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The Navigator Company recorded a net profit of 75.2 million euros in the first nine months of this year, down 49% from the 147.5 million presented in the same period of 2019.
In the statement presenting the results, the pulp and paper manufacturer points out that the turnover up to September decreased by 18.1% to 1,044 million euros, with paper sales representing about 68% of the turnover, pulp 11%, 10% fabric and 10% energy.
However, from the second to the third quarter, the group recorded a recovery in activity, with a 20% growth in turnover to 348 million euros, and from 36% of EBITDA to 70 million. Furthermore, the net result between July and September reached 31 million euros, an increase of 133% compared to the previous quarter (when it was 13.4 million). This figure far exceeds the estimates of CaixaBank BPI, which indicated a profit of 21 million euros in the third quarter.
“With the reopening of savings and the gradual recovery in demand for paper, Navigator recorded a significant improvement in its business during the third quarter. The rapid adaptation to market changes and the consequent commercial effort, the good operational performance of the business of pulp and tissue, in addition to a rigorous performance in terms of costs, allowed to record a strong generation of free cash flow and to significantly increase results compared to the previous quarter “, underlines the company now led by António Redondo.
In the first nine months of the year as a whole, the group recognizes that the UWF paper business was directly affected by the confinement and led to a sales volume of 934,000 tons, 14% less than in the same period last year. However, “pulp and tissue sales partially offset, with the former up 39% to 297,000 tons and tissue sales by 7% to 79,000 tons.”
EBITDA decreased by 29.9%, on an annual basis, to 210.5 million euros, underlining to Navigator that “the significant reduction in variable production costs and the strong containment of fixed costs – of 30 million – allowed to mitigate the drop in sales prices and to obtain an EBITDA / sales margin of more than 20% “.
As of September, financial costs were 9.1 million, an improvement of 2.3 million year-on-year.
Free cash flow generation reached 170.4 million, with investments of 69.7 million, 49.2% less than in the same period of 2019. Net financial debt decreased by 132 million to 644 million euro, keeping the net financial debt / EBITDA ratio at 2.28 X. The group also reports that it has strengthened its cash and cash equivalents to 345 million euro.
The search for the card resumes
In the paper sector, Navigator points out that after the “adverse” months of April and May “there has been a gradual recovery in demand starting from June, a trend that, with the reopening of the economies, was confirmed by for the whole third quarter “. The company, which came to stop the machines and resort to layoffs, began increasing paper production starting in July, with all its machines in operation ever since.
In your opinion, Navigator’s capacity utilization rate was around 90% at the end of September, its stock levels remained in line with the previous year (in 17 days) and its order book was up to a 26 day level.
In the case of pasta, a market that turned out to be “quite resilient to the adverse context of the reduction in activity resulting from the pandemic”, Navigator emphasizes that it was able to record a volume of sales to the market significantly higher than the previous year (about 39% in addition in tons).
However, he adds that the sharp increase in quantities sold “was not enough to mitigate the impact of the reduction in the average selling price of pasta over the period”, with the value of these sales falling 3% to 118 million.
The tissue business, on the other hand, “evolved favorably in the first nine months, with volume sales reaching 79 thousand tons, representing a 7% increase compared to the same period of 2019”, with an increase in tissue turnover of about 5%, to 106.7 million.
Electricity sales in these nine months amounted to 106.8 million, with a reduction of 12.9% compared to the same period of the previous year.
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