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Media | News
02.26.10 - Fibria closes 2009 with net revenue of R$ 6 billion and record sales of 5.2 million tons of pulp
São Paulo – Fibria, the company formed by the merger of VCP - Votorantim Celulose e Papel S.A. and Aracruz Celulose S.A., ended the year 2009 with record sales of 5.25 million tons of pulp, 27% higher than the previous year’s volume. The increase was largely due to the increased in supplies coming from the new mill at Três Lagoas (MS). The company obtained a net income of R$ 558 million for the year, a complete turnaround from the negative R$ 1.3 billion result registered for the previous year. For the purpose of comparison between 2008 and 2009, Fibria’s consolidated results for 2008 are shown on a pro-forma basis, the same as the company’s consolidated statements for 2009.
Production and Sales – The 2009 financial year was marked by economic recovery and renewed liquidity in the world financial markets, which sparked a gradual upturn in demand in the market pulp sector. A total of 5.19 million tons of pulp and 369,000 tons of paper was produced during the year. The highlight was the start of industrial operations at the Três Lagoas unit (MS) in March, about one month ahead of schedule. With an annual production capacity of 1.3 million tons of pulp, the mill is the biggest in the world to have a single production line. At the Piracicaba unit (SP), production was begun of TermoBank paper, used in the banking sector, which retains the print quality for longer than the similar papers available in today’s market.
Fibria’s pulp sales volume reached 5.25 million tons, 27% higher than that of the previous year, mainly as a result of the increased quantities being produced by the new mill at Três Lagoas (MS). Exports accounted for 90% of the total pulp sales, with the Asian market taking the greatest volume — 1.9 million tons, equivalent to 36% of the total.
Fibria’s net operating revenue in 2009 amounted to R$ 6 billion, 1% more than in 2008, largely due to the 27% increase in the pulp sales volume, brought about by the additional production from the Três Lagoas unit, since the average net price for the period, denominated in reais, diminished by 20%.
The cost of goods sold (COGS) came to a total of R$ 5 billion, an increase of 16% over the figure for 2008, mainly due to the higher pulp sales volume (+R$ 460 million) and increased logistical costs (+R$ 98 million) resulting from the new level of production from the Três Lagoas unit. However, the COGS per ton was down by 6%, because of the lower cash cost of production and benefits deriving from gains in operational efficiency and the cost reduction plan introduced in the third quarter of 2008.
Operating expenses were down by 14% in comparison with the 2008 figure. This was mainly because of a 74% drop in other operating expenses, resulting, principally, from a lower figure for the amortization of premiums. This fall more than offset the increases in sales and administrative expenses, which rose by 25% and 14%, respectively, due in large part to the Três Lagoas unit coming into operation and expenses incurred in relation to the corporate restructuring.
Consequently, the adjusted EBITDA came to R$ 1.7 billion, with a margin of 28%. The EBITDA for the period was down by 23% from the R$ 2,20 billion recorded in 2008 (margin of 37%), because of the lower average pulp price (-20%) in 2009.
Debt management – Fibria made significant progress in the fourth quarter of 2009 in its strategy for managing its financial liabilities, bringing the maturities on its loans into line with the company’s cash generation and improving its capital structure. The company will continue to manage its debt in such a way that it will be able to recover its investment grade rating and follow through on its strategy for growth when market conditions are favorable.
The sale of the Guaíba unit was the first step in the implementation of this plan. The agreed sale price, of US$ 1.4 billion, was adjusted by around US$ 48 million in regard to US$ 20 million in leased assets (no cash impact) and US$ 28 million of amounts retained in relation to the adjustment of the physical forest inventory, which is still to be confirmed. So, the sum of R$ 2.42 billion recorded for the sale generated a capital gain of R$ 33.4 million, which was registered under “other operating income (expenses)”.
In line with this strategy, in October 2009, the company raised US$ 1 billion abroad through a 10-year bond issue, at an interest rate of 9.25% p.a., payable on a half-yearly basis. In December 2009, a further sum, of just under US$ 1.18 billion, was raised through two export prepayment facilities: US$ 750 million over 5 years, with a 3-year grace period, and US$ 425 million over 7 years, with a 5-year grace period, both indexed to the 3-month Libor, plus 4.00% p.a. and 4.25% p.a., respectively.
The total amount raised under the plan, of US$ 3.6 billion, has been used to settle in advance US$ 2.1 billion of debt in relation to derivatives and cover the debt maturities coming due in 2010 and 2011. At the same time, the company completed the negotiations to bring the terms governing the remaining debt arising from derivative transactions into line with the company’s other contracts. As a result, a whole series of restrictive conditions, previously contained in the derivative debt contract, were eliminated.
Capital Market – On November 18, 2009, Fibria’s shares began to be traded at the São Paulo Stock Exchange (Bovespa), under the ticker code FIBR3, and were also listed at the New York Stock Exchange (NYSE: FBR), which brings enhanced liquidity and extends the company’s investor base. This improved share liquidity took Fibria to tenth place in the in the Bovespa index (Ibovespa). The combined average daily trading volume at the Bovespa and NYSE in the fourth quarter, for example, amounted to US$ 42 million. During the course of the year, Fibria met all the requirements for listing in the “Novo Mercado (New Market)”, the Bovespa listing that meets the highest standards of corporate governance, including the adapting of its by-laws and the election of two independent members to the company’s board of directors.
Public Recognition – Fibria was selected for two important corporate sustainability indexes: the NYSE’s Dow Jones Global Sustainability Index 2009/2010 (DJSI World), and the Bovespa Corporate Sustainability Index (ISE 2009/2010), which highlight the companies that have the best practices in this area. This recognition strengthens the company’s commitment to making the creation of economic value go hand in hand with responsibility in the socio-environmental sphere.
See the full fourth quarter 2009 results release at: www.fibria.com.br/ir.
