Press Release Financial Results First Quarter 2020
PROTECTION OF OUR COLLABORATORS AND OPERATIONAL CONTINUITY MARK FIRST QUARTER FOR EMPRESAS CMPC
+++ The company created a Crisis Committee that regularly meets to monitor the impact of the health crisis on its operations and in the community.
+++ Consolidated sales reached US$ 1,348 million, decreasing 2% compared to the immediately preceding quarter and 7% compared to the same period in 2019.
A first quarter marked by the impact of the COVID-19 Pandemic declared by the World Health Organization (WHO) registered CMPC companies. As noted by its main executives, the efforts were mainly focused on the care of its direct and indirect collaborators and the continuity of their operations.
As a result, the company maintains its operations on a regular basis, supplying the main markets with especially relevant products in the current context, in addition to developing a series of initiatives in support of its neighboring communities. “The company took on the double challenge of caring for its employees and responding to demand for its products, applying rigorous health protocols that are reviewed daily to incorporate the recommendations of the different authorities and best practices in the corporate world,” said Francisco Ruiz-Tagle, CEO of Empresas CMPC.
During this period, a Crisis Committee was set up at CMPC to regularly monitor the situation facing the company. The committee is led by the CEO of Empresas CMPC and composed by the main corporate executives and executives of the business areas.
In addition, it implemented the home office system for more than 4 thousand collaborators; the adequacy of operational shifts to minimize contact inside the plants; and the cancellation of all meetings and business trips, which have been replaced by video conferences.
Concern for the community remained part of the actions implemented by the company in the different countries where it operates, which is why it has promoted a number of initiatives such as the acquisition – by its subsidiary SOFTYS – of six mask machines that are being installed and starting to produce them in Chile, Peru, Mexico, Argentina and Brazil , which will be used by the Company’s employees and will initially be distributed free of charge to the public health services or neighboring communities in each country.
On a regular basis, when all machines are operational, SOFTYS will achieve the manufacture of 19 million 500 thousand units of masks per month.
Also, and continuing with the firm purpose of assisting the community in this crisis situation, CMPC decided to implement a field hospital for patient care in its Los Angeles former offices; develop permanent programs to sanitize streets and public spaces in communes such as Guaiba in Brazil; Nacimiento, Laja and Puente Alto in Chile; support with hygiene and protection elements to children and elder people nurseries; and help decongest health services with the Mobile Clinics in some Chilean regions.
In this special period of health and economic crisis that the world lives, CMPC’s vocation as a global and always long-term company has allowed it to face these difficulties with financial soundness.
During this year, the company hopes to continue maintaining a conservative capital structure, with great caution in its financial management and a strong liquidity position.
In fact, the company decided to strengthen its liquidity position, among other initiatives, by disbursing a compromised line of US$400 million, half of that amount expires in September and the other half could be renewed until 2022.
The results of the first quarter of Empresas CMPC were marked by the low cellulose prices and the favorable operational result of its subsidiary of hygiene and personal care products, Softys.
During these first three months, consolidated sales reached US$ 1,348 million, decreasing 2% compared to the immediately preceding quarter and 7% compared to the same period in 2019. This is mainly due to lower market pulp prices, which leads to a fall in pulp revenues.
Softys sales decreased 2% quarter-to-quarter, as a result of depreciation of local currencies, but increased 10% compared to the same period last year, totaling US$ 545 million.
The company’s consolidated EBITDA reached US$ 222 million, stable compared to last quarter and 34% lower than the first quarter of 2019, mainly due to lower cellulose prices.
In the reported quarter, CMPC recorded a net loss of US$ 132 million, compared to a fall in its profits of US$ 18 million in the fourth quarter and a profit of US$ 57 million observed between January and March 2019.
This decrease is mainly due to the increased provision of deferred taxes that the company had to make in the period as a result of the devaluation of the Brazilian real, which has no effect on the company’s cash flow.
The company will remain very attentive to the evolution and impact of this pandemic in the different markets where it operates, in order to generate the measures that allow to deal with this situation quickly and responsibly.