Empresas CMPC (CMPC) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached $1.888 billion, down 3% sequentially and 6% year-over-year, with higher pulp prices offset by lower volumes and declines in Biopackaging sales.

• EBITDA was $377 million (20.0% margin), down 5% quarter-over-quarter but up 31% year-over-year, with margin improvement driven by pulp.

• Net income totaled $125 million, a 40% sequential decline but flat year-over-year, impacted by lower insurance compensation and higher taxes.

• Free cash flow improved to a net outflow of $22 million, mainly due to lower dividend payments and a tax refund, marking a significant recovery from previous quarters.

Financial highlights

• Consolidated EBITDA margin was 20%, with pulp contributing 62%, Softys 32%, and Biopackaging 6%.

• Revenues decreased 6% year-over-year, mainly due to lower sales volumes, partially offset by higher pulp prices.

• Operating costs decreased 3% quarter-over-quarter and 14% year-over-year, representing 63% of revenues.

• Investments totaled $146 million, down 67% year-over-year.

• Free cash flow was negative at -$176 million in 2Q24.

Outlook and guidance

• Net debt to EBITDA ratio is expected to improve further, targeting below 3x by 2026 in preparation for the Natureza Project.

• Pulp market expected to stabilize as Chinese demand returns and global inventories remain below historical levels.

• Tissue and pulp volumes anticipated to normalize in H2 2024, with some recovery expected but no strong rebound.

• Ongoing focus on sustainability, cost control, and operational efficiency amid challenging market conditions.

• Forward-looking statements highlight risks from external uncertainties, especially those in Note 3 of the financial statements.