Fibria, a Brazilian forestry company and the world’s leading eucalyptus pulp producer, closed the third quarter of 2015 with the best operational performance in its history, breaking records for EBITDA, EBITDA margin and free cash flow. This was the result of strict financial discipline and operating excellence, combined with strong global demand for pulp and the appreciation of the U.S. dollar.
In the quarter, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) reached R$1.55 billion, up 683% over the same period in 2014 and 127% over last quarter. EBITDA margin was the highest in Fibria’s history at 56%, a gain of six percentage points over the last quarter and 21 percentage points over the same period in 2014. Bolstered by the appreciation of the U.S. dollar against the Brazilian real, free cash flow generation excluding capex on the Horizonte 2 Project came to R$1.12 billion in the quarter, more than double than in the second quarter of 2015 and accounting for nearly 50% of free cash flow in the last 12 months – which came to R$2.297 billion before distribution of dividends in May and capex on the Horizonte 2 Project.
“We did our homework well and are now reaping the rewards. Our strong cash generation enables us to execute the Horizonte 2 Project, which involves expansion of the Três Lagoas (MS) unit, without compromising Fibria’s credit quality. At US$2.5 billion in investments and currently under construction, the project is one of the largest private investments underway in Brazil and is a milestone for competitiveness in the sector,” said Fibria CEO, Marcelo Castelli.
In the third quarter of 2015, Fibria’s net revenue was R$2.79 billion, up 60% from the same period in 2014 and 21% from the previous quarter. Eucalyptus pulp sales in the third quarter were driven by strong global demand, particularly in mature markets such as Europe and China, due to newly installed paper plants. As such, the typical seasonal downturn in pulp demand in the third quarter – weaker months due to shutdowns by paper producers during summer vacation in the Northern Hemisphere – was practically nullified and Fibria sold 1.298 million tons, outpacing the previous quarter and reducing inventories to 53 days.
