Positive developments in growth projects
* German Federal Government reacts to fraudulent UERs from China
Leipzig, May 14, 2024 - Despite increased production and sales volumes
reaching new record levels, Group revenue in the first nine months fell by
13 percent to EUR 1,318.1 million on a year-on-year basis (9 M 2022/23: EUR
1,521.3 million), primarily due to the lower level of sales prices for core
products. Earnings before interest, taxes, depreciation and amortisation
(EBITDA) for the nine-month period amounted to EUR 82.1 million, 62 percent
lower than in the comparative period in the previous year (9 M 2022/23: EUR
213.5 million). In addition to market factors, this trend was driven in
particular by the start-up costs of the growth projects in the USA, which
are borne by the Group's European businesses.
Net financial debt at March 31, 2024 totalled EUR 55.0 million (June 30,
2023: net financial assets of EUR 57.4 million) and the equity ratio was
68.4 percent (June 30, 2023: 70.3 percent).
Q3 2023/24: Market environment remains volatile
In the third quarter of the financial year 2023/24 Verbio generated sales
revenues of EUR 409.2 million (Q3 2022/23: EUR 443.6 million) and an EBITDA
of EUR 7.3 million (Q3 2022/23: EUR 43.2 million). As expected, it was not
yet possible to reverse the downward trend seen in the second quarter of
2023/24 (EBITDA Q2 2023/24: EUR 26.1 million) as average product margins
fell further and the low GHG premiums on new contracts affected earnings.
Lower revenue trends in the Biodiesel segment in the third quarter of the
current financial year 2023/24 (EUR 217.8 million) compared to the third
quarter of 2022/23 (EUR 308.2 million) were primarily driven by the sharp
fall in biodiesel and GHG quota sales prices in Europe, while sales volumes
remained stable. In addition, the changes to the manner in which purchase
and sales contracts for the production volumes in Canada have been
structured since December 2023 means that they are seen as processing
contracts in economic terms, with the result that there has been a change in
the presentation of sales revenues and thus a significant reduction in
revenues compared to the same period of the previous year. The decline in
earnings despite attractive purchase prices for vegetable oil is primarily
due to the hedging of good biodiesel margins for the fourth quarter of
2023/24, as well as higher personnel expenses. Excluding the effect of
unrealised commodity forward transactions, the EBITDA for the third quarter
would have been EUR 21.1 million.
It was possible to increase revenues to EUR 188.1 million (Q3 2022/23: EUR
133.8 million) in the Bioethanol segment, despite declining prices for
bioethanol and GHG quotas in Europe. This was primarily driven by increased
sales volumes, among other things as a result of the acquisition of the
South Bend ethanol plant (USA) in May 2023. Although procurement prices for
grain also fell significantly, the impact on earnings was outweighed by
lower sales prices. In addition, significantly lower income from GHG quotas
compared to the same period in the previous year and start-up costs for
Verbio's growth projects in the USA had a negative impact on earnings. These
include investments of EUR 8 million, largely in connection with the South
Bend plant. Accordingly, it has been possible to increase the monthly
production volumes by approximately 30 percent. There was a positive effect
on earnings from unrealised forward commodity transactions. As a result,
Verbio generated an EBITDA of EUR -5.2 million in the third quarter (Q3
2022/2023: EUR 17.5 million).
Verbio invested EUR 30.3 million in property, plant and equipment in the
third quarter (Q3 2022/23: EUR 35.8 million). The investments made were
primarily in the US plants, in the expansion of the production plants and
the filling station network in Germany, and, to a lesser extent, in the new
production process for manufacturing speciality chemicals from rapeseed oil
methyl ester (biodiesel). The ground-breaking ceremony for the speciality
chemicals production plant at the Bitterfeld site is taking place today on
May 14, 2024.
Positive turnaround: significant improvements in earnings expected in Q4
2023/24
For the current financial year 2023/24, Verbio expects an EBITDA in the
range of EUR 120 million to EUR 150 million, and net debt in the range of
EUR 145 million to EUR 175 million. The forecast reflects the continued
pressure on ethanol and GHG quota prices. Despite the significant fall in
imports from China, the oil companies are sitting on a GHG quota reserve of
approximately 6 million tonnes of CO2, which has been generated largely
using incorrectly declared biodiesel imports from China. With the
publication of the results for the first nine months of the financial year
the Management Board has indicated that EBITDA is likely to be at the lower
end of the range indicated. Compared to Q3 2023/24, this means a significant
increase in EBITDA in Q4 2023/24 as a result of improved product margins and
higher capacity utilisation at the South Bend plant in the USA.
