Orpea's Shares Plunge as Full-Year Expectations Adjusted

Orpea, the French care-home group, saw its shares plummet on Thursday following a revised outlook for the full year, as the company dealt with increased costs. At 0739 GMT, the stock was trading 14% lower at EUR1.27 per share.

According to Orpea, the earnings before interest, taxes, depreciation, amortization, and rent costs (Ebitdar) are now expected to fall at the lower end of the previously set range of 705 million euros to 750 million euros ($748.6 million-$796.4 million).

During the first half of the year, Ebitdar experienced a 21% decline to EUR336 million. This decrease can mainly be attributed to rising payroll costs and other expenses such as energy procurement, food, and medical products. Additionally, the net loss widened to EUR371 million from EUR269 million.

Orpea commented on these developments, stating, "The increase in our costs in an inflationary environment have not been fully offset by price rises, leading to a reduction in our operating margin in the first half."

These disappointing results have caused concern among investors, leading to the decline in Orpea's shares.