The results reflect the success of its competitiveness plan and set the company on track to meeting its targets. Ence reduced production costs by 11%.
Energía y Celulosa recorded a net profit of €35.1 million in the first nine months of the year compared to a loss of €139.7 million in the same period of 2014, while adjusted EBITDA was 250% up on the same period of 2014, at €141 million. The improvement in large part reflects lower expenses, with production costs down 11% at €365/tonne compared with the first nine months of 2014.
Ignacio de Colmenares, CEO of Ence, said: “results for the first nine months demonstrate that the company’s enhanced competitiveness plan is bearing fruit and set us on track to meeting our ambitious goal of achieving €200 million in adjusted EBITDA in 2015.”
Also significant has been the marked increase in pulp prices as a result of a sustained surge in demand, especially in China where consumption of tissue paper has risen sharply in tandem with the improved quality of life in the country. The price ended the period at $810/tonne, with some price notifications at $830/tonne, which in combination with dollar appreciation allowed Ence to increase net sales prices by 24%.
At the same time, the Company negotiated dollar hedges for the period October 2015-April 2017 at a range of $1.07/€ to $1.15/€, which cover approximately 50% of pulp sales, giving it enhanced management of revenue trends.
During the nine months of 2015, Ence continued to improve operating cash flow generation, which came to €85.3 million driven by the higher pulp prices and increased sales of electricity, well above the €15 million recorded in the same period last year.
At the end of October, Ence completed a refinancing of bonds issued in February 2014 through a new issue of €250 million at 5.375% interest coming due in November 2022 (the 2013 bond carried interest of 7.25% over seven years). On October 7, the Company paid out the previously announced gross interim dividend of €0.044 per share charged to 2015 results.