Growth projects in the USA making good progress
After taking measures to increase the efficiency of ethanol production in
South Bend, Indiana, in recent months Verbio succeeded in significantly
increasing the output of the ethanol plant from February 2024 by
approximately 30%. Building on this and the start of commercial production
in the near term at the biorefinery in Nevada, Iowa, Verbio is ready to
begin the expansion to enable combined bioethanol-biomethane production in
the South Bend plant. The official ground-breaking ceremony is planned for
May 23, 2024.
The plant in Nevada is the first industrial-scale biomethane and bioethanol
co-production plant in North America, and this will provide it with
significant competitive advantages. The biomethane plant was successfully
commissioned in March, and is currently operating at approximately 30%
capacity. The next step will be to commence production of ethanol, which is
expected to start in the coming weeks. It is expected that the biorefinery
will achieve full capacity utilisation within six to twelve months. The
biomethane plant is entitled to an Investment Tax Credit (ITC) amounting to
30% of the investment project costs. Verbio North America is currently
completing negotiations to sell USD 40 million of ITC credits. This process
should be completed within the current financial year.
Claus Sauter, Chief Executive Officer of Verbio SE, said: "The market for CO2
savings continues to be characterised by uncertainty, which is reflected in
the volatility of prices for biofuels and GHG quotas. However, the ongoing
anti-dumping investigations at the European level as well as the media
interest, in particular the attention given to cases of fraud in upstream
emission reductions (UERs), give us grounds to be optimistic that control
mechanisms, which are currently not in place, will be installed and that we
will see a return to fair market conditions in the future." UERs are
currently still an option for fulfilling statutory climate protection
requirements in Germany. However, research including, among others, an
investigation by the political show, "frontal" on ZDF, shows that many UER
certificates should never have been issued. This includes at least ten
projects with a value exceeding EUR 350 million. With these projects alone
CO2 savings of approximately 1.5 million tonnes should have been generated,
representing around 8% of the savings targets for 2024. In response, the
German government quickly presented an amendment to the 36th Ordinance for
the Implementation of the Federal Immission Control Act (Verordnung zur
Durchführung des Bundes-Immissionsschutzgesetzes - BImSchV), which means
that credits for UER certificates against the GHG quota will end in 2024,
two years earlier than originally planned. The elimination of UERs as a
fulfilment option means that around 2.4 million tonnes of CO2 savings will
no longer be available, and these will need to be replaced by more
electromobility and the use of liquid and gaseous biofuels. Together with
the planned increase in the GHG quota of 1.25% in 2025, this results in an
overall 2.45% increase in the need for GHG savings. This is by far the
largest annual increase in required GHG savings since the introduction of
the GHG quota, and corresponds to at least 5 million tonnes of CO2 in the
transport sector. "Products created from biomass from sustainable sources
are of decisive importance for climate protection. For this reason, we are
focussing on implementing strategic milestones in the USA as well as
establishing the production of bio-based speciality chemicals," added Claus
Sauter.
Verbio key figures
Detailed information on business developments in the first nine months of
the 2023/24 financial year is provided in the quarterly statement for the
period ended March 31, 2024, which can be viewed from 8.30 a.m. CEST on
Verbio's website at
https://www.verbio.de/en/investor-relations/news-publications/financial-reports.
About Verbio
At Verbio we make more from biomass. In our biorefineries we convert raw
materials and residues from regional agriculture into climate-friendly
fuels, green energy and renewable products for chemicals and agriculture. In
addition, we create high-value components from sustainably-generated biomass
for the animal feed and food industries. We employ more than 1,000 people at
our locations in Germany, Poland, Hungary, India, the USA and Canada. Our
motto "Pioneering green solutions" sums up what drives our international
team; with innovative technologies and green solutions, we are shaping the
social and industrial transformation toward climate neutrality and
ecological production. We contribute to preserving natural resources and to
leaving the Earth in a habitable state for the generations that will follow
us. In doing so we combine global growth with economic success, social
responsibility and security of supply. Verbio shares (ISIN DE000A0JL9W6/WKN
A0JL9W) have been listed in the prime standard segment of the Frankfurt
Stock Exchange since October 2006. Our headquarters are in Zörbig, Germany.
