(News Bulletin 247) – The recycling and community services group managed to generate 31 million euros of free cash flow in the first half.

There was not much suspense over the publication of Derichebourg’s accounts. The specialist in metal recycling and community services issued a profit warning in mid-April, citing both the consequences of a cyberattack that occurred in November and a deterioration in the economy.

Without too much surprise, the final accounts delivered by the company on Wednesday evening show a clear decline. Turnover fell by 4.9%, current gross operating surplus (Ebitda) fell by 20.8% to 142 million euros, in line with the range of 140 million to 145 million euros. ‘euros indicated by the company in April, and net profit of 56.1%.

The company was notably penalized by falling volumes in its recycling business, due to weaker demand from European metallurgists and steelmakers.

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Cash is king

“We are improving our relative performances compared to the main market players. The reduction in current Ebitda over this first half is lower in percentage than those observed among the group’s main listed competitors,” argues Daniel Derichebourg, the Chairman of the Board of Directors.

However, Derichebourg shares progressed on the Paris Stock Exchange, gaining 4% around 3:20 p.m., after opening clearly in the red.

This is because the publication includes a satisfactory element which is not included in the income statement: cash.

“The positive point of the publication lies in the generation of free cash flow which amounted to 31 million euros during the first half of 2024 despite the 21% drop in Ebitda and a very high amount of capex (investment expenditure, Editor’s note)”, underlines TP ICAP Midcap.

As a result, the company reduced its debt by just under €4 million to €769.2 million and met its debt ratio commitments to its creditors (“covenants”), notes the design office.

TP ICAP reiterated its purchasing advice following this publication. “Despite difficult market conditions, the group’s profitability should mechanically benefit from the reduction in energy bills, the recovery of Elior (of which Derichebourg holds 48.17% of the capital) and the group should significantly reduce its debt,” explains the design office.