Ence – Energía y Celulosa achieved an attributable net profit of € 2.2 M in the third quarter of the year, compared to losses of € 16 M recorded in the same period of 2020, thanks to the strong recovery in cellulose prices in 2021 after the minimums recorded in the previous year.
The company recorded profits between July and September despite the impact of the pulp and electricity price hedges, which were exceptionally closed in 2020, within the aforementioned context of minimum prices and high uncertainty caused by the spread of COVID. These represented a negative settlement of € 36 million in the third quarter and € 48 million until September.
In the first nine months of the year, the group obtained an ordinary net profit of € 4 million although, in compliance with accounting regulations, the company has recorded in the second quarter the accounting impact that the judgments issued by the National Court could have, that annul the extension of the concession of Ence’s biofactory in Pontevedra. In addition to presenting the corresponding appeals before the Supreme Court, the company will exhaust all legal channels in defense of the legality of the extension of this concession.
Asset impairment and expense provisions were recorded in the second quarter financial statements that will not entail a net cash outflow of € 148 million, together with a provision of € 42 million to meet the costs estimated by the potential dismantling of the biofactory and a provision of € 6 million to meet the estimated costs of the potential cancellation of contracts.
The group’s consolidated operating result was € 27 million in the third quarter and € 86 million so far this year. In the Pulp business, the aforementioned price recovery boosted the operating result before hedging to reach € 52 million in the third quarter and € 100 million in the first nine months of 2021, 6 times more than in the same period from the previous year.
In the Renewable Energy business, the operating result before hedging reached € 11 million in the third quarter and € 34 million in the first nine months of the year, 21% more than its comparable in the same period of 2020 (excluding the solar thermal plant sold in December).
Ence has a portfolio of 513 MW, with access to the grid and secured locations, of which 140 MW correspond to three biomass plants and 373 MW to five photovoltaic projects. Its administrative processing is ongoing and it is expected to be completed progressively over the next few quarters.
Likewise, the company has started an ordinary process of evaluating offers for the possible sale of its portfolio of 373 MW photovoltaic projects, with the aim of continuing to grow in renewable energies. The process is in a preliminary phase of receiving non-binding offers, without any negotiation with potential interested investors having yet started.
The group’s net debt fell 8% in the third quarter, to € 162 million. The company maintains a very healthy balance sheet, with a net debt of € 18 million in its Pulp business and € 144 million in the Renewable Energy business.
