|Suzano Papel e Celulose
|Sao Paulo, Brazil, 26 July 2007 -- /PRNewswire/ -- Suzano Papel e Celulose (Bovespa: SUZB5), one of Latin America's largest integrated producers of pulp and paper, announces its consolidated results for the second quarter of 2007.
-- Mucuri Project on schedule and within budget.
-- Pulp price: USD 20/ton increase in June.
-- Pulp inventories down to 27 days in June.
-- Market capitalization reaches USD 4.2 billion.
-- 2Q07 EBITDA R$ 279.3 million, EBITDA margin 34.0%, under stronger Real.
-- Inaugurated the third rotor of the HPP Amador Aguiar (Capim Branco).
-- Pulp cash-cost down to R$ 446/ton in 2Q07.
-- Suzano Pulp and Paper Asia - office established in China.
-- 2Q07 net profit R$ 172 million, 62.1% higher than in 1Q07.
-- New Chief of Forestry Business Unit Officer: Joao Comerio.
Pulp price higher in an environment of strong demand
International market prices of pulp increased again in the second quarter of 2007, influenced by low world inventories, higher demand and restraints on supply. Prices of eucalyptus pulp increased to USD 735/ton in North America, USD 700/ton in Europe and USD 650/ton in Asia. These prices are the highest since February 2001.
The pulp market continued with positive perspectives in this quarter. We sold a volume of 175,800 tons, 1.2% more than in the previous quarter.
In principal international markets, the price of printing and writing paper remain strong during the quarter. Prices were readjusted in EUR 30/ton in the quarter, presenting a spread of USD 210/ton (reels, CIF Europe) over the price of eucalyptus pulp, and still USD 6/ton less than the historical medium over the past 10 years.
Our market pulp cash production cost in 2Q07 (excluding the cost of standing timber) was R$ 446/ton: 3.5% lower than in 1Q07, and 0.2% lower than in 2Q06. The comparisons reflect the trend to normalize costs in our operations after the 10-day maintenance shutdown in May at the Suzano Unit.
The Mucuri project continues to be on schedule and within the initial budget. Engineers and technical teams are now making preparations for startup. The first firing of oil in the recovery boiler was run in June, for testing the start-up burners. Construction of this recovery boiler took exactly 20 months and 15 days, a record for projects on this scale, and an indication of commitment, good management, and close working co-ordination between the supplier and the engineering team.
We achieved net sales of R$ 820.9 million in 2Q07, 1.4% higher than the previous quarter, mainly reflecting increased volume of papers sold in the domestic market. Operational cash flow, measured as EBITDA, was R$ 279.3 million. EBITDA margin was 34.0%, 0.1 percentage points higher than in 1Q07, also reflecting good operational performance.
The main positive effects on EBITDA in the quarter were from
(i) paper and pulp export prices;
(ii) higher domestic sales volume of papers; and
(iii) reduction in unit COGS
Mitigated mainly by one factor: appreciation of the Real.
Our 2Q07 net profit was R$ 172 million, 62.1% higher than in 1Q07, and 66.5% higher than in 2Q06.
As well as the factors affecting adjusted EBITDA (above) the following impacted net profit:
(i) variation in the R$/USD exchange rate; and
(ii) effective tax rate on profit of 32.2% (income tax plus Social Contribution).
Source: Suzano Papel Paper
Web site: http://www.suzano.com.br/