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1Q10 Results1Q10 Results
May 13, 2010May 13, 2010
SCHEDULESCHEDULE
HIGHLIGHTSHIGHLIGHTS
RESULTSRESULTSRESULTSRESULTS
OUTLOOKOUTLOOK
2
HIGHLIGHTS
During the quarter ending on March 31st and April, 2010, there was the refund of tax
credit of IPI of fiscal years of 2006, 2007 e 2008, in the amount of R$ 16.1 million.
The company received R$ 15.9 million regarding the first installment of the loan,
ensured by German agent Euler Hermes Kreditversicherungs AG, which shall be allocated
to financing of the machine to be installed in the United States. The interest rate
contracted is LIBOR + 1.5% per year with biannual payments and the principal has two
grace years and 8 years for payment, with biannual amortizations.grace years and 8 years for payment, with biannual amortizations.
The company totalized net debt of R$ 170.5 million in 1Q10, a reduction of 32.7% in
comparison to that same period in the preceding year. It occurs especially due to
operating generation of cash and management of liabilities.
COGS was impacted by the increase of our main raw material, polypropylene, which
increased by 18.5% in global market. This increase in price of polypropylene arises from
temporary restriction of the offer of its main input, propene, and delay in the
commencement of operation of new petrochemical plants in Asia.
3
HIGHLIGHTSHIGHLIGHTS
RESULTSRESULTS
SCHEDULESCHEDULE
RESULTSRESULTS
OUTLOOKOUTLOOK
4
SALES VOLUME SALES VOLUME ((in thousands of tonsin thousands of tons))
20.3% increase in the volume of
nonwoven in comparison to 1Q09, the
latter still influenced by “global
crises”;18,7 17,8
1,2
1,2 0,9
15,9
19,9 18,7
5
4.9% reduction in comparison to
4Q09.
14,8 17,8
1Q09 4Q09 1Q10
Nonwovens Others
NET INCOME NET INCOME
NONWOVENS NONWOVENS DIVISION DIVISION (in millions of (in millions of ReaisReais))
In comparison to 1Q09, we registered
an increase by R$ 3.3 millions, equal to
3.3%;
Net Income had a reduction of R$ 7.798,2
109,1 101,5 Net Income had a reduction of R$ 7.7
millions, 7.0% related to the one
registered in 4Q09, arising from exchange
variation and lower volume registered in
1Q10.
6
98,2 109,1 101,5
1Q09 4Q09 1Q10
Reduction in absolute terms of 5.2%
in COGS, in comparison to 4Q09, is
due especially to the smaller
registered volume of sales;
In comparison to 4Q09, there was
COGS COGS (Cost Of Goods Sold)(Cost Of Goods Sold)
NONWOVENS NONWOVENS DIVISIONDIVISION
53,6
70,6 67,0
R$ 3,36 R$ 3,55 R$ 3,58
an increase in unit COGS, due to
adjustment of our main raw material
(Polypropylene), which has varied
about 15.0% during the first quarter
of 2010, minimized by direct man-
power, maintenance, electrical power
and other inputs).
7
R$ 3,36 R$ 3,55 R$ 3,58
1Q09 4Q09 1Q10
COGS (R$ thousand) Unitary COGS (R$)
EBITDA (R$ millions) EBITDA (R$ millions)
and EBITDA Margin (%) and EBITDA Margin (%)
27,8% reduction in EBITDA and 9,7
p.p. in EBITDA margin, in 1Q10 x
31,5 31,8
22,8
32,1%
29,2%
1Q09.
8
22,4%
1Q09 4Q09 1Q10
Ebitda Ebitda Margin (%)
Net Net Earnings Earnings (R$ millions) (R$ millions)
and Net Margin (%)and Net Margin (%)
Net Earnings in the quarters was
impacted by the raw material price,
exchange variation over exportations,
14,5
10,9
9
exchange variation over exportations,
non-recurring items and exchange
variation over financial expenses.
4,5 14,5%
9,5%
4,3%
1Q09 4Q09 1Q10
Net Earnings Net Margin (%)
CASH AND CASH EQUIVALENTS
(in millions of Reais)
Company cash has increased by R$ 17.4
millions, equal to 7.1%, in comparison to
1Q09, especially due to operating cash
generation;
In comparison to 4Q09, cash has
maintained itself stable.
10
246,5
265,2 264,0
1Q09 4Q09 1Q10
Net Debt of Company reduced 32.7%,
R$ 82.8 millions reduction, in comparison
to 1Q09, considering as highlights cash
operating generation, management of
taxes and exchange variation;
NET DEBT
(in millions of Reais)
In relation to 4Q09 the debt has
increased 11.3% due to exchange effect
and resources for machine financing in
the United States;
71% of indebtedness is based on local
currency and 29% in foreign currency.
11
253,3
153,2 170,5
1Q09 4Q09 1Q10
CASH & DEBTCASH & DEBT
Consolidated Net DebtConsolidated Net Debt
R$ (MM) 03/31/2009 03/31/2010Var 1Q10 /
1Q09
Total Debt
Short Term 41.4 132.9 221.0%
Long Term 458.4 301.6 -34.2%
Total 499.8 434.5 -13.1%
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Total 499.8 434.5 -13.1%
Cash 246.5 264.0 7.1%
Net Debt 253.3 170.5 -32.7%
Net Debt / Adjusted EBITDA 2.3 1.8 -21.7%
Shareholders' Equity 482.7 511.5 6.0%
HIGHLIGHTSHIGHLIGHTS
RESULTSRESULTS
SCHEDULESCHEDULE
RESULTSRESULTS
OUTLOOKOUTLOOK
13
The expectation for the next quarters of 2010 shall be of full occupation of
production capacity, with sale orders placed for such;
Company is working to reestablish its prices, and thus we have perspectives of
improvements in our operating margins, having as external pressure factors the raw
material price and R$/Dollar rate;
OUTLOOKOUTLOOK
The main purpose of investment of the Company this year, the plant in the United
Stated, is being developed within the schedule, in the operating point of view, on-going
works, as well as financing, disbursement of financing with Hermes insurance.
14
CEO: Hermínio V. S. de FreitasCEO: Hermínio V. S. de Freitas
CFO: Eduardo Feldmann Costa
IR : Gizele Rigoni
Tel: +55 (41) 3381-8673
Fax: +55 (41) 3283-5909
São José dos Pinhais – PR
www.providencia.com.br/ir
15
The words “believe”, “anticipate”, “expect”, “estimate”, “will”, “plan”, “may”, “intend”, “foresee”, “project” and other similar expressions indicate forward-looking
statements. These forward-looking statements involve uncertainties, risks and assumptions, since they include information related to our potential or assumed
future operating results, business strategy, financing plans, competitive position in the market, industry environment, potential growth opportunities and the
effects of future regulations and competition. In addition, forward-looking statements refer only to the date on which they were made and should not be taken as
a guarantee of future performance. Providência is under no obligation to update this presentation with new information and/or future events .