Brussels-based Tessenderlo Group shares slumped as much as 9.5% on March 27 after reporting full-year adjusted EBITDA that missed estimates. KBC Securities said the Belgian chemicals company posted “poor” full-year results and guidance was “clearly a disappointment,” according to Bloomberg.
Adjusted EBITDA was €318.7 million, down 27% from the year-ago €434.8 million and below the Bloomberg Consensus estimate of €366 million. The group expects 2024 adjusted EBITDA in line with that of 2023. Revenues were €2.93 billion, up 13.2% from the year-ago €2.6 billion. Analyst estimates were €3.14 billion.
“For 2024 we are expecting that the first half of the year will still be under pressure, but we see gradual improvement towards H2, because in H1 we are still stressing out expensive inventories from last year, which are being sold at bad margins,” CEO Luc Tack told analysts in an earnings call.
The Agro segment posted full-year adjusted EBITDA of €82.3 million on revenues of €793.9 million, down 52.5% from 2022’s €173.4 million and €974.5 million, respectively. The company cited lower volumes and margin pressure due to decreasing selling prices in combination with high-valued inventory. The NovaSource unit increased its adjusted EBITDA, helped by the contribution of the Lannate® product line acquired in the second half of 2022.
Tessenderlo said the construction work for new plants in Defiance, Ohio, and Geleen, Netherlands, remains on schedule. Defiance will produce Thio-Sul®, KTS®, and K-Row 23® (Agro segment) and sulfite chemicals for industrial markets (Industrial Solutions segment). The plant is scheduled to start operations by the end of 2024. The Geleen Thio-Sul plant (Agro) is expected to be operational in mid-2024.
Company-wide, second-half 2023 adjusted EBITDA was off 39.3%, to €113.6 million from the year-ago €187.2 million, while revenues were up 4.3%, to €1.3 billion from €1.25 billion. Second-half Agro adjusted EBITDA was off 25%, to €38.8 million from the year-ago €51.8 million. Revenues were down 18.3%, to €350.3 million from €428.6 million.