Important notice
This publication contains forward-looking statements based on assumptions
and estimates by the management of Verbio SE. Although the Company's
management is of the opinion that these assumptions and estimates are
realistic, actual future developments and actual future results may differ
significantly from these assumptions and estimates due to a variety of
factors. For example, these factors can include changes to the overall
economic climate, changes to the legal and regulatory framework in Germany
and the EU, and changes in the industry. Verbio can give no guarantees and
accepts no liability as to whether future developments and the results
actually achieved in future will match the assumptions and estimates made in
this publication.
Contact:
Verbio SE
Ritterstraße 23 (Oelßner's Hof)
04109 Leipzig
Alina Köhler (IR)
Ulrike Kurze (PR)
Tel: +49(0)341/308530-299
E-Mail: ir@verbio.de/pr@verbio.de
---------------------------------------------------------------------------
14.05.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS
News - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The EQS Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com
---------------------------------------------------------------------------
End of News EQS News Service
---------------------------------------------------------------------------
1902047 14.05.2024 CET/CEST
EQS-News: Verbio SE / Key word(s): 9 Month figures
Q3 2023/24: Volatile market environment affects earnings
14.05.2024 / 08:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
---------------------------------------------------------------------------
Q3 2023/24: Volatile market environment affects earnings
* Q3 2023/24 EBITDA lower than in the comparable prior-year period and
previous quarter
* Verbio expects significant improvements in earnings in Q4 2023/24
* Positive developments in growth projects
* German Federal Government reacts to fraudulent UERs from China
Leipzig, May 14, 2024 - Despite increased production and sales volumes
reaching new record levels, Group revenue in the first nine months fell by
13 percent to EUR 1,318.1 million on a year-on-year basis (9 M 2022/23: EUR
1,521.3 million), primarily due to the lower level of sales prices for core
products. Earnings before interest, taxes, depreciation and amortisation
(EBITDA) for the nine-month period amounted to EUR 82.1 million, 62 percent
lower than in the comparative period in the previous year (9 M 2022/23: EUR
213.5 million). In addition to market factors, this trend was driven in
particular by the start-up costs of the growth projects in the USA, which
are borne by the Group's European businesses.
Net financial debt at March 31, 2024 totalled EUR 55.0 million (June 30,
2023: net financial assets of EUR 57.4 million) and the equity ratio was
68.4 percent (June 30, 2023: 70.3 percent).
Q3 2023/24: Market environment remains volatile
In the third quarter of the financial year 2023/24 Verbio generated sales
revenues of EUR 409.2 million (Q3 2022/23: EUR 443.6 million) and an EBITDA
of EUR 7.3 million (Q3 2022/23: EUR 43.2 million). As expected, it was not
yet possible to reverse the downward trend seen in the second quarter of
2023/24 (EBITDA Q2 2023/24: EUR 26.1 million) as average product margins
fell further and the low GHG premiums on new contracts affected earnings.
Lower revenue trends in the Biodiesel segment in the third quarter of the
current financial year 2023/24 (EUR 217.8 million) compared to the third
quarter of 2022/23 (EUR 308.2 million) were primarily driven by the sharp
fall in biodiesel and GHG quota sales prices in Europe, while sales volumes
remained stable. In addition, the changes to the manner in which purchase
and sales contracts for the production volumes in Canada have been
structured since December 2023 means that they are seen as processing
contracts in economic terms, with the result that there has been a change in
the presentation of sales revenues and thus a significant reduction in
revenues compared to the same period of the previous year. The decline in
earnings despite attractive purchase prices for vegetable oil is primarily
due to the hedging of good biodiesel margins for the fourth quarter of
2023/24, as well as higher personnel expenses. Excluding the effect of
unrealised commodity forward transactions, the EBITDA for the third quarter
would have been EUR 21.1 million.
It was possible to increase revenues to EUR 188.1 million (Q3 2022/23: EUR
133.8 million) in the Bioethanol segment, despite declining prices for
bioethanol and GHG quotas in Europe. This was primarily driven by increased
sales volumes, among other things as a result of the acquisition of the
South Bend ethanol plant (USA) in May 2023. Although procurement prices for
grain also fell significantly, the impact on earnings was outweighed by
lower sales prices. In addition, significantly lower income from GHG quotas
compared to the same period in the previous year and start-up costs for
Verbio's growth projects in the USA had a negative impact on earnings. These
include investments of EUR 8 million, largely in connection with the South
Bend plant. Accordingly, it has been possible to increase the monthly
production volumes by approximately 30 percent. There was a positive effect
on earnings from unrealised forward commodity transactions. As a result,
Verbio generated an EBITDA of EUR -5.2 million in the third quarter (Q3
2022/2023: EUR 17.5 million).
