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UPDATE 1-Fibria misses profit estimates due to bond buybacks
October 23, 2013 / 6:06 PM / 4 years ago

UPDATE 1-Fibria misses profit estimates due to bond buybacks

SAO PAULO, Oct 23 (Reuters) - Brazil’s Fibria Celulose SA missed profit estimates on Wednesday as the world’s largest producer of eucalyptus pulp brought down debt by buying back bonds from investors.

Fibria reported third-quarter net income of 57 million reais ($26.24 million) on Wednesday, up from a loss of 212 million reais a year earlier, but below the average forecast of 133 million reais in a Thomson Reuters survey of six analysts.

The repurchase of bonds maturing in 2020 and 2021 incurred financial expenses of 56 million reais but helped the company cut foreign debt to its lowest since it went public in 2009.

Fibria has been struggling for over a year to cut its cumbersome debt load, which has battered results as a volatile exchange rate drove up foreign debt-servicing costs.

The company’s gross debt, 95 percent of which is denominated in dollars, fell to 9.5 billion reais at the end of September.

Shares of Fibria lost 2 percent in Sao Paulo trading, retreating from a one-month high at Tuesday’s close.

The depreciation of Brazil’s currency, the real, has also boosted the competitiveness of Fibria’s exports. The currency effect combined with stronger pulp demand in China and the United States lifted revenue in reais by 18 percent from a year earlier, leading to record operating profit.

Excluding special items, earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, rose 33 percent to 762 million reais, in line with the average estimate of 761 million reais.

Gross debt minus cash holdings fell to three times EBITDA over the last twelve months.

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