The first quarter of 2013 has shown a widespread slowdown in industrial output and consumption in Europe. The pulp and paper sector was not immune from this trend that resulted in reductions in orders and deliveries of paper.
Portucel Group recorded net earnings of €44.7m in Q1 2013, down 14,6% from the previous year. Operating profits came to €58.3m, down by 17.2% from Q1 2012. Sales however remained rather stable at €356.9m, which is a slight increase of 1.1% from last year. On the cost side, Portucel recorded negative trends in the cost of wood and softwood pulp as well as in electricity.
Portucel said the business environment in uncoated woodfree paper in Q1 was harsh with substantial reductions in consumption and order intake. Sales volumes in the first quarter declined by as much as 5% compared to the previous year, although paper output remained stable. The group sees the reasons for this development within the economic crisis in Europe, the group's main sales destination.
The trend in bleached eucalyptus kraft pulp (BEKP) was positive in Q1, despite expectations to the contrary, Portucel says in its quarterly report. Two price increases could be implemented with a third one due in May. Sales of BEKP increased by more than 4%. Rising prices in conjunction with volume growth led to significant growth in the value of pulp sales compared to Q1 2012, the group stated.
Portucel said, despite the increased supply of eucalyptus pulp and the apparent slowdown in the Chinese market in the first two months of the quarter in question, the pulp market has shown itself to be strong. According to Portucel, the question of whether the pulp market will remain strong will depend, as in previous years, on rising consumption in China.
As reported before, Portucel is still pursuing forestry trials in Mozambique. So far, results have been encouraging, the company said. The group is now preparing to expand the scale of its forestry operation in Mozambique.