Q1 2025 Ence Energia y Celulosa SA Earnings Call Transcript
Key Points
- Pulp prices have rebounded by 21% since December, indicating a strong market recovery.
- ENCE Energia y Celulosa SA (FRA:ENCA) has significant competitive advantages in logistics and customer service in Europe, making it resilient to trade tariffs.
- The company is on track to start producing fluff pulp in the fourth quarter, which is expected to deliver higher margins.
- The acquisition of the La Galera biomethane plant has already improved production by 67% in the first quarter.
- ENCE's ongoing FX hedging policy mitigates the impact of a weaker dollar, securing an average cap of $1.09 for 50% of expected pulp sales in 2025.
- There is short-term turbulence in the market due to US tariff announcements, causing uncertainty.
- The absence of the cogeneration turbine at Navia had a one-off cost impact of EUR8 million in the quarter.
- The company faces challenges in fixing pulp prices for May in Europe, indicating market volatility.
- There is a risk of increased competition from US producers potentially exporting more volumes to Europe.
- The renewable energy business EBITDA was 10% lower than in the first quarter of last year, indicating challenges in this segment.
Good morning, ladies and gentlemen. Welcome to the Ence Q1 2025 results presentation. I will now hand over to Mr. Ignacio Colmenares, Executive Chairman; and Alfredo Alveo, CFO. Gentlemen, please go ahead.
Good morning, ladies and gentlemen. Thank you for joining Ence's first-quarter 2025 results conference call. Sorry for the small delay, but as you can see, we have a light problem on the presentation. You're going to see some paragraphs in red. We don't know why. We've been trying to correct that, but we haven't been able.
Our CFO, Alfredo Avello; and our Head of IR and M&A, Inés Ãlvarez, are also connected to this call. After the presentation, we will be pleased to answer any questions you may have.
The tight pulp supply demand balance drove prices higher in the first quarter, as you can see on the slide 6. Pulp prices bottomed out in December. Since then, the European hardwood pulp price has rebounded by 21% to $1,218
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