Grifols SA shares dropped as investors evaluated a regulatory review of the Spanish bio-science company's financial reports, which found "relevant deficiencies" but no major accounting mistakes.
The stock declined as much as 9.1% in Madrid on Friday after earlier rising by 8.8%. The plasma therapeutics developer has lost half its value this year and its bonds have sold off, with S&P Global Ratings this month cutting its ratings for the company, citing refinancing risks.
The regulator said the main deficiency was "in the use of adjusted EBITDA" relating to non-controlling stakes in other companies, according to a statement published Thursday. "No significant errors" have been identified in financial reports nor has any evidence been found that "the leverage ratio reported by Grifols isn't aligned with reality," it added.
The regulator opened its review of Grifols' earnings in January after the company was targeted by short-seller Gotham City Research, which accused Grifols of deceptive accounting and poor governance. While Grifols has denied the allegations, its shares have suffered.
The company has made several attempts to calm investors, including naming a new chief executive officer and reducing the role of the founding Grifols family, who remain the firm's largest shareholder.
The regulator has given Grifols 15 days to publish "commitments to adequate its alternative performance metrics in upcoming financial reports" as well as additional data on EBITDA and net financial debt for relevant companies in which it has non-controlling stakes. The regulator said that the conclusions of its review could potentially lead to sanctions for Grifols, though that decision may take several months.
Grifols is committed to "improving and expanding the disclosures in its financial information," it said in a statement. Areas for improvement include adding more information to the notes of some full-year accounts, explaining related-party transactions and providing greater detail in the presentation of non-accounting financial performance indicators, like EBITDA and the leverage ratio, the company said.
The stock traded 6% lower at €7.918 as of 12:47 p.m. in Madrid.
