Fibria ends third quarter with best result ever
- Net income was R$1.130 billion, growing 52% from 3Q17;
- Adjusted EBITDA in 3Q18 was a record R$3.269 billion, 160% higher than in 3Q17;
- EBITDA margin excluding sales from the contract with Klabin also set a new record, of 63%;
- Pulp production was 1.8 million tons, or 25% more than in 3Q17;
- Pulp sales volume was approximately 2.0 million tons in the quarter, up 35% from 3Q17;
- Net revenue was a record R$5.836 billion, advancing 105% from 3Q17;
- Free cash flow was R$1.540 billion in the quarter, bringing the total in the last 12 months to a record R$3.960 billion;
- Net debt/EBITDA in USD stood at 1.18 times, the lowest ratio since the company’s creation.
São Paulo, October 24, 2018 – The performance in the third quarter of 2018 of Fibria, a Brazilian company that is the world’s leading producer of eucalyptus pulp from planted forests, was marked by new records and positive highlights. The Company’s Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) set a new record of R$3.269 billion. The growth of 160% compared to the third quarter of 2017 is mainly explained by sales volume growth, the 22% increase in the average pulp net price in USD and the 25% appreciation in the average BRL/USD exchange rate. EBITDA margin, which excludes sales of pulp from Klabin, set another record in the quarter, of 63%.
Pulp production volume in 3Q18 was 1.8 million tons, 25% higher than in 3Q17, which basically is explained by the production ramp-up of the second mill built in Três Lagoas, Mato Grosso do Sul, which during the quarter operated at its nominal capacity for the first time, and by the lack of scheduled maintenance downtimes during the quarter. Sales came to 1.988 million tons, growing 35% on the same period last year, driven by the solid performance of demand, especially from Asia and Europe. Fibria posted net income of R$1.130 billion in the quarter, 52% higher than in the year-ago quarter.
Fibria’s production cash cost in the third quarter stood at R$584/ton, down 13% from the second quarter of 2018, mainly due to the lack of scheduled maintenance downtimes, the better result from energy sales, the lower consumption of chemicals and energy due to efficiency gains and the lower wood costs.
“This quarter Fibria delivered its best results since its founding in 2009. Supported by good market fundamentals, operating efficiency gains and the stronger dollar, net revenue, sales volume, EBITDA and EBITDA margin reached record highs, attesting to the company’s cash generation capacity and the structural competitiveness of its assets and global operations,” said Marcelo Castelli, Fibria’s Chief Executive Officer.
Financial leverage fell to its lowest level since the Company’s founding, with the ratio of net debt to EBITDA in U.S. dollar standing at 1.18 times. Free cash flow in the last 12 months also set a new record, of R$4 billion. In the third quarter, free cash flow before capital expenditures on the expansion project at the Três Lagoas Unit, logistics projects, land acquisitions and dividends amounted to R$1.540 billion.
“This quarter our leverage ratio fell to its lowest level ever, benefitting from the strong EBITDA growth the last 12 months and from the reduction in net debt. The cash balance ended the quarter at R$8.630 billion, a 20% increase from the balance at end of the second quarter that was mainly driven by cash generation in the period,” said Guilherme Cavalcanti, Fibria’s Chief Financial and Investor Relations Officer.
In accordance with the Material Fact notice dated March 16, the controlling shareholders of Fibria, namely Votorantim S/A and Banco Nacional de Desenvolvimento Econômico e Social Participações S/A (BNDESPar), entered into an agreement with Suzano Holding S/A and with the other controlling shareholders of Suzano Papel e Celulose S/A to combine the shareholdings of Fibria and Suzano through an ownership restructuring. Until the date of the transaction’s consummation, which is pending approval by the regulatory authority of the European Union, Fibria and Suzano will continue to operate independently. The regulatory authorities in the United States, China and Turkey already have approved the transaction. On October 11, Brazil’s antitrust authority CADE approved without restrictions the transaction between Fibria and Suzano. For a period of fifteen (15) days as from the decision’s publication date, the case is still subject to appeals from third parties or to being submitted for review to CADE’s Administrative Court, in accordance with governing law. If no appeals or inquiries are filed in this period, the transaction between Fibria and Suzano will be considered formally approved by CADE.
The world leader in eucalyptus pulp production, Fibria strives to meet, in a sustainable manner, the growing global demand for products from planted forests. With annual pulp production capacity of 7.25 million tons, the company has industrial units in Aracruz (Espírito Santo), Jacareí (São Paulo) and Três Lagoas (Mato Grosso do Sul), as well as in Eunápolis (Bahia), where it operates Veracel in a joint venture with Stora Enso. Fibria has 1,092,000 hectares of forests, which include 656,000 hectares of planted forests, 374,000 hectares earmarked for environmental preservation and conservation, and 61,000 hectares destined for other uses. The pulp produced by Fibria is exported to more than 35 countries and is the raw material for educational, health, hygiene and cleaning products. Learn more at www.fibria.com.br
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