Src -
Disclosure : Invested and biased
Fermenta announced Q2 results yesterday and the numbers were fantastic.
Fermenta Q2 Results.pdf (2.5 MB)
- Sales grew 67% YOY to 95 Cr, boosted by the substantially increased Vit D3 prices
- OPMs have already turned around drastically from -24% last Q2 to +20% this Q. This meant EBITDA also turned around from ~(-20) Cr to 20+ Cr for the Q
- Most of the contracts for higher Vit D3 prices would only be fully signed in Q3, so in my thesis I assume a much stronger Q3 over Q2, with further increases in sales and OPMs. OPM in peak Vit D3 price cycle in 2019 for reference was ~39%.
- Company has restructured and reduced debt through recent real estate sales
At the same time, Vit D3 prices continue to hold strong comfortably above USD 30, and this should hold them in good stead for the coming year with a very low base of Q3β24, Q4β24 and Q1β25 ahead.
Disclosure : Invested
Things are getting only more interesting here - prices have moved up further to 50 EURO/kg and $40/kg. The company is also selling off non-core assets every other month, would be very nice if they started hosting concalls to shed more light on the intricacies of the business.
Disc - Invested and Bullish
What happened with Q3 results? Here are my quick thoughts.
1 EPS increased because of property sales only.
2 D3 revenue went up but margins seem very low ~10%
3 Market reacted positively at first and then brought it to 20% LC
Anyone have any comments or insights?
Invested at ~370 levels
Somehow the company managed to decrease margins from Q2 from ~16% to ~10% in Q3 when prices of vitamin D are rising. How is this possible? Company put up another document with revenue from vit D for multiple quarters but no information on margins. Scratching my head how they got this doneβ¦