A couple of days ago Acomo published its first half results: at a quick glance, they were all negative (revenues down -6%, EBIT down -22%), and the stock has lost about 8% since. The interim dividend has also been reduced (€0.40 vs €0.45 a year ago).
But digging a little deeper, they were not a real disaster: Spice&Nuts grew EBITDA by double-digit, and Edible Seeds also had improving sales and margins. Performance was really impacted by losses on cocoa futures contracts in the Tradin Organic business:
“The Organic Cocoa business had to recognize material realized and unrealized losses on its cocoa hedging position accounting for most of the decline in reported profits. Hedging through futures is common practice, however a 10-year high in market prices resulted in lower sales volumes, leading to a significant mismatch in the expiration date of the futures contracts and the sales of physical products. Corrective actions have been taken to mitigate this exposure going forward.”
Far from ideal, but hopefully a one-off thing.
On the positive side:
Debt keeps being reduced according to post-acquisition plans (although interest expenses are up due to higher interest rates)
Cash from operations have improved significantly: mostly thanks to better working capital management (i.e., reduction in inventories), a point that was highlighted in the original write-up
Heads-up: new company write-up being published soon, either today (Thursday) or more likely tomorrow (Friday)!
So Acomo is a company that has no pricing power on what they sell, as this are market quoted
It can go up or down, and even with the headging ... things can deteriorate