Biomethane production again at a new record level in Q2 2022/23

Leipzig, February 9, 2023 – VERBIO generated Group sales revenues of EUR 1,077.7 million (1 HY 2021/22: EUR 809.1 million) in the first six months of the financial year 2022/23, an increase of 33 percent compared to the same period in the previous year. The increase in sales revenues compared to 1 HY 2021/22 is primarily due to the higher average sales prices of both biodiesel and bioethanol. At EUR 170.3 million, VERBIO’s earnings before interest, taxes, amortisation and depreciation (EBITDA) remained below the figure for the same period of the previous year (1 HY 2021/22: EUR 187.2 million). A total of 1.5 million tonnes of CO₂ savings* were generated for our customers, with approximately 40 percent of the savings already stemming from advanced second generation biofuels.

Solid Q2 2022/23 thanks to the Group’s diversified product portfolio

VERBIO generated solid results with sales revenues of EUR 485.5 million (Q2 2021/22: EUR 458.7 million) and an EBITDA of EUR 48.9 million (Q2 2021/22: EUR 147.0 million). EBITDA was below the extraordinarily high level seen in the same period in the previous year and below the level of the previous quarters. This was primarily due to falling sales prices, in particular for bioethanol, driven by imports from Brazil and the USA, while at the same time raw material prices were higher and energy costs increased sharply (> 400 percent compared to Q2 2021/22). Current trends indicate that conditions will ease in the second half of the financial year.

In the Biodiesel segment VERBIO generated sales revenues of EUR 357.4 million, a 10 percent increase compared to the same period in the previous year (Q2 2021/22: EUR 324.1 million) as a result of higher sales prices for high-value glycerine and for biodiesel in North America. Higher procurement prices for raw materials had a negative effect on results. EBITDA remained significantly above the long-term average, but fell to EUR 47.0 million from EUR 96.1 million in Q2 2021/22. In the same period of the previous year VERBIO benefited from attractive hedged prices.

In the Bioethanol segment VERBIO achieved a new volume production record, producing 261.1 GWh of biomethane in Q2 2022/23. VERBIO is continuing to follow the strategy of increasing inventory of biomethane in order to be able to capture the entire product margin using its own BioCNG/BioLNG infrastructure. Although VERBIO increased the sales volume of bioethanol and achieved higher GHG premiums in the second quarter, it was not possible to compensate entirely for the fall in the ethanol price (-20 percent compared to Q2 2021/22). Sales revenues amounted to EUR 123.3 million, 6 percent lower than in the same quarter of the previous year (Q2 2021/22: EUR 131.7 million). The cost burden of the massive increases in energy and raw material prices resulted in an EBITDA of EUR 1.7 million (Q2 2021/22: EUR 50.2 million). With the increase in inventories for biomethane, the full earnings benefit from the advanced biofuel will be visible in future periods.

VERBIO continues to build on its market position in both geographic and product terms. In the second quarter VERBIO invested EUR 52.0 million in an additional expansion to the biorefinery in Nevada, the BioLNG/BioCNG filling station network, and the expansion of its advanced biofuels capacity in Germany. Net financial assets at December 31, 2022 totalled EUR 177.5 million (June 30, 2022: EUR 284.1 million) and the Group’s equity ratio was 74.0 percent (June 30, 2022: 72.5 percent).

Forecast confirmed

The numbers for the first half of 2022/2023 are a good basis for the ongoing financial year. In view of the current prices for goods sold and the prices of raw materials, VERBIO confirms the forecast published on September 27, 2022 in its Annual Report 2021/2022 of full year earnings (EBITDA) of EUR 300 million.

Over the course of the rest of the financial year further investments will be made in capacity expansion, product diversification and internationalisation, and accordingly the Management Board continues to expect net financial assets at the end of the financial year 2022/2023 to be approximately EUR 30 million.

The forecast is made subject to the proviso that the continued course of the Russian aggression in Ukraine and its consequences do not have a significant further negative effect on the market for biofuels and, in particular, on the procurement of raw materials and energy.

VERBIO key figures

*under the current regulatory framework