Graanul - comment

The Q1 numbers are in line with our view. The financials are the secondary focus for Graanul, and all eyes will be on the Company’s plan to secure off-take agreements beyond FY26, which is required before any refinancing is attempted. 

The results show pellet volume was 10% lower than the previous year (and vs. our model), with production volume also lower than our model. These differences result in a flat EBITDA for the year, lower than our expectations. Cash flow is stronger, due to the seasonality of working capital. We will update our model for the actual numbers, but will maintain our view that it will remain impossible to refinance without equity injection. 

The Company cancelled its conference call for Tuesday next week, citing scheduling conflicts. It is not a good look, and we are not sure whether to read more into it.