The MDax group Varta shocked its investors. The battery manufacturer conceded its previous goals completely with a profit warning. The company announced on Friday that the forecasts for sales and earnings in the current year and the third quarter could no longer be achieved. The board of directors headed by Herbert Schein (53) is currently unable to make new forecasts. Varta can only pass on the high energy prices to customers to a limited extent and with a delay. In addition, two large orders were delayed, which is why “significant volumes” could no longer be delivered this year.
The warning surprised investors. The Varta share price fell by around a third to its lowest level since May 2019. The course had already come under pressure in the morning because of concerns about battery competition in the latest generation of AirPods Pro from Apple gave; Varta itself produces, among other things, button cells for headphones and hearing aids. Since the turn of the year, the paper has lost almost two-thirds of its value. Compared to the record high of just over 180 euros in January 2021, the market value even fell by almost 80 percent to just under 1.7 billion euros.
Varta was one of the meme stocks whose value was skewed by hype early last year. At that time, price speculation by small investors, mostly gathered in social networks, in stocks such as Gamestop or AMC Entertainment from the United States or Varta caused strong price swings.
After the real estate financier Hypoport, which had also completely cashed in on its forecast on Thursday evening, and its shares lost more than a third of its value had, Varta was the second company to shock its investors at the end of the week. Varta’s major shareholder is the controversial Austrian entrepreneur and billionaire Michael Tojner (56).
Varta had already lowered its annual targets at the beginning of August. The management cited the gloomy economic prospects and high raw material, energy and transport costs as justification. In addition, customer projects were already being delayed at the time. Most recently, CEO Schein had forecast annual sales of 880 to 920 million euros and earnings adjusted for special effects (Ebitda) of 200 to 225 million euros.
At the same time, Varta had been struggling with weak demand for a much longer time. Because, among other things, the customers were missing parts to complete wireless headphones, for example, there was a problem in the once booming main business with lithium-ion button cells at the start of the year.