Ence achieved an EBITDA of 63 million in the first half of 2016


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The solid cash generation capability of Ence and its adjusted EBITDA margin of 22%, allows Ence to comfortably cover the planned investments and fulfill the commitment to remunerate its shareholders, even in an environment of very low pulp prices as the current one. 

  • Continue to improve efficiency: the cost of production fell again in the second quarter to € 366.8/t, and is expected to continue its reduction to € 350/t in the 4th quarter.

  • Strength of demand: the demand for eucalyptus pulp had a growth of 4% –in China rose to 16.3%–, which suggests that the pulp prices should improve its performance. 

  • The company expects to obtain a capital gain of € 14 million with the agreed divestment of assets amounting to € 34.9 million estimated for the period.

September 20, 2016. – Ence – Energía y Celulosa achieved an adjusted EBITDA of € 63.1 million in the first half of 2016,. Net profit in the 1st half amounted to € 11.4 million compared to 22.1 on the same period of the previous year. This result is mainly due to the lower average  sales prices, both pulp and electricity generated in its biomass plants, which was partially offset by 4% increase in pulp sales volume after the capacity extension in 20,000 tons of the Navia mill in 2015 .

Ignacio  Colmenares, CEO of Ence, highlighted that “despite the low pulp sales prices we have been able to keep a solid cash generation and achieve an adjusted EBITDA margin of 22%, what allows us to cover the planned investments and fulfill our commitment to remunerate our shareholders. Furthermore, he was confident that “pulp prices have bottomed in the second quarter thanks to strong demand. This will allow us to improve our results for the remainder of the year.” Note that global demand for pulp presented in a strong half-year growth of 4%, which in China was 16.3%.

The results presented today are reporting a decline in cash cost of 3.4% in the second quarter compared to the previous quarter. Thus, the cash cost stood at the end of the first semester at € 366.8/t and it’s expected to continue to decline gradually to € 350/t in the fourth, after the new investments in efficiency and the additional capacity extension of the Navia mill made in the first half of this year which will increase its production capacity in other 20,000 tons during this year.

Ence has continued its asset divestment program. In the first half of the year, the company has agreed to sell 1,547 hectares worth € 34.9 million, with an estimated capital gain of 14 million. In the 1st half Ence collected 7.3 million € and is expected to collect the remaining 27.6 million in the 2nd half.

The strong financial position of Ence has helped maintain an attractive shareholder remuneration, with € 0.1 dividend gross/share paid in April corresponding year 2015, which added to the interim dividend paid in October € 0.044 gross/share represent a yield of 4.7% on the average market price in 2015.

This situation of low leverage and high liquidity allows Ence, even in the current market conditions, to adapt and continue the implementation of its strategic plan for 2015-2020.