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Updated on 25.07.2016

MídiaReleases

July 25, 2016 - Fibria distributes dividends of R$304 million in 2Q16 and reports net income of R$745 million

  • Net income in 6M16 of R$1.7 billion
  • Sales volume growth to 1.342 million tons
  • Net revenue in 2Q16 of R$2.4 billion
  • EBITDA in quarter of R$925 million
  • Free cash flow before expansion CAPEX and dividends of R$413 million

São Paulo, July 25, 2016 Fibria, a Brazilian forestry company and the world’s leading eucalyptus pulp producer, reported net income of R$745 million in the second quarter of 2016. In the first six months of the year, a positive net income amounted to R$1.7 billion, compared to R$ 48 million in the first half of 2015. In the second quarter of 2016, Fibria paid dividends in excess of the mandatory minimum, with a total of R$304 million distributed to shareholders.

Free cash flow before capital expenditure in the Horizonte 2 Project and the distribution of dividends remained strong in the second quarter, amounting to R$413 million. In the first six months of the year, free cash flow exceeded R$1 billion.

Cash cost of pulp production stood at R$662 per ton in the second quarter of 2016, down 5% from the first quarter, which shows the strong ongoing focus on cutting costs and capturing operating efficiency gains. Cash cost was also impacted by the lack of scheduled maintenance shutdowns and by the depreciation in the U.S. dollar against the Brazilian real. In the last two months of the quarter, Fibria’s cost performance was even better, with an average cash cost in May and June of R$639 per ton of pulp produced.

“Fibria is known for its operational excellence, its strong focus on controlling costs and its shared creation of value. Despite the highly challenging environment for FX rates and pulp prices, we managed to reduce our cash cost, maintain our investments and distribute dividends to shareholders above the minimum amount,” said Fibria CEO Marcelo Castelli.

Sales volume amounted to 1.342 million tons, increasing 18% from the prior quarter, reflecting the higher sales volume to Asia and North America and the start of sales of pulp manufactured at Klabin’s Puma Project, which is the result of a commercial agreement entered by the two companies in May 2015. The agreement establishes a firm commitment for the acquisition by Fibria of a minimum annual volume of 900,000 tons of hardwood pulp for export exclusively to countries outside of South America.

Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) amounted to R$925 million in the second quarter. In year to June, EBITDA was R$2.2 billion. Pro forma EBITDA margin, which excludes Klabin’s pulp sales, stood at 43% in the quarter.

Fibria ended the second quarter with net debt in of US$3.0 billion, which is practically stable from the end of the first quarter. Financial leverage, as measured by the ratio of net debt to EBITDA, stood at 1.86 times in Brazilian real and 2.10 times in U.S. dollar, which is accord to the planning and within the limits established by the company’s financial policy.

“We ended the second quarter with a cash position of R$3 billion, which, combined with our financing facilities and financing for the Horizonte 2 Project, represents sufficient liquidity to meet the company’s financing requirements through 2018. And this is without considering the company’s cash generation capacity until then, which will grow significantly with the startup of the Horizonte 2 Project, which is the second production line currently under construction at our Três Lagoas Unit in Mato Grosso do Sul,” said Guilherme Cavalcanti, Fibria’s Chief Financial and Investor Relations Officer.

During the quarter, the company concluded Brazil’s largest capital transaction ever with the placement of R$1.35 billion in Certificates of Agribusiness Receivables (CRAs). The issue’s success was also due to its low cost, with a series of R$880 million placed at 97% of the overnight rate (CDI) for 4 years and another series of R$470 million place at the IPCA index + 5.9844% per annum for 7 years.

At the end of the second quarter, the capacity expansion project at the Três Lagoas Unit reached 45% completion, ahead of schedule and with cash outlays below estimates, which at the end of the second quarter corresponded to 25% of the total investment. The period highlights include a revision of the new plant’s production capacity to 1.95 million tons/year and a downward revision of the project’s total investment needs to R$7.9 billion, from the initial estimate of R$8.7 billion.

“At Fibria, we always try to do more with less. We expanded the plant’s production capacity while reducing the investment needed, once again demonstrating that we are constantly striving to uphold our management principles,” said CEO Castelli.

Given the good evolution of Horizon 2 project construction, the Company estimates that the new line startup will occurs early in the fourth quarter 2017. Another highlight in the quarter was the formalization of the entire financing structure, which involves export credit agencies (ECAs), the Brazilian Development Bank (BNDES), the Midwest Development Fund (FDCO) and other funding sources. Fibria has already begun to receive funds from Finland’s ECA Finnvera and already this year will start drawing down funds from the facilities contracted with the BNDES and FDCO. The Horizonte 2 Project will expand annual pulp production capacity at the company’s industrial unit in Três Lagoas, Mato Grosso do Sul from 1.3 million to 3.25 million tons. After its conclusion, Fibria’s total annual production capacity will exceed 7 million tons, consolidating its leadership and competitiveness in the global hardwood pulp industry.

See highlights from Fibria’s results in the second quarter of 2016 on social media using the hashtag #FIBR3_2Q16.

 

About Fibria

The world leader in eucalyptus pulp production, Fibria strives to meet the growing global demand for forestry products in a sustainable manner. With production capacity of 5.3 million tons of pulp a year, it 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 operation with Stora Enso. Fibria has 969,000 hectares of forests, with 568,000 hectares of planted forests, 338,000 hectares of environmental preservation and conservation areas and 63,000 hectares destined for other uses. The pulp produced by Fibria is exported to more than 40 countries. In May 2015, Fibria announced the expansion of its Três Lagoas unit, which will receive a new line with annual pulp production capacity of 1.75 million tons and is slated for startup in the fourth quarter of 2017.

With stock listed on the Novo Mercado listing segment of the São Paulo Stock Exchange (BM&FBovespa) and Level III ADRs listed on the New York Stock Exchange (NYSE), Fibria has 29.42% of its capital held by Votorantim Industrial S.A., 29.08% held by BNDESPAR and 41.50% represented by its free-float.

 

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Paula Barcellos                         Cindy Correa                             Fernando Antunes        

paula.barcellos@fsb.com.br       cindy.correa@fsb.com.br           fernando.antunes@fsb.com.br

11 3165-9589                              11 3165-9570                              11 3165-9747

 

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