Presentation 2Q11 English

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Providência - Presentation 2Q Financial Results

Providência - Presentation 2Q Financial Results

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  • 1. 2Q11 Results August 12th, 2011
  • 2. SCHEDULE Providência USA HIGHLIGHTS RESULTS OUTLOOK Providência USA 2
  • 3. HIGHLIGHTS Sales Volume amounted to 22.0 thousand tons in the quarter, a growth of 10.1% inrelation to the same period in 2010 and also as compared with 1Q11; The beginning of work at the site of the new plant which will begin operations in 2012in Pouso Alegre, state of Minas Gerais, with a capacity of 20,000 tons/year of 20,nonwovens; The evolution of production of the Company’s first plant in the United States, with aproduction line of 20,000 tons/year of installed nonwovens capacity. In this first half wehave already reached a sales volume of 2,563 tons, in line with the plans for ramping up tonsvolume. The plant is expected to be operating at full capacity by the end of the thirdquarter of 2011; The payout in May of a further R$ 21.8 million in dividends, approved at the O/EGM ofApril 27 2011, totaled 100% of the calculation base for adjusted dividends in 2010. 3
  • 4. SCHEDULE Providência USA HIGHLIGHTS RESULTS OUTLOOK 4
  • 5. SALES VOLUME (in thousands of tons) tons) 42,0 38,7 3,5 During the quarter, the Company posted 2,2growth in sales volume of 10.1% compared with 10.the same period in 2010 and also in comparisonwith 1Q11; 38,5 36,5 22,0 20,0 20,0 2,1 1,3 1,4 18,7 18,6 19,9 1H10 1H11 Our first production line in the US has already 2Q10 1Q11 2Q11 contributed 2,563 tons in sales in 1H11, in line with the Company’s forecast for ramping up 5 production.
  • 6. NET REVENUE NONWOVENS (in millions of Reais) Net revenue reached R$ 126.8 million in 2Q11 a growth of 10.1% in relation to 1Q11 and 126. 11, 10.against 1H10, the increase was 9.6% reaching R$ 241.9 million ; 241. 260,0 240,0 220,0 200,0 180,0 160,0 140,0 120,0 241,9 220,8 100,0 80,0 126,8 116,3 115,1 60,0 40,0 20,0 - 2Q10 1Q11 2Q11 1H10 1H11 The increase is due to the realignment of prices and to the startup of the newproduction line in the United States. 6
  • 7. COGS (Cost of Goods Sold) (Cost NONWOVENS (in millions of Reais) 200,0 R$ 10,00 R$ 3,90 R$ 4,13 Cost of goods sold (COGS) totaled 94.5 94. 180,0 R$ -200,0 R$ 10,00 million in 2Q11, a rise of 17.8% when 17. 160,0 -R$ 10,00 R$ 9,00180,0 140,0 compared with 2Q10 and 19.5% 19. in R$ 8,00 -R$ 20,00160,0 120,0 comparison with 1Q11; R$ 7,00 -R$ 30,00140,0 100,0 R$ 6,00 -R$ 40,00 173,6 80,0120,0 151,1 R$ 5,00 R$ 4,29 -R$ 50,00 R$ 4,01 R$ 3,96 60,0100,0 R$ 4,00 -R$ 60,00 40,0 R$ 3,00 80,0 20,0 -R$ 70,00 R$ 2,00 60,0 - -R$ 80,00 R$ 1,00 94,5 1H10 1H11 40,0 80,2 79,1 R$ - The increase is largely linked to: 20,0 -R$ 1,00 • The higher sales volume in 2Q11; - -R$ 2,00 2Q10 1Q11 2Q11 •The significant hike in polypropylene prices. 7
  • 8. EBITDA (in millions of Reais) and EBITDA Margin (%) 100,0% Adjusted Ebitda in 2Q11 reached R$ 18.1 million, a reduction of 18.3% when 18. million compared with 1Q11. In relation to 50,0%21,4% 2Q10, there was a decline of 27.2%; 19,2% 14,3% 0,0% These reductions are directly related to: -50,0%24,9 22,2 •The increase in the prices of our main 18,1 raw material, polypropylene. According to Chemical Data Index (CDI), the -100,0%2Q10 1Q11 2Q11 increase was of 38% in the first half 2011; Ebitda Ebitda Margin (%) • The startup and adjustments in the US production line. 8
