Eurofins Scientific (EUFI.PA), a leading French laboratory testing company, announced today that an independent audit conducted by Ernst & Young Paris has found no material misstatements in its cash statements. This audit effectively counters allegations made by short seller Muddy Waters, which had raised concerns about Eurofins’ financial integrity.
The controversy began on June 24, when Eurofins shares plummeted by over 16% after Muddy Waters questioned the company’s financial statements and certain real estate transactions. In response, Eurofins firmly denied the allegations and committed to addressing the claims head-on.
The findings from the recent audit are expected to bolster Eurofins’ market position, which has shown signs of recovery since the initial drop. The audit did identify two minor exceptions exceeding €100,000 (approximately $108,220), resulting in a total overstatement of €1.2 million. However, these discrepancies were deemed immaterial and have already been corrected in Eurofins’ half-year 2024 financial statement.
In a strategic move, Eurofins has slightly adjusted its revenue guidance for the full year, now projecting revenues close to €7 billion, down from an earlier forecast of between €7.075 billion and €7.175 billion.
The scrutiny from Muddy Waters prompted the formation of a subcommittee to investigate the allegations more thoroughly. The committee’s memo emphasized that broadcasting criminal trials could negatively impact witnesses and victims, reinforcing the need for caution in such matters.
Muddy Waters’ report included various claims regarding Eurofins’ accounting practices and real estate transactions, suggesting that the company’s financial reporting was designed to create confusion. However, Eurofins has categorically rejected these assertions as false and misleading.
In light of these developments, Eurofins is considering commissioning an additional independent audit of its cash pooling arrangements to further reassure stakeholders about its financial health.
The company’s management has expressed confidence in its operational integrity and commitment to transparency. “We are pleased that the independent audit has confirmed our financial statements,” said a spokesperson for Eurofins. “We believe this will restore confidence among our investors and clients.”
As Eurofins navigates through this challenging period, it remains focused on delivering high-quality services while ensuring compliance with regulatory standards. The company continues to engage with its stakeholders to provide updates on its progress and address any concerns related to its operations.
With the independent audit results now public, Eurofins aims to stabilize its market position and continue its growth trajectory in the laboratory testing sector. The company is committed to maintaining open lines of communication with investors and clients as it moves forward.
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