LEIPZIG (dpa-AFX) - High energy and raw material costs as well as lower sales prices weighed heavily on biofuel producer Verbio in the past fiscal year. The decline in operating profit was more pronounced than analysts had expected. Experts also believe that the outlook for the coming months is poor. The company is likely to continue to suffer from the fall in biodiesel prices.

On the stock exchange, the news caused the share price to slide. Verbio shares fell by almost 12 percent to 33.82 euros in the morning. They thus marked their lowest level since May. The drop since the beginning of the year amounts to almost 44 percent.

In the past fiscal year, Verbio increased its sales by nine percent to 1.97 billion euros, as the SDax-listed company announced in Leipzig on Tuesday. Higher sales volumes for both biodiesel and ethanol were responsible for the increase. In the fourth quarter, however, sales fell significantly year-on-year. "The main reason for this is sharply declining biodiesel prices due, among other things, to suspected mislabeling of Asian biodiesel imports," the statement said.

According to Verbio, certified fuel is being imported from China that - experts suspect - is not actually biodiesel at all, but is instead supposed to be based on palmol. This is much cheaper and causes price pressure on the sales markets. According to Verbio, the European Union launched an investigation into the matter in mid-August. Amounts in the billions are at stake, Verbio CEO Claus Sauter said.

Earnings before interest, taxes, depreciation and amortization (Ebitda) fell by slightly more than half to about 240 million euros in the 12 months to the end of June compared with the same period last year, he said. Operating profit was thus as high as the Group had last forecast when it lowered its guidance in April. On average, however, analysts had expected slightly better results. As in the previous year, management intends to pay a dividend of 20 cents per share.

The outlook for the current fiscal year was also disappointing. In 2023/24, Verbio is targeting an operating profit of 200 to 250 million euros. By contrast, the five experts surveyed by Bloomberg had previously had an average of just over 280 million euros on the cards.

The product mix of biodiesel and biomethane did help Verbio somewhat offset weak biodiesel prices, Jefferies analyst Martin Comtesse wrote. However, the company's operating profit will continue to suffer from imports from Asia in fiscal 2023/24, he added. "The outlook is rather disappointing," Comtesse said./jcf/lew/men