BRAZIL – Duratex, one of the largest global wood board manufacturers, reported sales of BRR 3,963.1 million in 2015 compared to BRR 3,984.1 million in 2014 (-0.5%).

Although sales were only slightly down, EBITDA in 2015 was down 25.8% reaching BRR 911.3 million (2014: BRR 1,227.6 million) and profit for the year decreased 38.3% totalling BRR 221.8 million (2014: BRR 359.6 million).

Sales of the wood division in 2015 reached BRR 2,597.8 million a drop of 1.7% compared to BRR 2,641.9 million in 2014. Volume shipped by the wood division was down 10.4% in 2015 and laminated board shipments were down 4.4%.

Brazil has been facing economic stagnation since 2014 with the continuing deterioration in 2015 of macro and political conditions. The year of 2015 saw rises in inflation, in the unemployment rate, in interest rates, and in credit restrictions, which together directly impacted the consumer confidence index and led to a fall in consumption, a reduction in industrial activity and growth in the rate of bad debt.

Duratex has also witnessed a worsening in the markets in which it operates reflecting in sales volumes. In addition there has been pressure on costs stemming from both the increase in some consumables (electricity) and from the devaluation of the Real leading the Company to take austerity measures in revising its processes and making adjustments to capacity, to not only to overcome the current period but also build the foundations for a recovery in demand. In 2015 the panel segment in Brazil showed an annual drop of 11.3%, with a drop of 8.9% in the volume of MDF and a 14.9% drop in MDP, according to data released by the Brazilian Lumber Industry (IBA). The ABRAMAT indicator, which measures the performance of the sales of construction materials in the domestic Market, shrank by 12.6% in 2015 versus 2014.

Continuing with internal actions to prepare the Company for the economic scenario and adapt its capacity, in December Duratex announced a temporary reduction in some of the activities of the Itapetininga unit. The coating and high gloss lines remain active and this unit will continue to hold strategic importance to the company, with other production coming back online as soon as the market and the economy recover.

In 2015 the projects to improve internal efficiency and reduce costs reached savings of BRR 45 million. Other internal efficiency projects will continue to be of strategic priority to the Company in 2016 and should continue to realize the economic and efficiency gains.

Another priority of the Company is the expansion of exports, highlighting the performance of the Wood division, that had a significant increase in the volumes of 2015 and should keep this growth rhythm in 2016. 

Duratex Results January-December

Million BRR