1Q21 Earnings Release | |
1Q21 Results Webcast | |
May 29th, 2021 | Thursday, June 3rd, 2021 |
13:00 EST (NY Time) | |
13:00 Santiago Time | |
Please register at:investor.empresascopec.cl |
EBITDA | EBITDA in 1Q21 was US$693 million, increasing 55.2% YoY, largely because of increases at Arauco and Copec. QoQ, |
EBITDA improved 20.9%, also because of results in the companies mentioned. | |
1Q21 / 1Q20 | The company posted net income of US$229 million, increasing on that of US$6 million YoY. That is explained by a |
better income performance of Arauco, Copec and Abastible, along with less negative non-operating income, mainly | |
due to more favorable exchange rate differences, lower financial costs and other expenses. | |
1Q21 / 4Q20 | Net income rose US$110 million QoQ, on account of higher operating income in the forestry and fuels businesses. |
Non-operating income was more favorable, mainly explained by higher profits in associates. | |
In the Annual Shareholder's Meeting, a new board was elected for the next 3 years. Also, the 2021 investment plan | |
Highlights | was announced for a total of US$1.88 billion. Regarding projects, Mina Justa started operations in March with first |
shipments expected in the second quarter of the year. The MAPA project had progress of 83% at the close of April. | |
During May, Arauco subscribed an agreement for the sale of forest assets for US$385.5 million and Abastible | |
subscribed a contract to sell its stake in Gasmar. |
Net Debt /
EBITDA
The leverage ratio dropped from 4.2x to 3.6x. It should be highlighted that this ratio had risen lately due to the effects of low pulp prices on EBITDA, the fallout of COVID-19 on fuel volumes and a period of heavy investment. Nonetheless, this situation has been reverted, due to a strong performance of the pulp, wood products and fuel businesses, along with a gradual completion of large investment projects.
1Q 21 | 4Q 20 | 1Q 20 | 1Q21 / 1Q20 | 1Q21 / 4Q20 | Accum 21 | Accum 20 | Chg. 21 / 20 | |
Revenues | 5,353 | 4,834 | 5,405 | (1.0%) | 10.7% | 5,353 | 5,405 | (1.0%) |
EBIT | 406 | 264 | 176 | 131.1% | 54.0% | 406 | 176 | 131.1% |
EBITDA* | 693 | 573 | 446 | 55.2% | 20.9% | 693 | 446 | 55.2% |
Non operating income | (57) | (83) | (127) | 55.0% | 31.0% | (57) | (127) | 55.0% |
Total profit | 251 | 132 | 12 | 2,021.2% | 90.6% | 251 | 12 | 2021.2% |
Profit attributable to controllers | 229 | 118 | 6 | 3,499.4% | 93.3% | 229 | 6 | 3,499.4% |
Profit attributable to minority | 22 | 13 | 5 | 305.5% | 66.6% | 22 | 5 | 305.5% |
EBITDA Margin | 12.9% | 11.8% | 8.3% | 56.7% | 9.2% | 12.9% | 8.3% | 56.7% |
EBITDA / Net interest expenses | 7.9 | 6.2 | 4.6 | 72.3% | 26.6% | 7.9 | 4.6 | 72.3% |
- EBITDA = Operating Income + Depreciation + Amortization + Fair value cost of timber harvested Figures in US$ million
Contact information:
C rist ián Palacio s | C amilo M ilic | Olivia T af ra |
Director of Finance and IR | Investor Relations | Investor Relations |
+ 562 24617042 | + 562 24617046 | +562 24617000 |
cristian.palacios@empresascopec.cl | camilo.milic@empresascopec.cl | olivia.tafra@empresascopec.cl |
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SIMPLIFIED OWNERSHIP STRUCTURE
HIGHLIGHTS
Empresas Copec announces Investment Plan
The Ordinary Shareholders' Meeting was held on April 28, in which the company's investment plan for 2021 was announced. This envisages capital expenditures of US$1.88 billion, and the forestry and fuels sectors will account for 65% and 30% of the total resources, respectively.
Sale of Forest Assets
On May 13, 2021, Forestal Arauco S.A., a subsidiary of Arauco, executed a Master Agreement, by means of which it agreed to sell to a third party, 461 forest properties that include a total of 80,489 hectares, of which 61,742 are productive hectares, for a total price of US$385 million plus the corresponding Value Added Tax. The closing of the transaction is subject to compliance with conditions precedent that are customary for this type of transactions, including the authorization by the antitrust authorities. It has been preliminarily estimated that, should closing of the transaction occur, it will generate an after-tax profit of approximately US$192.5 million.
