Low margins squeeze Q1 profits at Verbio

15 May 2007 15:08  [Source: ICIS news]

LONDON (ICIS news)--Verbio reported disappointing operating profits of €3.3m ($4.5m) in the first quarter, due to lower comparative margins in biodiesel and bioethanol production, the German biofuels company said on Tuesday.

 

The group’s earnings before interest and tax (EBIT) margin was 3.2% in the first quarter compared with 9.9% for the full year 2006, when Verbio reported a €44.1m profit.

 

Verbio generated €103.1m in sales in the first quarter, with the bulk of the figure from biodiesel production revenues.

 

The biodiesel segment booked a relatively low EBIT of €1.2m, and margins of 1.8%, due to the low price of mineral oil and the relatively high prices of raw materials, said Verbio.

 

Sales in the segment were €66m, while biodiesel plants operated at 91.4% of full capacity in the first quarter.

 

The bioethanol segment reported an operating loss of €1.5m on a -5.3% EBIT margin. Verbio said significantly higher fixed costs by comparison with the biodiesel business had resulted in low utilisation.

 

Sales in bioethanol were $28.1m while plants operated at only 54.2% of capacity in the first quarter.

 

“The management board is continuing to assume that given the unchanged negative economic and fiscal framework conditions in the sector, there will be no short-term improvement in the business prospects or the projected performance,” said Verbio in a statement.

 

Earlier this year, Verbio said it did not expect a significant and sustainable improvement in German biofuels industry conditions until 2008.

 

Verbio was floated on the Frankfurt stock exchange in October 2006. It has the capacity to produce around 400,000 tonnes/year of biodiesel and 300,000 tonnes/year of bioethanol, making it one of the market leaders in the European sector.

 

The company's share rose 2.11% to €7.75 in early afternoon trading on Tuesday.

 

($1 = €0.74)

By: Mark Watts
+44 20 8652 3214

< previous article(ICIS Podcast: Chemical News Central 2 November 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly