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Portucel Delivers More But Posts Lower Results

Grensbach, Germany 28 July 2014 -- Portucel has lowered its results in the first half of the year. While the company increased its deliveries, sales prices during the period declined.

Portuguese pulp and paper manufacturer Portucel has closed the first half of the year 2014 with lower results despite an increase in deliveries. The company's operating profit and net result were down by 10% and 7.3% year-o-year to 112.3 Mio € and 90.6 Mio €. Sales in the first six months of the year amounted to 747.2 Mio € which is 1.2% less than in the same period last year.

Portucel explained that sales prices in all of its segments, i.e. prices for pulp, uncoated woodfree (UWF) paper and power, declined compared to the first half-year 2013. The increase in deliveries in most segments could not offset the drop in prices.

On the cost side, Portucel benefited from lower personnel costs and decreased costs for chemicals and logistics. However, these gains had been practically wiped out by rising timber costs, said the company. Timber prices rose as a result of the extremely rainy weather in the first half, according to Portucel.

In the first six months of the year, Portucel delivered 742.000 t of UWF paper, 0.7% more than in the corresponding period last year. On the other hand, the price for the product fell by 1.6%. Sales revenues were down by 1% during the period as a result. However, there had been a price increase in April and the product mix had improved which had positively impacted results, said Portucel.

According to Portucel, the first half of the year proved to be difficult for the pulp sector as well, with new production capacity coming online in a market where supply already exceeds demand. The company was able to maintain its deliveries which were stable at 135.000 t in the first six months of 2014. The pulp price was down 9.1% year-on-year which was less than expected, said Portucel.

Portucel's energy deliveries rose by 1.3% and amounted to 1.068 GWh in the first half-year. Sales prices declined by 3% year-on-year.


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