Agreement for the sale of Gasmar
In May, Abastible signed a contract agreeing to sell its entire 36.25% interest in Gasmar S.A. The share sale price will be determined considering an enterprise value of US$422.5 million for 100% of such company, on a cash-free and debt-free basis, and such amount could alter due to the application of adjustments stipulated in the contract and usual for these kinds of transactions. The closing of this transaction is subject to some suspensive conditions, including the corresponding approval by the antitrust authority, which is expected to occur this year.
To date, it has been preliminarily assessed that this operation will have a positive effect on the income of Abastible of about US$96.8 million before tax. Empresas Copec has a 99.2% shareholding of such subsidiary.
Changes to the Board of Directors
The Ordinary Shareholders' Meeting voted on a new board of directors for the 2021-2024 period. Roberto Angelini, Jorge Andueza, Manuel Bezanilla, Juan Edgardo Goldenberg, Andrés Lehuedé and Francisco León were re-elected. After years of valuable contribution, Andrés Bianchi, Gabriel Bitrán and Arnaldo Gorziglia left the Board of Directors. In their places, Marcela Achurra, Karin Jürgensen and Maurizio Angelini were elected, all of them outstanding professionals in their law, economy and architecture fields, respectively. These changes give shape to a board of directors that is more diverse regarding gender, skills, experience and age.
Mina Justa Project
Mina Justa started up in March 2021. During the last few weeks started accumulating inventory, and the first shipments are expected to be in the second quarter, in a very positive price scenario. It is estimated that over 100 thousand tons will be produced and sold throughout 2021. The total project investment reached approximately US$1.6 billion.
MAPA Project Progress
MAPA Project overall progress as of the end of April 2021 was 83%. Work on the marine outfall was recently completed, as well as on the high voltage transmission line. Hydraulic test of the power boiler was completed, and the construction works continue.
It is estimated that the startup will take place during the fourth quarter of 2021, amid an optimistic pulp price scenario and with collaborators' health and safety being the main priorities.
Capital Contribution to Arauco
In May 2021, Empresas Copec subscribed and paid its part of a capital contribution of US$200 million to Arauco. This amount is in addition to the US$250 million provided in September 2020. The aim of the capital increase is to help finance projects and bolster the company's financial standing.
2
CONSOLIDATED RESULTS
1Q21 / 1Q20. The net income attributable to the controller's owners, net of minority interests, was US$229 million in 1Q21, increasing US$222 million YoY. That was mainly because of operating income climbing US$230 million, and less negative non-operating income of US$70 million, partly offset by higher tax of US$61 million.
In the forestry business, Arauco posted an increase in revenues, due to higher pulp prices and volumes in 2021.
The fuels business had an operating income increase, mainly at Copec Chile and Terpel, on account of better margins, partly related to a higher revaluation of inventories and the local currency appreciation effect when consolidating the income in dollars. Mapco had lower operating income from a drop in volume. Abastible posted higher operating income YoY, explained by a better performance of its operations in Chile and Colombia, along the local currency appreciation effect.
The company's gross profit rose 31.7% amounting to US$957 million, which mainly came from Arauco accounting for US$449 million; Copec for US$392 million; Abastible for US$84 million; Igemar for US$21 million; and Sonacol for US$11 million.
Non-operatingincome was less negative than in 2020, because of more favorable exchange rate differences of US$25 million and lower other expenses and financial costs of US$19 million and US$12 million, respectively.
