Ence – Energía y Celulosa recorded losses of €24m in the third quarter of the year – up from €28m in the first nine months of the year – as a result of the floor reached in pulp prices; a context that was mitigated by the cost reduction and increased production achieved by the Group in this period.
The European pulp price has already started to recover in October and the main producers have announced several increases to USD 980 gross per tonne from November onwards, bringing it in line with the average cycle price.
The Group’s operating profit was € -1.8m in the third quarter and € 63.7m in the first nine months of the year.
Ence’s differentiated products, which are better suited to replace long fibre and plastic and provide an additional margin, accounted for 25% of pulp sales revenues in the quarter.
In addition, the sale of a photovoltaic plant under construction in Huelva during the third quarter resulted in an operating profit of €4m, which is in addition to the €23m generated from the sale of a first photovoltaic plant under construction in Jaén during the first quarter. The sale of two further plants under development in Seville and Granada is expected to be completed in 2024.
GROWTH AND DIVERSIFICATION
The strength of the balance sheet provides flexibility to take advantage of growth and diversification opportunities in the Group’s two businesses. In the pulp business, Ence continues to promote the sale of its differentiated products and has approved the investment for the implementation of a project for the production of fluff pulp for absorbent hygiene products at its biofactory in Navia (Asturias).
The company will also present in the first quarter of 2024 its new Strategic Plan for the next five years, which will include an investment plan for its Pontevedra biofactory.
In addition, the project that Ence is studying to launch in the Galician town of As Pontes was declared a strategic project by the Government of Galicia in June. It is an innovative initiative for the production of bleached recycled fibre and biomaterials, which includes a pilot project for the recovery of textile fibres. All this, without increasing the consumption of wood, as its raw materials will be cardboard, paper and recovered fibres.
In the Renewables business, Ence Biogas aims to develop 20 biomethane plants over the next five years and already has six projects in the engineering phase, which are scheduled to come on stream in 2026.
Also in the Renewables business, the Group has a portfolio of 140 MW with which to participate in upcoming biomass auctions and is analysing several opportunities for the generation of renewable industrial heat, through its subsidiary Magnon Servicios Energéticos.
Ence continues to be the leading company in sustainability in the pulp sector worldwide for the third consecutive year according to the latest rating of Sustainalytics, which in 2023 reiterated its overall score of Ence’s environmental, social and corporate governance performance at 90/100. In addition, this year Ence has been recognized with the platinum medal Ecovadis: the highest rating awarded by this platform, specializing in assessing the sustainability of companies and has been included in the IBEX ESG index.
The company distributed dividends of €0.29 gross per share in March and May 2023 for a combined amount of €140m against 2022 results, which has meant a return of 16% for shareholders.