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Media | News
11.11.10 - Fibria’s income increased 133% in the third quarter to R$303 million
In 9M10, EBITDA totaled R$2.1 billion, up 75% over 9M09’s R$1.2 billion
The Liability Management Plan brought net debt/EBITDA down from 7.2x to 3.9x in just one year
São Paulo – Fibria closed the third quarter of 2010 with net income of R$303 million, up 133% quarter-on-quarter chiefly due to the impact of the real’s 6% appreciation against the dollar on its dollar-denominated debt. EBITDA in the quarter came to R$717 million, bringing the total for the first nine months of the year to R$2.1 billion, increasing 75% over the same period of 2009. EBITDA margin in 3Q10 was 40%, stable quarter-on-quarter and up 10 p.p. year-on-year.
In the quarter, Fibria continued its steady improvement of debt indicators. Gross debt in 3Q10 was R$12.3 billion, down 7% quarter-on-quarter and 20% year-on-year. With net debt down to R$10.1 billion and LTM EBITDA at R$2.6 billion, net debt/EBITDA fell to 3.9x, the lowest level in the past twelve months. A year ago, this indicator stood at 7.2x.Moreover, the debt average maturity was extended to 75 months, well above the 52 months in 3Q09. Fibria’s CEO, Carlos Aguiar, stated, “We are pleased with our third quarter results, as we maintained our margin at 40% while reducing our debt and improving its profile. In the past year, we have restructured and integrated the operations of what is now the world's largest hardwood pulp producer. Restructuring our debt has enabled us to resume our expansion plan with a second fiberline at Três Lagoas.”
Production and sales – Fibria’s pulp production reached 1.3 million tons, a 10% quarter-on-quarter increase due to the reduced number of units on scheduled maintenance downtimes in the period; in the third quarter Jacareí and Conpacel were in maintenance, compared to Aracruz, Veracel and Três Lagoas in the second quarter.Year-on-year, the 7% decline is explained by the absence of the volumes from the Guaíba Unit, which was sold in December of 2009. Pulp inventories totaled 650 thousand tons (42 days), up 29% from the 504 thousand tons (33 days) in 2Q10.“In Fibria’s first year, we have brought the Três Lagoas Unit up to full capacity in record time and we are already preparing a second fiberline, which will consolidate that site as one of the world’s most productive,” commented Aguiar.
Fibria sold a total 1.2 million tons of pulp in 3Q10, 5% less than the 2Q10 volume, chiefly due to reduced Asian demand. The 6% year-on-year decline is explained by the reduced supply as a result of the sale of the Guaíba Unit.
Revenue and EBITDA – Fibria’s operating revenue totaled R$1.8 billion in the quarter, falling 1% quarter-on-quarter mainly because of the 5% decline in pulp sales.Year-on-year, net income increased 28% chiefly due to the 46% higher average pulp price in reais.
Debt – Fibria continued its initiatives to align its debt profile with its current situation, contracting new debt with longer maturities at lower costs and liquidating less competitive debt throughout the quarter. Thus, the cost of dollar-denominated debt was reduced from 6.0% p.a. in 2Q10 to 5.6% p.a. in 3Q10. The average maturity was extended to 75 months, compared to 52 months in 3Q09. In addition, Fibria paid down R$449 million of the debt with former Aracruz shareholders. These measures allowed Fibria to reduce gross debt by R$900 million quarter-on-quarter and R$3.3 billion year-on-year. The cash balance was R$2.2 billion, representing 90% of short term debt. The combination of reduced debt and increased cash generation drove the continued decrease of net debt/EBITDA to 3.9x, compared to 7.2x in September of 2009. According to Fibria’s CFO João Elek, "The extended debt profile is better aligned with our production cycle."
Growth – Fibria remains committed to installing a new unit at Três Lagoas with a production capacity of 1.5 million tons, anticipating its startup to 2014. To this end, Fibria began working to develop the forestry base to make the project feasible.
Fibria’s one-year anniversary – After a year of existence, Fibria can already claim several achievements. In terms of operations, the Três Lagoas Unit successfully met its learning curve in record time. The positive world pulp market, together with Fibria's operating efficiency, allowed it to recuperate its 40% EBITDA margin. At net present value, synergies obtained through the end of the third quarter total approximately R$2.4 billion. Financially, the company achieved a genuine financial turnaround with the early liquidation of its derivatives debt, accessing the capital markets to extend debt maturities while reducing costs. Fibria’s Investor Relations program was recognized in a study by Institutional Investor magazine. Carlos Aguiar placed second in "Best CEO" in the Latin American pulp and paper industry, while Fibria’s IR team took first place in “Best Investor Relations Team” among buy-side and sell-side analysts.
Sustainability – In September, Fibria was included in the 2010/2011 portfolio of the Dow Jones Sustainability Index (DJSI World). Additionally, in October, its sustainability report was named one of the top 30 in Brazil according to a study by SustainAbility and the Brazilian Foundation for Sustainable Development (FDBS).
To see the full 3Q10 earnings release, visit www.fibria.com.br/ir
