Grifols floods the market with doubts and destroys 4,000 million euros of worth, on the lowest ranges of 2012 | EUROtoday

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Grifols has turn into the perfect instance to elucidate how a poor communication technique can result in an unprecedented disaster of confidence. Yesterday the Catalan blood merchandise firm introduced its annual accounts wherein it declared a web revenue of 59 million euros, 71% lower than the 12 months in the past, and document earnings, which exceeded 6,592 million euros. But all this was buried by two very atypical conditions amongst massive listed firms: the auditor, KMPG, has not ratified the annual accounts; and, two, one of many unbiased administrators has not signed them on account of his “absence due to a personal issue,” in line with what the corporate argued yesterday.

The lack of specificity within the solutions given through the convention with analysts held this Thursday prompted an avalanche of gross sales that led to inventory market panic. Since the board of administrators completed giving explanations at 3:30 p.m. yesterday, Grifols shares started a collapse that reached 35% on the time of closing, two hours later, to 7.58 euros, lows not seen since 2012 and that they’re under the primary downward development of the month of January, when the primary report from Gotham City was launched. It additionally coincided with the opening of Wall Street, the place Grifols is listed via ADRs and which yesterday fell simply over 20% inside minutes of closing. Just earlier than the beginning of the convention the shares fell about 3%. The firm once more left the media out of questions yesterday, with out the potential of intervening.

Since Gotham City printed its report on January 8, Grifols has misplaced virtually half of its inventory market worth, greater than 4 billion euros. Gotham celebrated the collapse with a meme on the social community X of applause.

The excuses given by Grifols administration, led by its president, Thomas Glanzmann, weren’t convincing. On two events the analysts questioned him each in regards to the investigation being carried out by the CNMV and the truth that the auditor of his accounts, KPMG, has not but given the inexperienced mild to the annual outcomes and the response of the present government president. It was transient and, primarily based on the response on the inventory market, inadequate. “We responded as quickly as possible to all questions [del regulador]. They are doing their job. “We're right here once they're prepared,” Glanzmann replied. who recalled that KPMG will have its audit report ready before March 8.

Sources familiar with the situation allege that the company “was conscious” that KMPG needed a longer period to ratify the accounts after “the extra data that the CNMV requested final week” from the company and that would also require the help of the auditor; among others, the contracts with Scranton, according to financial sources, which are not public nor are those of its investees, BPC Plasma and Haema. In any case, this is not a common situation in companies listed on the Ibex 35, financial sources point out. Nor is the fact that one of the directors does not sign the accounts.

Is about James Costos, independent director who joined Grifols in October 2020. He was the US ambassador to Spain between 2013 and 2017. The company justifies that Costos has not signed his semi-annual results because he has been absent for personal reasons and they clarify that “he has not expressed disagreement or opposition”. If this justification were proven to be false, the Catalan listed company would be exposed to sanctions from the regulator. This is what happened with Marcos de Quinto when he resigned from his position as a director at Telepizza in 2018. The CNMV fined the then listed company with 150,000 euros for lying about the reasons.

Many questions

And there are more. The accounts presented yesterday raise doubts about why BPC Plasma distributed a dividend of 266 million euros to Scrantonits owner, who is, in turn, a holding investor historically linked to the Grifols family, although the company has defended itself by arguing that only 20% of its directors have his last name. It does not say anything about the executives linked for years to the Catalan company, such as Toms ag, Jordi Fbregas or Juan Javier Roura.

This dividend would have been paid by reducing the value of BPC. “BPC Plasma distributed a dividend with out money outflow, offsetting different non-current monetary property (…) with an influence in opposition to the reserves of the group's non-controlling pursuits,” the company's financial statements clarify. “Something unprecedented,” say the sources consulted. “It's one thing I haven't seen in 30 years and I can't clarify it,” they acknowledge. Grifols has full control of the BPC business, although it is a 0% stake that it consolidates in its accounts, what is not known is how. This can be done because it has been reserved sine the the buyback option, together with Haema, for 530 million dollars.

It should be remembered that in 2018 Grifols acquired these two companies and immediately sold them to Scranton, which is the current and sole owner of them. For Grifols, they fall within related operations and both companies are consolidated in their results, although their participation is 0%. In the document presented yesterday, the listed company clarifies that it has over BPC and Haema the “energy to direct the related actions of those firms, on condition that it manages them and collectively determines their marketing strategy.” What it does not clarify is how much of the profit is consolidated (in the previous public appearance it pointed to 30 million euros of EBITDA between both) nor of the debt. The company has been asked by EL MUNDO in this regard and has not given a response. Furthermore, in the event of non-payment by either of the two companies, Grifols will be the one to stand up for them before the banks.

Another key issue is the indebtedness. Here the company has been highlighting its commitment to reducing debt for almost two months. At the end of 2023 this amounted to 9,925 million euros, 35 million less than the end of last year. It owes the banks 3,309 million, according to the value that appears in its books, 110 million less than in 2022.

The company has announced a debt ratio of 5.4 times because it already includes the sale of its stake in Shanghai Raas to Haier, for around 1.7 billion euros. Aspires to finish the year in all 4 times. This is one of the critical points highlighted by Gotham.

Likewise, Grifols, as announced yesterday, will repay the 1,800 million euros in maturities that it has in 2025 throughout the first half of the year. JP Morgan analysts reflected yesterday in their report how the panic had been transferred to the bond price, making investors “nervous”, though they’ve a optimistic imaginative and prescient of the agency within the medium time period.