Investing .com-- Umicore’s shares plunged more than 11% on Friday after the company’s latest earnings report failed to meet analyst expectations, raising concerns over its growth prospects.
The Belgian materials technology and recycling firm posted an adjusted EBITDA of €370 million for the second half of 2024, which aligned with consensus estimates but fell 2% short of Jefferies’ projection of €377 million.
Despite a strong performance in its specialty materials segment, disappointing results in battery materials weighed on overall earnings.
The company’s sales, excluding precious metals, totaled €1.657 billion, missing the consensus forecast of €1.802 billion.
Weakness in the battery materials division was particularly concerning, with adjusted EBITDA coming in at negative €6 million, far below the consensus estimate of breakeven.
This segment has been under pressure as global demand shifts and pricing dynamics in the electric vehicle supply chain remain volatile.
Jefferies analysts noted that Umicore’s focus on cash preservation was evident in its decision to lower full-year 2025 capital expenditure guidance by approximately 20% compared to 2024.
Additionally, the company announced a dividend cut to a yield of around 5%, a move that could signal a cautious approach to financial management amid market uncertainties.
The outlook for 2025 remains mixed, with Umicore (EBR:UMI) guiding for an EBITDA range of €720-780 million, which is broadly in line with Jefferies' estimate of €730 million but slightly below the consensus expectation of €745 million.
The company’s recycling segment is expected to deliver lower earnings year-on-year due to the expiration of favorable precious metal hedges, while catalysts and specialty materials are anticipated to remain stable or see modest growth.