Ence – Energía y Celulosa recorded a net profit of €22 M in the third quarter of the year, (compared to €2 M recorded in the same period of 2021), despite the temporary suspension of activity in its biofactory in Pontevedra. Between January and September, the group accumulated a net profit of €67 million.
The activity of the Pontevedra biofactory has been suspended since July 20 due to the drop in the flow of the Lérez River (from which the facility is supplied) below its ecological flow. It is estimated that the plant will be able to start the start-up process in the second week of November, thanks to an innovative solution in the testing phase that the Company has developed for drought situations and minimizing the river’s water consumption. The start-up process will be progressive, once the necessary permits have been obtained and the maintenance and repair work of the catchment infrastructure has been completed after the period of inactivity, until reaching a normalized production rate in the second week of December.
The rise in the price of pulp and the improvement in the exchange rate continued to boost the operating margin of the business, mitigating the effect of the aforementioned temporary shutdown of the Pontevedra biofactory and offsetting the generalized inflation in the cost of raw materials. Thus, the operating result of the Pulp business reached €41 M in the third quarter and rose to €111 M in the first nine months of the year. The operating result of the Renewable Energy business amounted to €18 million in the third quarter, and in the first nine months of the year, to €96 million.
Free cash flow generated in the third quarter reached €116 M and rose to €245 M year-over-year, ending the period with a net cash position of €72 M compared to net debt of €102 M at the end of 2021. The strength of the group’s balance sheet, with a net cash position, gives it full flexibility to take advantage of growth opportunities that may arise in its businesses.
In line with the new dividend policy, the Board has agreed to distribute a third interim dividend amounting to €22 million, equivalent to €0.09 gross per share, which will be paid on November 15 and in addition to the €32 million distributed in August and the €13 million distributed in May.
Likewise, in 2022 Ence continues to be the leading company in sustainability in the pulp sector worldwide according to the latest rating of Sustainalytics, which in 2022 has reiterated its global score of Ence’s environmental, social and corporate governance performance at 91/100.
PROJECT PORTFOLIO
In Renewable Energy, through its subsidiary Magnon Green Energy, Ence has a portfolio of 140 MW of biomass and 673 MW of photovoltaic, in addition to other opportunities in analysis. In the pulp business, Ence continues to advance in the “Navia Excelente” project to boost the sale of its differentiated products, diversify its production towards fluff pulp for absorbent hygienic products and to decarbonize the plant with a reduction of 50,000 tons of CO2 per year.
In addition, at the end of June, Ence and the Xunta de Galicia announced a new project in the town of As Pontes in A Coruña, whose study is beginning, for the production of recycled fiber and biomaterials from recovered paper and cardboard and cellulose produced by Ence.
Recently, Ence has launched a subsidiary to analyze the potential obtaining and commercialization of biogas from organic waste. It is a new line of activity based on the circular bioeconomy -which already supports its two main businesses-, which has a high growth potential in Spain and is consistent with its diversification strategy in renewable energies.
The Supreme Court has postponed the date scheduled for the vote and ruling of the first appeal filed against the judgments of the National Court that annul the extension of the concession of Pontevedra until 2073, to coincide the vote and ruling of the two admitted appeals. It is foreseeable that the corresponding judgment will be published during the coming months.