  • 9. 14,0 10,0% 13,0 NET INCOME (in millions of Reais) 12,0 and NET MARGIN (%) 11,0 3,9% 5,0% 3,0% 10,0 9,0 The net income for the quarter amounted 8,0 0,0% to R$ 2.3 million and R$ 9.5 million in the first 7,0 six months of the year. It represents a 45.1% 45. 6,0 5,0 -5,0% increase in relation to 1H10. 9,5 Lucro Líquio 14,0 4,0 13,0 3,0 6,5 12,0 -10,0% 11,0 2,0 10,0 1,0 9,0 - -15,0% 8,0 14,6 1H10 1H11 7,0 6,0 11,1 5,0 For the quarter (Retained Earnings) totaled R$ 14.6 14. 4,0million,million since realization of deemed costs in the quarter is 3,0 2,0added in net of tax. 1,0 - It represents a 31.5% increase in relation to the R$ 11.1 31. 1H10 1H11million of dividends distributed regarding to the 1H10. 9
  • 10. CASH AND CASH EQUIVALENTS (in millions of Reais) The Company reported a decrease in itscash position of 3.1% or R$ 6.9 million in 250,0relation to the same period in 2010; 200,0 This reduction is directly related to the 150,0 270,6down payment effected for the two lines 225,8 218,8 100,0that will startup in 2012; a large part of this 50,0amount will be reimbursed with the inputof funds already raised; - 2Q10 1Q11 2Q11 In the 2Q11 we also paid dividends of R$21.8 million. 10
  • 11. NET DEBT (in millions of Reais) The company’s net debt increased 34.2% compared with 2Q10 due in large part to fundingfor financing capex for the US plant; 250,0 200,0 150,0 258,3 224,3 100,0 192,5 50,0 - 2Q10 1Q11 2Q11 At the end of the quarter, the Company held 61% of its debt in local currency while the 61%remaining 39% was foreign currency denominated. 39% 11
  • 12. DEBT / CASH (in millions of Reais) Consolidated Net Debt Ch. 2Q11 /R$ (MM) 06/30/2010 06/30/2011 2Q10 Total Debt Short Term 126,7 260,0 105,2% Long Term 291,6 217,1 -25,5% Total 418,4 477,2 14,1% Cash 225,8 218,8 -3,1% Net Debt 192,5 258,3 34,2% Net Debt / Adjusted EBITDA 2,19 3,04 38,8% Shareholders Equity 690,6 685,1 -0,8% 12
  • 13. SCHEDULE Providência USA HIGHLIGHTS RESULTS OUTLOOK
  • 14. OUTLOOK We expect our margins to recover to Company’s historical margins, due to therealignment of sales prices after the high cost pressure we faced during the 1H11; In the second half of 2011, we expect to see increased sales volume. Since all startup volumeadjustments have been concluded and sales order book is full, the US production lineshould be operating at full capacity from 3Q11; The two production lines that will start up in 2012 – Pouso Alegre, MG, Brazil, in the firsthalf, and Statesville, NC, USA, in the second half, are the Company’s main investmentprojects totaling a USD 123 million investment. They are in execution according to scheduleand will add 40,000 tons to our current installed capacity, that is, a 40% increase; 40, In August/2011 we received the first tranche of HSBC/Hermes financing, relative to thedown payment of the abovementioned investments. From now on, the financing tranchesare aligned to the disbursements. 14
  • 15. CEO: Hermínio V. S. de Freitas CFO: Eduardo Feldmann Costa IR : Gabriela Las Casas Beatriz Tokarski Tel: +55 (41) 3381-8673 Fax: +55 (41) 3283-5909 São José dos Pinhais – PR www.providencia.com.br/ir www.twitter.com/providencia_riThe words “believe”, “anticipate”, “expect”, “estimate”, “will”, “plan”, “may”, “intend”, “foresee”, “project” and other similar expressions indicate forward-lookingstatements. These forward-looking statements involve uncertainties, risks and assumptions, since they include information related to our potential or assumed futureoperating results, business strategy, financing plans, competitive position in the market, industry environment, potential growth opportunities and the effects of futureregulations and competition. In addition, forward-looking statements refer only to the date on which they were made and should not be taken as a guarantee of futureperformance. Providência is under no obligation to update this presentation with new information and/or future events .