Laura de la Quintana Madrid
Madrid
Updated Thursday, February 29, 2024-10:02
The CNMV requested additional information from Grifols a few days ago and has weeks left to publish its opinion
Grifols or accounting sepsis
Grifols has closed 2023, "a year of transformation" for the blood products firm and says it is prepared to "reinforce corporate governance" by separating ownership from management and simplifying the structure.
Thus begins the presentation of annual results marked by the conflict that Gotham City, a New York analysis firm with the spirit of a bearish investor, opened against the Catalan firm on January 8 of this same year.
The shares of the Catalan company
opened with a drop of close to 7%
after knowing the results, a drop that has moderated after the first few moments to around 3%.
Without any mention of the collapse caused by the publication of this report and which still today costs it 18% of its capitalization, Grifols has presented an EBITDA of 224 million euros at the end of the year, which is 38% less than the previous year, and a net profit of 59 million, 71% less, compared to 208 million in 2022.
The issue is that these accounts have not yet been audited by KMPG.
The company clarifies this in a footnote in which it claims to have "written confirmation from KPMG that it expects to complete its internal procedures and
issue its unqualified audit opinion before March 8, 2024.
"
Company sources assure that it is a common practice on the part of the auditor "as it has done in all previous years" and that
the audit report would have "taken more time than expected."
KMPG confirms this point and believes that it is a "matter of deadlines."
CNMV sources assure that companies have until April 30 to present their audited annual accounts.
It achieved
revenue growth of 10.9%, to a record of 6,592 million euros
.
Grifols recorded an adjusted gross operating result (Ebitda) of 1,474 million euros, which represents a margin of 22.4%, above forecasts, which exclude 223 million euros of extraordinary expenses that mainly comprise 159 million euros of restructuring costs.
DEBT
The Catalan company
continues to emphasize the need to
reduce its debt
.
It was one of the key aspects that the Gotham City report put on the table and that analysts who had been following the company for years also pointed out in their reports.
The point is that Grifols, after the sale of 20% of Shanghai Raas to Haier, has published this morning a pro forma debt of 5.4 times its EBITDA, which means reducing this ratio from the 7.1 times it closed in 2022. .
The company clarifies that
its objective continues to be to achieve
a debt to
EBITDA ratio of 4 times
by the end of the year and it sees itself in a position to do so, according to the forecasts it has given in connection with the presentation of results.
"It is expected to address the 2025 maturities [of nearly 2,000 million euros] in the first half of 2024 and we will seek to do so efficiently (...) including its refinancing," the company states in its statement.
The company's liquidity amounts to 1,100 million euros, of which more than 500 million are in cash.
Looking ahead to this year, the forecasts that the company has given are for revenue growth of 7% and an EBITDA of more than 1,800 million euros, with a profit margin of 27-28%, above 24 % of the fourth quarter of last year.
The family leaves
The organizational changes involve removing the Grifols family from the daily management of the company to guarantee better governance.
In this way, Raimon Grifols, Víctor Grifols Deu and Albert Grifols Coma-Cros, as corporate director, director of operations and executive director, will no longer be part of the 2024 accounts.
The company also announced the appointment of Nacho Abia as the new CEO.
He will take office on April 1.
Bassists
The publication of the Gotham City report which pointed to questionable links with the Scranton
holding company
, in the hands of the Grifols (although the company claims that only 20% of its directors are direct members of the family), and the manipulation of accounts to cover up the debt caused an unprecedented collapse in the price of the pharmaceutical company, which until then was trading at over 14.2 euros per share.
With today's fall, it loses 11 euros again, and still has losses close to 18% since that report was made public in January.
The truth is that beyond the bearish operation carried out by the
hedge fund
linked to Gotham City at the time - and which the CNMV is now investigating -
the
shorts
are still present in Grifols' capital.
Currently, two bears maintain their position in the company, according to the regulator's records (which only disclose those positions greater than 0.5% of the capital).
These are WorldQuant, with 0.5%, and Qube Research & Technologies, with 1.32%.
This London hedge fund has been increasing its position progressively since last January 29, despite the fact that Grifols' price has been recovering from the annual lows.
The CNMV confirmed this week that its verdict
on the Grifols case is weeks away, after requesting additional information from the company just a few days ago, after Gotham City made public a second (and brief) report on the firm. Catalan.
In any case, Grifols decided to denounce the founder of Gotham City, Daniel Yu, and everyone around him in the New York courts for spreading false information and required reparation for the damage caused, both reputational and economic.