CHILE - Sales of Arauco, the world’s second largest wood panels manufacturer, reached USD 1,559.3 million during the second quarter of 2018, growth of 21.8% as compared to USD 1,279.9 million in the same quarter of 2017.
Sales growth was mainly due to the increase in sales of the pulp segment.
Adjusted EBITDA increased by 62.5% compared to same quarter 2017, reaching USD 546.3 million, also due to higher sales volume and higher prices in the pulp division. Adjusted EBITDA margin was 35.0%, an increase of 8.7 p.p. compared to the 26.3% obtained during 2Q-2017.
Net profit for the second quarter of 2018 was USD 238.2 million; an increase of 183.2% compared to USD 84.1 million obtained 2Q-2017. Net profit growth is mainly explained by an increase in revenues and higher profits in Associates and Joint Ventures, compensated by an increase in income tax, cost of sales and losses due to exchange rate differences.
Sales during 2Q-2018 of the wood products segment (includes wood panels and sawed wood) increased 6.3% against the 2Q-2018. In general, all markets showed good demand, with construction and economy improving in some countries, but with China being affected by the commercial dispute with the US.
Wood panel sales remain solid, with overall sales volume increasing by 2.1% and average prices decreasing 2.1% during the second quarter, compared to the previous quarter. Both MDF and particleboard/MDP, had higher sales volume in the major markets, North America, and also increasing sales volume in South America.
Sales in United States and Canada have been stable with a slightly upward trend towards the end of the second quarter, reflecting improvements in price levels and sales volume. In Mexico, local consumption continues rising, which confirms the positive level of activity that is experienced in the furniture and construction sector.
In Brazil, the second quarter of the year continued to show growth in the consumption of boards. This was only affected by the truck stoppage towards the end of the period. The Company expects that elections in October and new plants adding capacity into the market will generate some uncertainty during the second half of the year.
In Argentina, the strong devaluation of the Argentine peso has generated complications and uncertainty, but the consumption of the local market has remained steady. In Chile, demand remains strong due to the recovery of the economy, despite the period of low seasonality. The rest of Latin America kept a good level of demand.
The Grayling, Michigan particleboard plant continues its course. As of August 2018, the progress was 80%. This particleboard mill considers an investment of approximately USD 400.0 million and will have a capacity of 800,000 m3 per year. The rollout of the first panel is estimated to occur during the latter part of 2018.