Verbio invested EUR 30.3 million in property, plant and equipment in the
third quarter (Q3 2022/23: EUR 35.8 million). The investments made were
primarily in the US plants, in the expansion of the production plants and
the filling station network in Germany, and, to a lesser extent, in the new
production process for manufacturing speciality chemicals from rapeseed oil
methyl ester (biodiesel). The ground-breaking ceremony for the speciality
chemicals production plant at the Bitterfeld site is taking place today on
May 14, 2024.
Positive turnaround: significant improvements in earnings expected in Q4
2023/24
For the current financial year 2023/24, Verbio expects an EBITDA in the
range of EUR 120 million to EUR 150 million, and net debt in the range of
EUR 145 million to EUR 175 million. The forecast reflects the continued
pressure on ethanol and GHG quota prices. Despite the significant fall in
imports from China, the oil companies are sitting on a GHG quota reserve of
approximately 6 million tonnes of CO2, which has been generated largely
using incorrectly declared biodiesel imports from China. With the
publication of the results for the first nine months of the financial year
the Management Board has indicated that EBITDA is likely to be at the lower
end of the range indicated. Compared to Q3 2023/24, this means a significant
increase in EBITDA in Q4 2023/24 as a result of improved product margins and
higher capacity utilisation at the South Bend plant in the USA.
Growth projects in the USA making good progress
After taking measures to increase the efficiency of ethanol production in
South Bend, Indiana, in recent months Verbio succeeded in significantly
increasing the output of the ethanol plant from February 2024 by
approximately 30%. Building on this and the start of commercial production
in the near term at the biorefinery in Nevada, Iowa, Verbio is ready to
begin the expansion to enable combined bioethanol-biomethane production in
the South Bend plant. The official ground-breaking ceremony is planned for
May 23, 2024.
The plant in Nevada is the first industrial-scale biomethane and bioethanol
co-production plant in North America, and this will provide it with
significant competitive advantages. The biomethane plant was successfully
commissioned in March, and is currently operating at approximately 30%
capacity. The next step will be to commence production of ethanol, which is
expected to start in the coming weeks. It is expected that the biorefinery
will achieve full capacity utilisation within six to twelve months. The
biomethane plant is entitled to an Investment Tax Credit (ITC) amounting to
30% of the investment project costs. Verbio North America is currently
completing negotiations to sell USD 40 million of ITC credits. This process
should be completed within the current financial year.
Claus Sauter, Chief Executive Officer of Verbio SE, said: "The market for CO2
savings continues to be characterised by uncertainty, which is reflected in
the volatility of prices for biofuels and GHG quotas. However, the ongoing
anti-dumping investigations at the European level as well as the media
interest, in particular the attention given to cases of fraud in upstream
emission reductions (UERs), give us grounds to be optimistic that control
mechanisms, which are currently not in place, will be installed and that we
will see a return to fair market conditions in the future." UERs are
currently still an option for fulfilling statutory climate protection
requirements in Germany. However, research including, among others, an
investigation by the political show, "frontal" on ZDF, shows that many UER
certificates should never have been issued. This includes at least ten
projects with a value exceeding EUR 350 million. With these projects alone
CO2 savings of approximately 1.5 million tonnes should have been generated,
representing around 8% of the savings targets for 2024. In response, the
German government quickly presented an amendment to the 36th Ordinance for
the Implementation of the Federal Immission Control Act (Verordnung zur
Durchführung des Bundes-Immissionsschutzgesetzes - BImSchV), which means
that credits for UER certificates against the GHG quota will end in 2024,
two years earlier than originally planned. The elimination of UERs as a
fulfilment option means that around 2.4 million tonnes of CO2 savings will
no longer be available, and these will need to be replaced by more
electromobility and the use of liquid and gaseous biofuels. Together with
the planned increase in the GHG quota of 1.25% in 2025, this results in an
overall 2.45% increase in the need for GHG savings. This is by far the
largest annual increase in required GHG savings since the introduction of
the GHG quota, and corresponds to at least 5 million tonnes of CO2 in the
transport sector. "Products created from biomass from sustainable sources
are of decisive importance for climate protection. For this reason, we are
focussing on implementing strategic milestones in the USA as well as
establishing the production of bio-based speciality chemicals," added Claus
Sauter.
