CHILE - Arauco, one of the largest forestry companies in the world, reported revenues of USD 1,202.3 million in the fourth quarter, a decrease of 13.3 percent when compared to the third quarter, and a 12.9 percent decrease compared to the same period in 2018.
This variation is mainly explained by lower revenues in the wood products division, due to lower sales volume (- 7.7%) and to lower prices (- 0.9%), and because of a decrease in sales volume (-15.2%) and prices (-3.0%) in the pulp division.
Adjusted EBITDA for the fourth quarter of 2019 was USD 211.0 million, a decrease of 37.9 percent compared to the same quarter 2018.
Net income decreased by 231.2 percent during the fourth quarter of 2019 compared to 4Q-2018, reaching USD -92.0 million. This is mainly explained by lower revenues in the wood products and pulp businesses. Additionally, other expenses were higher due to impairment provisions. This was partially offset by lower cost of sales and distribution costs.
Sales of wooden panels (PB/MDP/MDF/HDF) in the fourth quarter decreased compared to the third quarter, with sales volume and prices decreasing by 8.4 percent and 0.7 percent, respectively.
During the fourth quarter, the Latin American market was more complex than the third quarter. In Chile, results were affected by the civil unrest. Brazil was affected by higher MDF supply and a weaker than expected economy. In Argentina, sales volumes were lower, but compensated by some price increases.
In the US and Canada prices remained stable, even though the seasonality normally affects sales during the fourth quarter. Nevertheless, the company experienced some oversupply due to more imports, which also affected sales.
During the fourth quarter, capital expenditures reached USD 434.3 million, USD 153.3 million or 54.6 percent higher than the third quarter. This was mainly due to an increase of 66.5 percent or USD 139.0 million in purchase and sale of property, plant and equipment, mainly due to the MAPA project. Total capex for FY 2019 was USD 1,350 million, up 46.6 percent against capital expenditures of USD 920.7 million in FY 2018.
