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09 May 2025

Logista Reports Declining Profits As Shares Plummet

Despite a drop in net profit, the company sees revenue growth in key markets.

Logista, a European distributor for convenience retailers, reported a net profit of 151 million euros for the first semester of its fiscal year, which runs from October 2024 to March 2025. This figure marks a decline of 5.4% from the 160 million euros reported in the same period last year. Following this announcement, Logista's shares fell sharply by approximately 6% on the Spanish stock exchange, reflecting investor concerns over the company's performance.

Despite the drop in net profit, Logista's operating profit showed a positive trend, increasing by 3.8% to reach 174 million euros. When adjusted for specific factors, the operating profit grew by 4.6%, amounting to 202 million euros. The company's revenues also saw a 3.5% rise, totaling 6,425 million euros, buoyed by strong performances in the Iberian and Italian markets, which effectively offset a decline in France.

In Iberia, Logista's revenues reached 2,467 million euros, a 9% increase compared to the previous year, with 1,966 million euros coming from the tobacco business alone. This segment experienced a notable growth of 9.9% in the first half of the fiscal year. Meanwhile, in Italy, revenues grew by 4.4%, reaching 2,239 million euros, all of which were derived from tobacco sales. However, the situation in France was less favorable, as revenues fell by 4.3% to 1,749 million euros.

Logista has also been managing its reciprocal credit line with Imperial Brands, its majority shareholder. This line is structured in two tranches: the first tranche allows for up to 1 billion euros at a rate of 3.615%, and the second tranche allows for up to 3 billion euros at a rate based on the six-month Euribor plus a spread of 0.75%. The average rate for the period was 3.78%, which is a significant decrease from the previous year's 5.25%. This reduction positively influenced Logista's financial results.

Economic sales for the logistics operator stood at 916 million euros during the first fiscal semester, reflecting a 6% increase from the same period in 2024. In Iberia, economic sales reached 606 million euros, a 6.4% increase, driven by growth in the tobacco and related products segment, which saw a rise of 12.5%. The pharmaceutical distribution and transport segments also contributed positively, with increases of 13.2% and 2.9%, respectively.

In Italy, economic sales surged by 12.1% to 213 million euros, thanks to improved rates and a favorable impact from inventory revaluation. However, in France, economic sales decreased by 9.3% to 101 million euros, attributed to reduced volumes of tobacco and other distributed products.

Looking ahead, Logista remains committed to its strategic plan, which focuses on growth and diversification within its business operations. The company has reiterated its intention to maintain a dividend policy, promising to distribute at least 2.09 euros per share during the 2025 fiscal year, matching the previous year's payout. This commitment is aimed at ensuring shareholder confidence despite the mixed results.

Analysts from Bankinter have expressed a mixed but cautiously optimistic view of Logista's performance. They noted that while the results were somewhat below expectations, they were largely in line with forecasts. Bankinter maintains a 'buy' rating on Logista's shares, valuing them at 30.1 euros. The firm pointed out that the company's financial results were impacted by a more moderate evolution in the transport segment due to macroeconomic conditions and the normalization of interest rates in Europe.

Bankinter's analyst Jorge Pradilla emphasized that the outlook for Logista remains positive in the medium term, despite the adjustments made to the financial forecasts. He indicated that the adjustments in financial income were expected given the current economic climate, particularly in light of the recent interest rate cuts by the European Central Bank.

Furthermore, analysts expect Logista to continue pursuing acquisition opportunities that complement and enhance its existing operations. The company is also focusing on expanding its pharmaceutical and last-mile delivery business in France and Italy, which could serve as catalysts for future growth.

As Logista navigates these challenging conditions, its commitment to maintaining a robust dividend policy and exploring new business avenues will be crucial in sustaining investor confidence and ensuring long-term growth.