Verbio key figures
(EUR millions) 9 M 22/23 9 M 23/24 yoy Q3 22/23 Q3 23/24 yoy
Production
Biodiesel (tonnes) 456,242 483,118 6% 153,149 161,274 5%
Bioethanol (tonnes) 208,249 378,544 82% 65,566 129,687 98%
Biomethane (MWh) 793,604 800,136 1% 271,476 281,004 4%
Revenue 1,521.3 1,318.1 -13% 443.6 409.2 -8%
Segment Biodiesel 1,101.0 790.7 -28% 308.2 217.8 -29%
Segment Bioethanol 409.9 516.6 26% 133.8 188.1 41%
EBITDA 213.5 82.1 -62% 43.2 7.3 -83%
EBITDA margin 14.0% 6.2% -8pp 9.7% 1.8% -8pp
Segment Biodiesel 163.0 85.6 -47% 24.5 11.4 -53%
EBITDA margin 14.8% 10.8% -4pp 7.9% 5.2% -3pp
Segment Bioethanol 48.1 -7.4 n.a. 17.5 -5.2 n.a.
EBITDA margin 11.7% n.a. n.a. 13.1% n.a. n.a.
(EUR millions) 30.06.2023 31.03.2024 +/-
Net debt -57.4 55.0 n.a.
Equity ratio 70.3% 68.4% -2pp
Detailed information on business developments in the first nine months of
the 2023/24 financial year is provided in the quarterly statement for the
period ended March 31, 2024, which can be viewed from 8.30 a.m. CEST on
Verbio's website at
https://www.verbio.de/en/investor-relations/news-publications/financial-reports.
About Verbio
At Verbio we make more from biomass. In our biorefineries we convert raw
materials and residues from regional agriculture into climate-friendly
fuels, green energy and renewable products for chemicals and agriculture. In
addition, we create high-value components from sustainably-generated biomass
for the animal feed and food industries. We employ more than 1,000 people at
our locations in Germany, Poland, Hungary, India, the USA and Canada. Our
motto "Pioneering green solutions" sums up what drives our international
team; with innovative technologies and green solutions, we are shaping the
social and industrial transformation toward climate neutrality and
ecological production. We contribute to preserving natural resources and to
leaving the Earth in a habitable state for the generations that will follow
us. In doing so we combine global growth with economic success, social
responsibility and security of supply. Verbio shares (ISIN DE000A0JL9W6/WKN
A0JL9W) have been listed in the prime standard segment of the Frankfurt
Stock Exchange since October 2006. Our headquarters are in Zörbig, Germany.
Important notice
This publication contains forward-looking statements based on assumptions
and estimates by the management of Verbio SE. Although the Company's
management is of the opinion that these assumptions and estimates are
realistic, actual future developments and actual future results may differ
significantly from these assumptions and estimates due to a variety of
factors. For example, these factors can include changes to the overall
economic climate, changes to the legal and regulatory framework in Germany
and the EU, and changes in the industry. Verbio can give no guarantees and
accepts no liability as to whether future developments and the results
actually achieved in future will match the assumptions and estimates made in
this publication.
Contact:
Verbio SE
Ritterstraße 23 (Oelßner's Hof)
04109 Leipzig
Alina Köhler (IR)
Ulrike Kurze (PR)
Tel: +49(0)341/308530-299
E-Mail: ir@verbio.de/pr@verbio.de
---------------------------------------------------------------------------
14.05.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS
News - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The EQS Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com
---------------------------------------------------------------------------
Language: English
Company: Verbio SE
Thura Mark 18
06780 Zörbig
Germany
Phone: +49 (0)341 308530-0
E-mail: ir@verbio.de
Internet: www.verbio.de
ISIN: DE000A0JL9W6
WKN: A0JL9W
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard);
Regulated Unofficial Market in Berlin, Dusseldorf,
Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
EQS News ID: 1902047
End of News EQS News Service
---------------------------------------------------------------------------
1902047 14.05.2024 CET/CEST
| Name | WKN | Börse | Kurs | Datum/Zeit | Diff. | Diff. % | Geld | Brief | Erster | Schluss | |
|---|---|---|---|---|---|---|---|---|---|---|---|
 |
VERBIO SE INH O.N. | A0JL9W | Xetra | 21,460 | 29.05.24 17:35:26 | -0,420 | -1,92% | 0,000 | 21,460 | 22,680 | 21,880 |
