HMS Bergbau AG: Final Figures for Fiscal Year 2025 Published - Significant Earnings Growth and Positive Outlook

HMS Bergbau AG reported FY2025 EBITDA of EUR 60.1m (vs. EUR 20.1m prior year) and net profit of EUR 54.8m (vs. EUR 13.2m), with IFRS transition one-time valuation effects of ~EUR 37m. Group sales fell to EUR 1.22bn from EUR 1.36bn, but management expects FY2026 sales of EUR 2.0bn and EBITDA of EUR 55m (adjusted EBITDA rising from EUR 23.1m in 2025 to EUR 35m in 2026, excluding one-time effects). The company also suspended its current bond issuance due to mid-cap bond market conditions.

Analysis

The important signal is not the reported profit jump; it is that a material share of the apparent improvement comes from consolidation/accounting marks while the company simultaneously stepped away from the bond market. That combination usually means the equity story is more about financing capacity and inventory turns than about true operating torque, so the market should not pay a growth multiple for what may still be a capital-intensive trading business.

Over the next 1-3 months, the webcast is the key catalyst because management has to bridge the gap between headline earnings and fundable growth. If they can show recurring cash generation and limited working-capital drag, the suspended issuance will look temporary; if not, the market will reframe the company as a leverage-constrained commodity house that has to slow expansion or dilute. In that regime, larger, better-capitalized peers such as GLEN.L and BHP are the likely winners because they can extend credit terms, secure supply, and take share when smaller intermediaries cannot.

The contrarian view is that consensus may be over-indexing on the optics of IFRS-driven earnings and underpricing how quickly commodity price volatility can erase those gains. The thesis is falsified if the company reopens the bond window on acceptable terms and the 2026 webcast shows durable free cash flow conversion rather than asset-markup dependence. Absent that, any rerating is probably too early and too steep for a business with this funding profile.

Key Decisions for Investors

• Avoid chasing any long exposure to HMS ahead of the 6 July webcast; if the stock or local credit trades 5-10% higher on the headline, use that strength to fade until cash-flow quality is clarified.
• Relative long GLEN.L or BHP vs. smaller commodity-trading names on a 3-12 month view: the balance-sheet premium should widen if capital markets remain closed to mid-cap commodity issuers.
• Short HYG or JNK as a proxy for tighter mid-cap funding conditions for 1-2 months; this only works if credit spreads do not materially tighten before the webcast.
• Set an alert for any new debt terms or refinancing update: a successful issuance would invalidate the financing-stress thesis; failure to place debt keeps downside risk open for the next earnings cycle.