Before the bell: Set Your Clock by Montea.

Set Your Clock by Montea. At Tessenderlo, Picanol Recovered, but Gelatin Did Not. Long Live Trump and Belgium’s Pharma Stars UCB and Argenx.

Thursday’s 0.3% gain may seem modest, but in a week of stumbling indices, the Bel20 once again stood out yesterday, as few others did better. Once again, Belgium’s pharma champions Argenx (+2.3%) and UCB (+1.9%) were the driving forces. After the trade deal between the US and the EU, a note clarified yesterday that EU pharmaceuticals—like most other products—will face a maximum import tariff of 15%. Given Donald Trump’s frequent threats against pharmaceutical companies, especially foreign ones, that is welcome news. Of course, with a US president like this, nothing is ever guaranteed.

In Brussels, there was a flurry of earnings yesterday: before the bell Kinepolis (-6%), Tessenderlo (see below), VGP (+1%), and after hours Montea (see below). No major disappointments, though the cinema operator’s share price had already climbed in anticipation of results.

This morning in Asia, the Hang Seng Index in Hong Kong and the Topix in Tokyo both gained 0.5%. Shanghai advanced 1%. Traditionally, few companies bother investors with earnings right before the weekend. Still, What’s Cooking thought a doubling of profit was worth reporting. At 16:00 Belgian time, Jerome Powell of the US Federal Reserve will speak at the annual Jackson Hole gathering. The chance of hearing anything new is slim—it will likely be a repeat of what we already know—but you never know. Rates do matter.

Real Estate!

Some companies are so reliable you can set your clock by them: their results consistently beat their own targets. Logistics real estate specialist Montea is one of those. Profit rose 20%. Adjusted for the additional shares issued in a standard capital increase, that was still +6% per share. Rental income grew 3.7% through indexation. Renewals came in at more than 6% higher rents, showing that tenants are keen to stay. The occupancy rate remains nearly perfect at 99.7%.

The ambitious Track 27 investment program is already more than halfway complete, with over 75% secured by contracts. Montea reconfirms earnings per share of at least 4.9 euro (+8%) this year and a dividend of 3.90 euro (+8%). Based on yesterday’s closing price (69.1 euro), the dividend yield is 5.6%. Net, that is 3.95%.

Mixed Bag

Investors appeared disappointed yesterday, judging by the 1.7% drop in Tessenderlo’s share price after it released results in the morning. But with the stock up nearly 40% since the start of the year, this was more a case of “sell the news.” Results showed improvement—though, like the share price, from a low base. Revenue rose 7% (vs. 3% expected), while adjusted EBITDA increased 8%, also slightly better than expected.

The main activity, fertilizers, performed in line, while gelatin operations remained weak. However, that division is in the process of being largely spun off through a merger. The “Machines & Technology” division, mainly Picanol, offset weaker segments with strong growth. Unfortunately, management warns that Picanol will not be able to sustain this in the second half of the year, as global trade uncertainty is likely to dampen orders. For now, Tessenderlo remains a low-valued conglomerate that requires patience, with any turnaround likely coming as a surprise.

Did you know…

West Flemish transport company Eutraco has ordered 50 electric Mercedes trucks? After running the numbers, the company concluded that many routes can be operated profitably on electric power.

This article was translated from Dutch and was originally published on Spaarvarkens.be.