(News Bulletin 247) – The group specializing in energy distribution lowers its gross operating profit target, citing a combination of macroeconomic factors and operational impacts, to justify this adjustment. Rubis is more positive on its net profit outlook and confirms its dividend policy for 2024.

Ruby does not shine this Thursday. The specialist in energy distribution (fuel, LPG, bitumen) fell by 8.4% around 10:30 a.m., showing the biggest decline in the SBF 120 index.

The group is sanctioned by the Paris Stock Exchange after having lowered one of its financial objectives, namely its forecast gross operating profit (RBE) for 2024.

Headwinds

The energy distribution specialist now expects gross operating income of between 675 million and 725 million euros in 2024, compared to a previous estimate of 725 million to 775 million euros, which was renewed in July last, and after 798 million euros revealed in 2023.

To justify this adjustment, Rubis cites a “combination of macroeconomic factors and operational impacts”, such as the “recent escalation of conflicts in the Middle East [créant] a very volatile environment over the last few months with strong fluctuations and a general downward trend in oil prices.” “These developments have a direct short-term impact on the valuation of the stocks of the group’s fuel distribution activity” , adds Rubis.

Furthermore, the group was expecting an adjustment to the pricing formula in Kenya in the second half of 2024, which has not yet taken place. Rubis specifies that this revision is taking longer than expected and creates a gap with its initial forecasts. Finally, the group must deal with maritime transport activity whose level is lower than expected.

Profitability was already the black point of Rubis’ first half publication. The group was heavily sanctioned at the beginning of September after announcing a 20% drop in its current operating profit at the end of June.

A dividend policy maintained

Rubis therefore did not wait for the publication of its nine-month activity update scheduled for Thursday, November 5, to announce the revision of its gross operating profit objective to the market. However, this lowering of the target will not have any impact on the group’s net profit objective, recalls the financial intermediary.

The energy distribution specialist is taking advantage of this update to refine its net profit forecasts to take into account a higher than expected capital gain relating to the sale of Rubis Terminal, its former energy storage activity. . Also, foreign exchange losses for the second half of 2024 should be lower than Rubis’ initial forecasts, which will be beneficial for overall financial performance.

The group now expects a net profit, group share, of between 340 million and 375 million euros, while it forecast a “stable” result of 354 million euros compared to 2023.

Rubis has confirmed its shareholder return policy for the 2024 financial year. The group is committed to ensuring that the coupon increases compared to 2023, in addition to the interim dividend of 0.75 euros per share relating to the sale of Rubis Terminal.

Following these announcements, Oddo BHF lowers its earnings per share forecasts by 5% on average for 2025 and 2026 and revises its price target downward to 32 euros, with an “outperform” rating.

“This warning on Ebitda (gross operating income) 2024 can only encourage activist shareholders to put pressure on management to modify its growth strategy which is not bearing fruit,” concludes the intermediary financial.

In March, the famous businessman Vincent Bolloré entered the group’s capital by taking 5%, which propelled the company’s price. The market appreciated the announcement because Vincent Bolloré is known to have an excellent track record in his equity investments on the stock market. Businessmen Patrick Molis and Ronald Sämann had also exceeded 5% of the capital in the process.

Last June, Patrick Molis attempted to renew a large part of the Rubis board of directors and thus impose a palace revolution. But his proposals were all rejected by Rubis shareholders during a general meeting, although by a relatively small majority. Ronald Sämann joined the board.