Ence Energía y Celulosa returned to profits in the second quarter of 2021, due to the high prices of cellulose and the efficiency and good operating performance of the company’s plants.
The company recorded an ordinary net profit of € 12 million in the second quarter of 2021, compared to the losses of € 13 million recorded in the same period of the previous year. Ence’s consolidated operating result before hedging reached € 56 million between April and July, which is more than doubling that obtained in the second quarter of 2020.
In the Pulp business, operating income reached € 42 million, which is 5 times that of 2020. In addition, pulp production increased 4% year-on-year. In the Renewable Energy business, the operating result reached € 14 million (+ 31% excluding the thermosolar plant sold in December). Ence has a portfolio of 513 MW of biomass and photovoltaic projects, with access to the grid and secured locations, which is expected to begin to be built progressively from 2022.
The company maintains a very healthy balance sheet with a net debt of € 43 M in its Pulp business, € 133 M in the Renewable Energy business and with more than € 380 M of cash available on the balance sheet, after having prepaid loans for € 95 million in the first half of the year.
In compliance with accounting regulations, the company has recorded in its accounts the impact of a possible closure of its cellulose biofactory in Pontevedra, amounting to € 196 M, following the judgments issued in July by the National Court, which annul the extension of the concession of the lands of public domain on which this plant is based. The accounting regulations do not allow provision for the costs of the future ERE of termination of the workers at the Pontevedra plant and part of the group’s corporate structure.
Today the company has presented the corresponding appeals before the Supreme Court, and will exhaust all legal channels in defense of the legality of the extension of this concession, on whose activity 5,100 direct and indirect jobs depend.
However, if it were finally forced to close this biofactory, the company would have to face a disbursement of € 48 million and the cost of the ERE, not provisioned. Likewise, and in compliance with accounting regulations, the company has recorded an impairment of the value of the assets linked to the biofactory for a net amount of € 148 million, which will not imply a cash outflow.