Shares of French residential care firm Orpea fell by 3.5% to EUR1.01 today, following an announcement about a delay in operational improvement. The company now targets earnings of $1.29 billion by 2026, pushing back from its original target year of 2025. This change comes in the wake of rising personnel costs which have also led to a reduction in margins from 20% to 19%.
Orpea has previously made adjustments due to inflation and price hikes. The company estimates its EBITDAR for 2023 to be around EUR710 million. It is also planning the first of three imminent capital increases, pending approval.
Despite this setback, Orpea reported a Q3 organic revenue increase of 10% to EUR1.3 billion. This growth was driven by higher average occupancy rates and price increases.
Looking ahead, Orpea expects its financing capacity to be restored by 2025-26. This will enable it to refinance the remaining loans established with its primary banking partners in June 2022, ensuring the long-term viability of the company.
InvestingPro Insights
Drawing from real-time data and insights provided by InvestingPro, it's clear that Orpea is facing some significant challenges. The company operates with a substantial debt burden and its earnings per share have been on a declining trend. Furthermore, Orpea's revenue growth has been slowing down recently, which is consistent with the recent announcement about the delay in operational improvement.
From an InvestingPro data perspective, Orpea's adjusted market capitalization stands at 70.11M USD. The P/E ratio, a key indicator of valuation, is currently at -0.02, suggesting that the company is not profitable. This aligns with the InvestingPro Tip indicating that analysts do not anticipate the company will be profitable this year. The company's revenue for the last twelve months as of Q2 2023 is 5374.96M USD with a growth rate of 8.89%.
InvestingPro offers a wealth of additional tips and data for investors looking to delve deeper into the financials of companies like Orpea. These insights can provide a broader understanding of a company's financial health and market position, which can be invaluable when making investment decisions.
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