Release Date: May 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Empresas CMPC SA (XSGO:CMPC, Financial) reported a net income of $50 million in the first quarter of 2025, a significant increase from the $10 million in the previous quarter.
- The Pulp business achieved an EBITDA of $192 million with a margin of 24.5%, reflecting a 7% year-over-year increase due to higher sales volumes and operational efficiencies.
- The Bio-packaging segment saw a 63% increase in EBITDA quarter-over-quarter, driven by cost and operational efficiencies.
- The company achieved a positive free cash flow of $85 million in the first quarter, a substantial improvement from the outflows in previous quarters.
- Empresas CMPC SA (XSGO:CMPC) was ranked among the top 1% of companies worldwide in the S&P Global Sustainability Yearbook for the second consecutive year, highlighting its commitment to sustainability.
Negative Points
- Consolidated sales for the first quarter of 2025 were $1.8 billion, down 6% quarter-over-quarter and 7% year-over-year, reflecting lower revenues across all business segments.
- The Softys business reported a 51% year-over-year decline in EBITDA, impacted by increased competition and currency fluctuations.
- The Biopackaging segment experienced a 6% year-over-year decline in EBITDA due to lower average prices.
- Net debt increased to $4.8 billion, with a net debt-to-EBITDA ratio of 3.41x, indicating a higher leverage level.
- The company faces uncertainty in the Pulp market, particularly in China, due to unclear price scenarios and potential impacts from the trade war.
Q & A Highlights
Q: With the current price scenario in China, what are your views for the second quarter and the rest of the year regarding pulp prices?
A: Guilherme Viesi, Chief Commercial Officer of CMPC Celulosa, explained that the price scenario in China is unclear, with resale prices very low. He anticipates market closures will lead to price recovery, as no new pulp capacity is expected this year. He expects prices to eventually rise due to organic market growth and believes Chinese domestic producers will reduce production, leading to increased market pulp purchases.
Q: Can you provide an update on the Natureza project and its timeline?
A: Francisco Ruiz-Tagle Edwards, CEO, stated that CMPC is committed to the Natureza project, which is competitive and progressing as planned. The decision on the project will likely be made next year, with no current plans to postpone it. The focus is on engineering, permits, and forest needs.
Q: How is CMPC planning to finance the Natureza project given the current leverage levels?
A: Fernando Hasenberg Larios, CFO, mentioned that while it's too early to finalize the financing plan, CMPC is committed to maintaining a strong balance sheet. They are working on divestments and have adjusted local bond covenants to support the project financially.
Q: What is the outlook for the Softys business, particularly regarding margins and the impact of the Ontex acquisition?
A: Gonzalo Darraidou Diaz, CEO of Softys, expects margins to recover by the last quarter of the year through strategies like revenue growth management and cost efficiencies. The Ontex Brazil acquisition will be run as a stand-alone for 12-18 months to understand their processes before integration.
Q: What is the outlook for the Biopackaging segment in terms of demand and prices?
A: Francisco Ruiz-Tagle Edwards, CEO, noted that the Biopackaging market is currently weak, particularly in boxboard, due to global economic conditions. However, the corrugated boxes business is performing well, driven by export products, and is expected to continue doing well.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
