Fibria ends 2016 with higher sales, strong net income growth and robust cash position
(Sao Paulo, Brazil, January 31, 2017) Fibria, a Brazilian forestry company and the world’s leading eucalyptus pulp producer, reported sales volume of 5.504 million tons in 2016, or 8% more than in 2015. In 4Q16, sales volume came to 1.584 million tons, increasing 21% from 4Q15.
Result Highlights:
• Pulp sales in 4Q16 came to 1.584 million tons, up 21% from 4Q15. Sales volume in 2016 amounted to 5.504 million tons;
• Net income for 2016 was R$1.664 billion, an increase of 365%. The proposed dividend distribution is R$393 million;
• Fibria’s cash position of R$4.717 billion (equivalent to US$1.447 billion), combined with untapped financing facilities related to the Horizonte 2 Project to expand the Três Lagoas Unit and to the recent US$700 million bond issue, is sufficient to cover the investments needed to complete the project and to repay all debt coming due through end-2019;
• At end-2016, the Horizonte 2 Project reached 77% physical completion and 57% financial realization.
The growth in world demand for eucalyptus pulp of approximately 1.3 million tons, according to PPPC data, combined with low inventory levels and the more-balanced short-term outlook than originally expected with regard to new capacities coming online, allowed the Company to announce, in 4Q16, successive price increases for China and other markets.
“This is Fibria’s highest quarterly sales volume ever, which was driven by the recovery in demand from Asia during the quarter. The price increases in Asia in October and December were successfully implemented and paved the way for new price increases that were announced already in early 2017 for all markets, including North America and Europe,” said Fibria CEO Marcelo Castelli.
Fibria’s net revenue amounted to R$2.534 billion in 4Q16, down 15% from 4Q15, reflecting the 18% drop in the average net pulp price in U.S. dollar and the 14% average depreciation in the U.S. dollar against the Brazilian real, which was partially offset by the stronger sales volume. In 2016, net revenue came to US$9.615 billion, down 5% from 2015. In 4Q16, adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was R$804 million, with margin of 36%. In 2016, EBITDA amounted to R$3.742 billion, with margin of 43%.
Net income in 2016 was R$1.664 billion, growing 365% from 2015. In view of this result, Fibria’s Management will propose to the Annual Shareholders’ Meeting to be held in April a dividend distribution of R$393 million, which corresponds to the minimum dividend mandated by Brazilian Corporation Law.
Fibria ended the quarter with a cash position of R$4.717 billion (or US$1.447 billion), which, combined with the untapped financing lines related to the Horizonte 2 Project and to the recent US$700 million Green Bond issue, is sufficient to cover the investments needed to complete the expansion project at the Três Lagoas Unit and to repay all debt coming due through end-2019, and this is without even considering the cash flow to be generated.
Capital expenditure (capex) in the quarter came to R$1.748 billion, 62% more than in 4Q15, mainly due to the higher investments in the Horizonte 2 Project, in accordance with the project’s completion curve. In 2016, capex amounted to R$6.182 billion, or 25% lower than the initial estimate of R$8.189 billion, which is explained by the reduction in the costs of the Horizonte 2 Project influenced by the project’s financial realization curve and by the lower investments in pulp logistics projects. Compared to 2015, the 162% increase is mainly due to the expansion in industrial capacity in the state of Mato Grosso do Sul.
Horizonte 2 Project
At the end of 2016, progress on construction of the second pulp production line at the Três Lagoas Unit exceeded expectations, reaching 77% completion. The project’s financial progress, however, reached 57%, with US$1 billion still to be realized.
“In 4Q16, we drew down R$1.2 billion from the project’s financing facilities which, due to its low-cost and long-term nature, helped improve Fibria’s debt profile. In December, we also concluded the fourth issue of Certificates of Agribusiness Receivables (CRAs), in the amount of R$1.25 billion. This financing facility offers a financial cost that is below the average rate of our financial investments, which means it is a debt instrument that in fact generates financial income. In 2016, Fibria was the largest issuer of CRAs in Brazil,” said Guilherme Cavalcanti, Chief Financial and Investor Relations Officer at Fibria.
In the forestry area, there were important improvements in 2016, such as the progress made on plantations and leases to form forestry assets, the implementation of forestry tractors, the delivery of harvesting machines and the hiring of labor to operate the forestry machines. The industrial area registered continued improvement in the commissioning, services and startup of control systems, with the integration of two production units (the new one under construction and the current one already in operation). In logistics, the highlight was the start of construction on the Macuco Port Terminal in Santos, São Paulo and the acquisition and start of construction on the Intermodal Terminal in Aparecida do Taboado, Mato Grosso do Sul.
Learn more at www.fibria.com.br (Source: press release)
