Empresas Copec (COPEC) Q2 2024 earnings summary

Executive summary

• EBITDA reached $768 million in 2Q24, up 78% year-over-year but down 9% sequentially, driven by strong forestry and energy performance.

• Net income rose significantly year-over-year to $288 million, with a 391.5% increase in net profit attributable to controllers, and improved sequentially.

• Net debt to EBITDA improved to 3.0x, down from 3.6x a year ago, within the preferred range, reflecting higher EBITDA and reduced net financial debt.

• Major milestones included a successful bond placement, asset sales in Brazil, Peru, and Ecuador, and a strategic acquisition in Europe.

• Sales reached $7.1 billion, up 3.4% year-over-year and nearly flat sequentially.

Financial highlights

• Forestry EBITDA was $421 million, up from $164 million in Q2 2023, mainly due to higher pulp prices, volumes, and lower costs.

• Pulp EBITDA surged 218% year-over-year to $320 million; wood products EBITDA was $125 million, down 18% year-over-year but up 9% sequentially.

• Energy segment (Copec & Terpel) EBITDA was $363 million, up 36.1% year-over-year; Abastible EBITDA was $49 million, up 11.3% year-over-year.

• CAPEX for 2024 is $898 million, with 70% allocated to forestry and 28% to energy.

• Operating cash flow for 1H24 was $908 million, up 86.6% year-over-year.

Outlook and guidance

• Pulp market in China is expected to remain volatile with downward price pressure; Europe is stable but cautious.

• No major maintenance expected in forestry for the rest of the year, leading to lower unit costs and higher production.

• S&P and Fitch reaffirmed credit ratings with stable outlooks, expecting debt ratios to remain around 2.5x through 2026.

• Market normalization in Chile and improved logistics are expected to favor wood product revenues in 3Q24.

• CapEx for 2025 will depend on project approvals, especially the Sucuriú project.