Jefferies downgrades Verbio on uncertainty over GHG quota prices, shares fall

Verbio SE

13/01/2025 14:05

** Shares in Verbio  VBKG.DE  fall 14% after Jefferies
downgraded the German biofuel producer to "hold" from "buy",
citing lack of visibility on greenhouse gas (GHG) certificate
prices
    ** While GHG certificate prices are expected to recover in
2025, for now they remain subdued, the broker says
    ** "We currently see quota prices for 2025 trading at €135
vs €260 in mid-23," Jefferies says
    ** It also sees a risk of potential write-down of
certificates held in Verbio's balance sheet due to the material
decline in the prices last year
    ** Visibility is low as the company doesn't report the
amount of currently held certificates, while negotiations for
2025 quotas are ongoing
    ** The current prices are not sufficient to cover 2025
EBITDA guidance of EUR 120-150 mln ($122.6-153.2 mln) at today's
biodiesel and bioethanol spreads, it adds
    ** "Without a material improvement, we expect another year
of material negative FCF," it says
    ** Verbio is at the bottom of Germany's small-cap index
 .SDAXI 

($1 = 0.9790 euros)

 (Reporting by Amir Orusov)
 ((Amir.orusov@thomsonreuters.com))