Befesa with great numbers, great outlook – but the share is falling

The recycling company Befesa delivers the best quarterly results in the company’s history and gives a strong outlook for the current financial year. But the stock falls, at times very significantly. It is possible that some investors act on the principle: “Buy the rumors, sell the facts.”

The course reaction to the quarterly report is difficult to understand. The company, which recycles steel dust and disposes of aluminum slag in an environmentally friendly manner, increased its quarterly profit by 69 percent over the previous year to 24.8 million euros. Sales increased by 7.6 percent to 192.6 million euros.

Befesa also reports that capacity utilization has reached pre-Corona levels. In addition, the construction of the first plant in China has been completed and commissioning is imminent. The company also benefited from a rise in zinc and aluminum prices and a simultaneous decline in so-called treatment charges.

For 2021, the Management Board expects an EBITDA increase of between 30 and 50 percent and a positive volume development. The expansion in China is scheduled to be completed in the second quarter. A dividend of EUR 1.17 per share is planned for 2020.

It is not clear why the stock corrected so sharply. The quarterly report and the outlook leave nothing to be desired. Those who are invested stay calm. The stock should make new highs again soon.