BRAZIL - Eucatex, one of the largest manufacturers of wood panels in Brazil, with operations also in the paint, varnish, laminated flooring and doors segments, announced its results for the third quarter of 2022 (3Q-2022).

Total net sales revenue in 3Q-2022 reached BRL 672.8 million, compared to BRL 654.0 million in 3Q-2021, up 2.9%.

In the Wood Segment, sales revenue decreased 2.4% in the quarter.

In the 3Q-2022  EBITDA totaled BRL 126.2 million, down 17.1% from 3Q-2021. EBITDA Margin in 3Q-2022 reached 18.8%, decreasing 4.5 p.p. from the same period last year.

Recurring Net Income (profit) in 3Q-2022, excluding the effect of non-recurring expenses and net of income tax, totaled BRL 47.5 million compared to BRL 69.8 million in the 3Q-2021, down 31.9%

Investments in 3Q-2022 totaled BRL 68.1 million and were allocated to maintaining the Company’s industrial and, chiefly, forest operations. For 2022, investments of around BRL 248.0 million are planned, an increase of 19.5% from 2021, due to the significant increase in the plantation of new forests and the increase in prices of imported parts and services.

The Company’s operating markets slowed down in 3Q-2022 compared to the same period last year. Demand in the domestic market remained weak. In the export market, expectations of a U.S. economic recession, with interest rate hikes combined with high external logistics costs, has been undermining Brazil’s competitiveness, which has adversely affected the Company’s exports. Due to the systematic lack of containers, in 3Q-2022, the Company chartered vessels to ship its production. Though these operations were successful - and cheaper than traditional shipments – these entail longer lead times, requiring higher inventory levels.