VCP Improves EBITDA Margin in Spite of Adverse Domestic
Environment
SAO PAULO, Brazil, April 18 /PRNewswire-FirstCall/ -- Votorantim Celulose E
Papel S.A. (NYSE:VCP) (BOVESPA: VCPA4) (VCP), one of the largest pulp & paper
producers in Latin America, today announced its earnings for the first quarter
2005 (1Q05). The operational and financial information in this release, unless
otherwise indicated, is presented in consolidated numbers and in U.S. dollars
in accordance with U.S. GAAP. All comparisons provided in this Release refer to
the first quarter of 2004 (1Q04), unless otherwise indicated.
Mr. Valdir Roque, VCP's Finance and Investor Relations Director, commented,
"During the first quarter of 2005, global pulp markets continued to perform as
expected within the recovery process, with more discipline seen on the part of
producers, with Chinese and European buyers maintaining their purchases in
order to replenish inventories. This permitted VCP to announce additional
increases in international eucalyptus pulp prices in January, March and April. The local economic situation continued to show signs of sustainable growth even
during this challenging period, with increasing interest rates, declining
exchange rates, inflationary pressures, increasing taxes and fiercer
competition in the local paper market. The current macroeconomic situation
leads us to expect an upward trend for the domestic paper market, although at
more moderate rates than those presented in 2004, and more concentrated during
the second half of the year.
"In spite of the challenging domestic environment when compared to the previous
quarter, VCP improved the EBITDA margin from 37% to 38%, resulting from the
efforts made to increase efficiency on production and control costs, despite
the seasonal effect of lower sales volumes during the first quarter of each
year. This performance resulted in net income of US$ 61 million for the
quarter.
"Under this scenario, VCP reported net revenue of US$ 251 million for the
quarter, up 2% when compared to 1Q04. This growth would be even higher had it
not been negatively impacted by the increased PIS/COFINS tax rate on domestic
sales, as well as lower export volumes. EBITDA in 1Q05 of US$ 96 million was 9%
lower than in 1Q04, pressured by the drop in export volumes -- 11% lower -- the
negative impact of a lower exchange rate in costs denominated in Reais, as well
as higher prices of inputs, particularly of chemical inputs, which were
impacted by increased oil prices.
"On March 31, we concluded the acquisition, jointly with Suzano Papel e
Celulose S.A., of the capital stock of Ripasa S/A Celulose e Papel, held by the
controlling shareholders, which will promote further growth and operational
synergies for VCP." Major Financial Indicators
(in US$ million) 1Q05 1Q04 1Q05/1Q04
Net Sales Revenue 251 247 2%
Domestic Sales 119 112 6%
Exports 132 135 (2%)
Operating Profit 71 84 (15%)
Net Income 61 80 (24%)
Earnings per ADR 0.32 0.42 (24%)
EBITDA 96 106 (9%) CONFERENCE CALL
VCP will hold a Conference Call on Tuesday, April 19, 2005, at 10:00 a.m. (EDT)
/ 11:00 a.m. (Sao Paulo). Connection Numbers: USA (1-800) 860-2442; Brazil
(0xx11) 4613-0502; other countries (1-412) 858-4600. Please call approximately
10 minutes prior to the start of the teleconference. Access code: 327 Natasha Nakagawa
Tel: (5511) 3269-4168/4261/4287 | Fax: (5511) 3269-4066
http://www.vcp.com.br/ DATASOURCE: Votorantim Celulose e Papel S/A CONTACT: Natasha Nakagawa, Votorantim Celulose, +011-5511-3269-4168 or +011-5511-3269-4261 or +011-5511-3269-4287, or fax +011-5511-3269-4066, or Web site: http://www.vcp.com.br/
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