Grifols Faces a 71.5% Profit Drop After Gotham’s Attack, 2023 Accounts Still Unaudited

GRifols

The Catalan pharmaceutical company Grifols recorded a profit of 59.3 million euros in 2023, marking a 71.5% decline compared to the previous year’s earnings of 208.3 million, as per the accounts presented on Thursday. This comes amid the aftermath of the offensive by the U.S. hedge fund Gotham City, which has been questioning the figures of the hemoderivatives company.

The accounts presented by Grifols have not been audited yet by KPMG. The company has stated that “it has received written confirmation from KPMG that it expects to complete its internal procedures and issue its audit opinion before March 8, 2024, anticipating the deadline set by current Spanish legislation.”

Furthermore, the accounts were not signed by one of its board members, Jaime Costos, who was absent “for personal reasons” at the board meeting held on Wednesday in Barcelona, according to the pharmaceutical company. However, the company has assured that Costos has not expressed “any disagreement or opposition to the submitted documentation,” as stated in the company’s annual report sent to the National Securities Market Commission (CNMV).

Grifols has reported record revenues of 6.592 billion in 2023, an increase of 8.7%. The Catalan firm, achieving positive earnings and reduced leverage, emphasized that its net profits include “non-recurring items worth 147 million euros, mainly related to restructuring costs,” according to company sources.

The pharmaceutical company recorded an adjusted gross operating profit (Ebitda) of 1.474 million, representing a margin of 22.4%, surpassing expectations. These exclude 223 million euros in extraordinary expenses, primarily comprising 159 million euros in restructuring costs.

The forecasts for 2024 include revenue growth of over 7% in constant terms and an adjusted Ebitda above 1.8 billion euros.

Stock Market Collapse

Grifols’ shares plummeted by 34.93% on Thursday, marking the worst stock market session in its history. The stock fell to 7.584 euros, the lowest since March 2012.

Grifols opened the session, following the 2023 results, with a more than 6% decline, trading at 10.865 euros per share. However, the losses intensified during the final stages of trading, especially after the analyst meeting. As a result, the share price dropped by four euros compared to Wednesday’s closing, reaching the mentioned 7.594 euros.

Year-to-date, Grifols has lost half of its market capitalization, with a stock market decline of 50.93%. As of Thursday’s close, its market value stood at around 4.5 billion, far from the nearly 10,000 million at the end of 2023.

The company stated that, as part of efforts to improve corporate governance, they will implement “relevant improvements whenever necessary.” They emphasized simplifying structures and avoiding new transactions with related parties, addressing concerns raised by Gotham City Research about the relationship with Scranton.

The Latest Results with the Grifols Family in Charge

These are the latest results for the hemoderivatives company with the Grifols family (specifically, Raimon Grifols, Víctor Grifols Deu, and Albert Grifols Coma-Cros) in executive roles on its board. This occurs against the backdrop of the firm’s crisis following Gotham City Research’s recent offensive, questioning its financials and sustainability.

In particular, the company, which announced governance changes earlier this month, appointed Nacho Abia as CEO, effective April 1. Thomas Glanzmann continues as executive chairman, while Raimon Grifols, Víctor Grifols Deu, and Albert Grifols Coma-Cros remain as Sunday advisors.

Thus, the three family members have concluded their executive roles within the Catalan company, stepping down from their positions as corporate director, operations director, and executive advisor, respectively.

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