German energy company Verbio has downgraded its fiscal 2024 outlook for earnings and net debt. The company attributes this downgrade to falsely labeled biodiesel imports from Asia, which have resulted in artificially low ethanol prices.
Revised Financial Projections
Verbio now expects its earnings before interest, taxes, depreciation and amortization (EBITDA) for fiscal 2024 to range between 120 million and 150 million euros ($131.4 million-$164.3 million). This is a decrease from the previous projection of EUR200 million to EUR250 million.
The company also anticipates an increase in net financial debt, with a revised estimate of between EUR145 million and EUR175 million, up from the original range of EUR110 million to EUR150 million.
EU Investigation on Chinese Imports
The European Union launched an investigation in December following allegations by biodiesel producers regarding the entry of Chinese imports into the EU at artificially low prices. These imports have been accused of impeding fair competition.
Impact on Verbio’s Forecast Adjustment
Verbio cites the massive biodiesel imports from Asia, likely to have been falsely labeled, as the main reason for the adjustment in their forecast. The continued pressure on ethanol and greenhouse-gas quota prices has deviated from their initial expectations.
Having thoroughly examined the situation, Verbio no longer expects prices to recover sufficiently in the short term to meet their previous expectations.