In 2Q11, Fibria’s net income reached R$215 million, 66% up the same period in 2010. The 13% dollar depreciation in the period caused the pulp price in reais to retreat 12%, which directly impacted Fibria’s net income, from R$1.6 billion in 2Q10 to R$1.4 billion in 2Q11. The decreased revenue was offset by the Company’s improved financial results, which rose from a R$310 million loss in 2Q10, when the dollar appreciated 1% to R$277 million gains at the end of 2Q11, due to the 4% dollar depreciation in the period. Net income for 1Q11 was directly benefited by the sale of CONPACEL and KSR’s assets. The net income for 2Q11 would have had increased 45% quarter-on-quarter, excluding effect of the sale-generated gains.
With a focus on operational excellence and productivity gains, the Company increased production to nearly 1.3 million pulp tons - up 9% over 2Q10. The annual maintenance downtimes of Aracruz, Veracel and Três Lagoas Units resulted in a 5% production decrease quarter-on-quarter. Sales remained stable compared to both periods, totaling more than 1.2 million tons in the period.
Net debt at the end of June totaled R$7.9 billion, stable quarter-on-quarter. Over 2Q10, when net debt was R$10.8 billion, reduction reached 27% mostly due to the sale of CONPACEL and KSR’s assets. The Dollar’s depreciation over the Real had a direct impact on the 27% decrease of pro forma EBITDA (excluding CONPACEL and KSR’s results) that totaled R$490 million, compared year-on-year.
As part of the forest base strategy in expansion projects, migrating from the land ownership model to the management of leased areas, the Company expects to reduce the capital investment expected to 2011 by R$140 million. Thus, against the scenario of appreciation of the Real, Fibria will increase its free cash flow generation without compromising the competitiveness and cost control in the forest formation. In 2Q11, R$349 million were invested in forest maintenance and expansion for Projeto Três Lagoas II. Among the investments, there is also a new bleaching line of the Fiberline A in the Aracruz Unit, which opened in June with investments at R$110 million disbursed over 16 months.