Income Statement | 1Q 21 | 4Q 20 | 1Q 20 | 1Q21 / 1Q20 | 1Q21 / 4Q20 | Accum 21 | Accum 20 | Chg. 21 / 20 |
Revenues | 5,353 | 4,834 | 5,405 | (1.0%) | 10.7% | 5,353 | 5,405 | (1.0%) |
Cost of sales | (4,397) | (3,963) | (4,679) | 6.0% | (10.9%) | (4,397) | (4,679) | 6.0% |
Administration & distribution expenses | (551) | (607) | (551) | (0.0%) | 9.3% | (551) | (551) | (0.0%) |
Operating Income | 406 | 264 | 176 | 131.1% | 54.0% | 406 | 176 | 131.1% |
Other income | 84 | 121 | 73 | 15.4% | (30.5%) | 84 | 73 | 15.4% |
Other expenses | (43) | (58) | (62) | 30.5% | 25.9% | (43) | (62) | 30.5% |
Other gains (losses) | (1) | (2) | (1) | (3.9%) | 78.3% | (1) | (1) | (3.9%) |
Financial cost | (97) | (101) | (108) | 10.7% | 4.7% | (97) | (108) | 10.7% |
Financial revenues | 9 | 9 | 11 | (18.0%) | (7.1%) | 9 | 11 | (18.0%) |
Share of profits of associates | 6 | (39) | (4) | 242.9% | 115.7% | 6 | (4) | 242.9% |
Foreign exchange differences | (7) | (4) | (31) | 78.1% | (81.4%) | (7) | (31) | 78.1% |
Other results | (9) | (8) | (4) | (125.3%) | (12.3%) | (9) | (4) | (125.3%) |
Non Operational income | (57) | (83) | (127) | 55.0% | 31.0% | (57) | (127) | 55.0% |
Income tax expense | (98) | (49) | (36) | (167.9%) | (100.0%) | (98) | (36) | (167.9%) |
Total profit | 251 | 132 | 12 | 2,021.2% | 90.6% | 251 | 12 | 2021.2% |
Profit attributable to controllers | 229 | 118 | 6 | 3,499.4% | 93.3% | 229 | 6 | 3,499.4% |
Profit attributable to minority | 22 | 13 | 5 | 305.5% | 66.6% | 22 | 5 | 305.5% |
EBIT | 406 | 264 | 176 | 131.1% | 54.0% | 406 | 176 | 131.1% |
Depreciation & Amortization, and adjustments | 216 | 235 | 204 | 6.0% | (8.0%) | 216 | 204 | 6.0% |
Fair value cost of timber harvested | 71 | 74 | 67 | 5.7% | (4.8%) | 71 | 67 | 5.7% |
EBITDA | 693 | 573 | 446 | 55.2% | 20.9% | 693 | 446 | 55.2% |
Figures in US$ million
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1Q21 / 4Q20. Net income rose US$111 million QoQ, explained by higher operating and non-operating income.
The forestry business had a 4.0% increase in EBITDA, due to higher pulp prices and a better performance of the wood product business.
The fuels business EBITDA increased 42.4% measured in US dollars, explained by an increase of 50.7% and 4.5% at Copec and Abastible, respectively.
Non-operatingincome increased US$26 million, because of a higher share of the earnings of associates and lower other expenses. That was partly offset by a decrease in other income.
EBITDA | |||
810 | |||
718 | 693 | ||
675 | |||
564 | 591 | 542 | 573 |
489 | 446 | 468 |
397 | ||
315 |
Net Income | |||||
335 | 308 | ||||
280 | |||||
221 | 229 | ||||
148 | 135 | 118 | |||
98 | |||||
22 | 6 | ||||
-32 | |||||
-206 |
Figures in US$ million
4
1Q 21 | 4Q 20 | 1Q 20 | 1Q21 / 1Q20 | 1Q21 / 4Q20 | Accum 21 | Accum 20 | Var 21 / 20 | |
EBITDA | ||||||||
Forestry | 365 | 351 | 215 | 69.8% | 4.0% | 365 | 215 | 69.8% |
Fuels | 319 | 224 | 227 | 40.8% | 42.4% | 319 | 227 | 40.8% |
Copec | 265 | 176 | 176 | 50.8% | 50.7% | 265 | 176 | 50.8% |
Abastible | 40 | 39 | 37 | 9.0% | 4.5% | 40 | 37 | 9.0% |
Sonacol | 13 | 9 | 14 | (1.7%) | 43.8% | 13 | 14 | (1.7%) |
Fishing | 12 | 3 | 9 | 44.3% | 362.0% | 12 | 9 | 44.3% |
Others | (4) | (5) | (4) | (0.3%) | 23.4% | (4) | (4) | 0.3% |
TOTAL | 693 | 573 | 446 | 55.2% | 20.9% | 693 | 446 | 55.2% |
CAPEX | ||||||||
Forestry | 340 | 457 | 445 | (23.7%) | (25.6%) | 340 | 445 | (23.7%) |
Fuels | 73 | 121 | 93 | (21.5%) | (39.7%) | 73 | 93 | (21.5%) |
Fishing | 4 | 4 | 1 | 215.0% | 112.8% | 4 | 1 | 215.0% |
Others | 41 | 30 | 45 | (9.7%) | 36.6% | 41 | 45 | (9.7%) |
TOTAL | 458 | 612 | 585 | (21.7%) | (25.1%) | 458 | 585 | (21.7%) |
EBITDA change by business (1Q 21 v/s 1Q 20) | |||||
(MMUS$) | |||||
92 | 4 | 0 | |||
150 | |||||
693 | |||||
446 | |||||
1Q 20 | Forestry | Fuels | Fishing | Others | 1Q 21 |
EBITDA change by business (1Q 21 v/s 4Q 20) | |||||
(MMUS$) | |||||
95 | 14 | 10 | 1 | ||
573 | 693 | ||||
4Q 20 | Fuels | Forestry | Fishing | Others | 1Q 21 |
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EC - Empresas Copec SA published this content on 28 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 May 2021 16:19:01 UTC.