BRAZIL - In the second quarter of 2020, Duratex, the largest manufacturer of wooden panels in the Brazil, reported sales revenue of BRL 1,046.4 million, which represented a drop of 8.6 percent, which amid the impact from the COVID-19 crisis, can be considered as mild.

Net revenue from the foreign market was BRL 162.8 million, down 25.7% compared to the second quarter of 2019. Despite the exchange rate variation that benefited the Company's positioning in the foreign market, the isolation measures arising from COVID-19 impacted not only Brazil, but also the main markets where Duratex products are positioned, thus leading to a sharp drop in sales to these destinations. Thus, the share of the foreign market in total revenue represented 15.6%.

Despite the operational improvement noted throughout the quarter, especially in June, when a positive result was seen, the sharp drop in volume combined with the shutdown of factories in April, led the Company to report a profit of only BRL 2.2 million in the second quarter of 2020.

In June, the domestic wood panel market grew by almost 20% compared to the same month in 2019, according to IBÁ data. The Wood Division presented a result superior to that determined by the market, reflecting its good positioning with strategic customers and greater agility in the process of resuming factory production.

The Wood Division shipped 499.8 thousand m3 in the second quarter, a reduction of 18.0% compared to the same period in 2019. This drop is justified by the strong retraction in sales in April, despite the rapid recovery in May and June, with an increase of almost 30.0% in June compared to the same month of 2019 . In addition, the agile process of resumption of the factories, coupled with the strengthening of customer relations, encouraged the Company to present relevant market share gains in all its product lines, including those with less competitiveness such as white MDF and raw MDP. In the foreign markets the significant increase in sales to diversified markets such as Asia and North America was not enough to compensate for the losses resulting from the commercial closings in Latin America, where Duratex panels have a consolidated market position.