Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Production volumes increased year over year, particularly in ethanol, driven by better utilization across all regions.
- The equity ratio remained stable at 65%, indicating a strong balance sheet.
- North American operations showed improved performance compared to the previous year, despite lower spreads.
- The company is strategically positioned to benefit from the shift to a green economy, with investments in key projects like South Bend Ethanol and specialty chemicals in Germany.
- The potential positive impact of the German Ministry of Environment's draft proposal on greenhouse gas quota prices is expected in the second half of the financial year.
Negative Points
- EBITDA declined significantly to minus EUR6.6 million due to challenging market conditions.
- Net debt increased to EUR63 million as the company continued to invest in key projects.
- The decline in gross margin was primarily due to decreased sales pricing and a challenging GHG quota market.
- Lower biodiesel prices and GHG quota sales led to a significant drop in revenues for the biodiesel segment.
- The company faces uncertainty regarding potential impairment of greenhouse gas quota inventories, depending on future quota price developments.
Q & A Highlights
Q: Could you please provide more clarity surrounding the potential impairment as well as the profit contribution?
A: Claus Sauter, CEO: The potential impairment depends on the quota price level at the end of the year. Currently, we don't foresee a significant issue, but it could be a low single or double-digit million EUR amount.
Q: Are there currently no parties interested in acquiring the company given its low market valuation?
A: Claus Sauter, CEO: No, there are no parties interested in acquiring the company. The low market valuation is linked to regulatory issues and concerns about fraudulent products, which we expect to resolve, leading to market recovery.
Q: Do you expect the revaluation effects and FX and commodity contracts to be reversed in Q2 with a stronger dollar?
A: Alina Köhler, Head of Investor Relations: Yes, both ethanol prices and the dollar are appreciating, which should benefit us in the second quarter.
Q: When will the US expansion be completed, specifically the capacity ramp-up?
A: Claus Sauter, CEO: The Nevada plant is expected to reach full capacity by the end of the business year. The Indiana plant is already at full capacity for ethanol, and we are working on RNG production, which will take another two years.
Q: What is your current assessment of the political risk in the USA, and can you provide more details on US production volumes?
A: Claus Sauter, CEO: The political risk is low as the IRA is supported by both parties, especially in the Midwest. Our decision to invest in the US was made before the IRA, and we are not concerned about potential changes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
