BRASIL - Dexco, the largest producer of wood panels and sanitary ware and metals in the southern hemisphere, reported that sales revenue in the first quarter of 2022 (1Q-2022) grew at 20.5%, despite the fall in volumes shipped by the Wood and Deca divisions.

This result was possible due to base prices being higher than those reported in the 1Q-2021 and to the price increases announced at the beginning of 2022.

The return of seasonality, particularly in the Wood Division (Duratex), led the Company to channel more products to the external market, with an increase of around 26.0% in the volume shipped versus the same quarter in 2021, discounting sales made by the unit in Colombia. This change led to an increase of 42.0% in net revenue arising from exports over the same period.

The first quarter of 2022 was marked by the return of seasonality, which led to a drop in sales volumes on an annual comparison, especially in the Wood Division.

However, higher pricing points together with significant operational and sales improvements in the Deca and Tiles Divisions offset the drop in sales and led to another record first quarter for Dexco, with an Adjusted and Recurring EBITDA of BRL 503.7 million.

Despite the improvement in the absolute result, pressure on the costs of materials and consumables, such as urea and natural gas, was a major contributor to the EBITDA margin shrinking during the period, ending the quarter at 23.6%.

The Company ended 1Q-2022 with Recurring Net Income of BRL 198.3 million, a drop of 10.8% versus 1Q-2021.

The Wood Division (Duratex) ended the quarter with 732.9 thousand m³ of panels sold, of which approximately 26.0% were sent to the Colombian operation and the external market, 5.0 p.p. above the volume shipped in 1Q-2021. In addition, there was a significant improvement in the product mix, with 50.1% of the volume sold being coated products.

This led to sales revenue of BRL 1,349.5 million, 23.5% and 3.6% greater than for 1Q-2021 and 4Q-2021 respectively. Of this, BRL 418.1 million was generated by sales in Colombia and the external market.

Pressure on the cost of materials and consumables had a negative impact on the Wood Division’s results, with a significant increase in the cost of urea, which currently represents around 20.0% of the Division’s costs