BRAZIL - Dexco, the largest wooden panel manufacturer in Brazil,  ended the year with Sales Revenue slightly up in 2021.

The pricing pass-through in the Finishings for Construction Division coupled with the improvement to the mix in the Wood Division were the main contributory factors to this increase.

In the last quarter, however, an increase in Unit Revenue across all Divisions was not enough to offset the fall in sales volumes, which resulted in Sales Revenue falling 12.0% versus 4Q-2021.

In 2022, Dexco reaffirmed its long-term strategy, maintaining its focus on price positioning and mix across all Divisions, with emphasis on the Wood Division.

However, the fall in demand for its products, especially in the second half of the year, together with inflationary pressures in the period, led to a decrease of 20.9% in Adjusted and Recurring EBITDA versus 2021, and of 37.7% in 4Q-2022 versus 4Q-2021. It is worth noting that, despite the drop off in results, the Company ended 2022 with the second best Adjusted and Recurring EBITDA in its history, 90.5% higher than for 2019, the period prior to the COVID-19 pandemic.

With the decrease in the operating performance, Dexco ended 4Q-2022 with a Recurring Net Income of BRL 207.0 million, a fall of 49.2% versus 4Q-2021. The Recurring Net Income for the year was BRL 771.1 million, 32.8% below 2021.

The resilience shown by the Wood Division was the main highlight of the year. Even facing significant inflationary pressures and demand slowing down from the prior year, the Division managed to report a steady increase in market share, despite falling sales and a shrinking market, according to data released by IBÁ.

Price stability was also a feature of 2022, enabling Sales Revenue, despite falling volumes, to end the year higher than in 2021, a historic record for the Wood Division.

The Wood Division ended the year with 2,87 million m³ of panels sold, of which approximately 20.0% were allocated to the operation in Colombia and the export market. The results of recent investment to increase panel coating capacity are already evident, with a 4.7% increase in sales of coated products in 2022. For the quarter, the volume sold was 687.6 thousand m³, 9.2% below the figure for 4Q-2021, but with a 14.0% growth in sales of coated panels over the same period.