Fibria's net profit jumps 23 times for R $743 mi, in Q3

SÃO PAULO-Fibria, world's largest producer of eucalyptus pulp in the world, registered a leap of 23 times on the net income for the third quarter compared to the previous year, amid an increase in revenue and positive financial results, the company reported on Tuesday.
Net profit rose to 743 million dollars in the third quarter of 2017, compared with positive result of 32 million reais in the same period of last year.
Cash generation, as measured by earnings before interest, taxes, depreciation and amortization (Ebitda) was adjusted to 1.256 billion reais, up 66% on the result a year earlier, mainly due to the elevation of 24% net average price of pulp in USD.
"The market fundamentals remained the pulp producers throughout the third quarter," the company said in a statement.
The combination of strong demand and reduced supply resulted in the restriction of cellulose available in market for spot negotiations, allowing the company to rearrange its prices in the period.
Net sales totaled 2.844 billion dollars in the third quarter, up 24% compared to the same period last year, due to the increase in the average price and of greater volume sold.
Pulp production in the quarter rose 11% compared to the previous year, with the entry into operation of the new pulp production line of eucaplipto Horizon branqueda 2.
"What surprised was the Ebitda well above expectations, with margin of 49% against 45% there is only three months," said analysts at Coinvalores, on Tuesday.
The company's shares opened at a high of 1,7% on B3.
The net financial result was positive in 456 million reais, compared with negative result of 203 million reais in the same period last year, due mainly to the appreciation of the real against the dollar on the debt position.
The index of financial leverage on dollar fell to 3.28 times, compared to 3.75 times the previous quarter, while in the real net debt/Ebitda fell to 3.24 times compared with 3.85 times in the second quarter, already below the limit of financial policy.
Pulp market
Fibria predicts that in the next few months, the low availability of pulp should continue being a factor of imbalance in the fundamentals of the market even with the ramp up of satisfactory New Horizon line 2 ".
The current forecast is that the unscheduled cuts reach approximately 800,000 tonnes of throughout the second half, down from the previous forecast of 500,000 tons. Already the demand is usually quite heated in the last quarter of the year, and the company sees no indications that this year will be different.