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Updated on 26.04.2017

MídiaReleases

April 26, 2017 - Fibria reports first-quarter net income of R$329 million and EBITDA margin of 37%

* Net income was R$329 million, compared to the net loss of R$92 million in the fourth quarter of 2016;

* EBITDA margin stood at 37%, compared to 36% in the previous quarter;

* Sales volume came to 1.307 million tons, up 15% on the year-ago quarter;

* Free Cash Flow was R$426 million, 25% higher sequentially. The cash position stood at R$6.720 billion, plus R$1.737 billion in stand-by facilities, representing liquidity of R$8.457 billion. Coupled with the untapped financing facilities related to the H2 project, the Company has zero refinancing risk through 2019;

* The Horizonte 2 Project continued to advance in line with the physical and financial timetable, reaching physical completion of 87% and financial realization of 61% in the quarter, enabling the Company to announce the anticipation of the new mill’s startup from October to September this year.

 

São Paulo, April 26, 2017 – Fibria, a Brazilian forestry company and the world’s leading eucalyptus pulp producer, reported net income of R$329 million in the first quarter of 2017, compared to the net loss of R$92 million in 4Q16 and the net income of R$978 million in 1Q16. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) amounted to R$644 million, with EBITDA margin of 37%, compared to 36% in 4Q16. In the same comparison, Adjusted EBITDA declined 20%, which is explained by the seasonality of sales volume and the depreciation in the average rate of the U.S. dollar against the Brazilian real.

“We’re seeing a better environment in the pulp market early this year. Asian demand for hardwood pulp grew 21% in the first two months of the year, according to PPPC data for March. These positive fundamentals created a favorable environment for the price increases we announced early this year,” said Fibria CEO Marcelo Castelli.

Fibria announced new increases for January of R$20/ton for Europe, North America and Asia. For February, it announced price increases of US$30/ton for all regions (Europe, Asia and North America), followed by a new increase of US$20/ton effective in March. Further increases, effective this month, were announced of US$40/ton for Europe and

North America and US$20 for Asia. Lastly, new increases, effective May 1, were announced of US$40/ton for Europe and North America and US$20/ton for Asia.

Chinese demand for hardwood pulp continued to register consistent growth. The growth in Chinese demand between the last quarter of 2016 and the start of this year is unusual, since China’s first quarter has fewer business days because of the Chinese New Year and the shorter February this year compared to last year. In 1Q17, Fibria’s sales volume, including the volumes from the contract with Klabin, was 15% higher than in 1Q16.

Fibria’s net revenue in the first quarter was R$2.074 billion, down 18% from the fourth quarter of 2016, reflecting the 18% drop in sales volume due to seasonality and the need to rebuild minimum inventories. Compared to the first quarter of 2016, the 13% drop is explained by the 19% depreciation in the average exchange rate and lower average sales price in U.S. dollar, which was offset by the 15% growth in sales volume.

Fibria’s free cash flow before investment in the Horizonte 2 Project (to build a second production line at the Três Lagoas Unit in Mato Grosso do Sul), the pulp logistics projects and the payment of dividends amounted to R$426 million, compared to R$342 million in the fourth quarter of 2016 and to R$730 million in the same quarter last year.

Fibria ended the quarter with a cash position of R$6.963 billion, up significantly from R$4.717 billion at the end of the fourth quarter of 2016. The company also has four revolving credit facilities in the total amount of R$1.737 billion. “These funds, although untapped, help improve the company’s liquidity conditions. This means that the current cash position plus these facilities amount to readily available funds of R$8.457 billion, which, coupled with the financing facilities already secured and untapped for the Horizonte 2 Project, represent sufficient financial conditions to cover the entire investment remaining in the Horizonte 2 Project as well as our debt amortizations through 2019, resulting in zero refinancing risk in the period, even without considering free cash flow in the period. This robust financial position will allow Fibria to access the market whenever it wants if interesting funding windows emerge,” said Guilherme Cavalcanti, Chief Financial and Investor Relations Officer.

Horizonte 2 Project

At the end of 1Q17, progress on the Horizonte 2 Project was ahead of schedule, with physical completion of 87% and financial realization of 61%. The excellent progress being made on the project enabled Fibria to announce recently the anticipation of the new mill’s startup from the fourth quarter to the third quarter of the year, in September. Total investment in the project remained unchanged at R$7.5 billion.

In the forestry area, the highlights were the start of wood harvest operations to supply the new mill, the progress being made on planting for forest formation and the completion of the new nursery at the Três Lagoas Unit, which will produce eucalyptus saplings to form the forestry base for the Horizonte 2 Project. The new nursery represents an innovation by Fibria in the pulp and paper industry given that it is 100% automated, with the adoption of a Dutch technology used for flower production.

In pulp logistics, the highlights were the progress on construction of the Port Terminal in Santos, the start of foundation laying at the Intermodal Terminal in Aparecida do Taboado, Mato Grosso do Sul and the hiring of services to provide logistics for distributing pulp from the new mill.

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 annual production capacity of 5.3 million tons of pulp, 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 1,056,000 hectares of forests, with 633,000 hectares of planted forests, 364,000 hectares of environmental preservation and conservation areas and 59,000 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 1.95 million tons and is slated for startup in the third quarter of 2017.

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