Empresas Copec (COPEC) Q3 2024 earnings summary

Executive summary

• EBITDA reached $760 million (up 27% year-over-year), with net income at $404 million, driven by strong forestry and energy performance and non-recurring asset sales.

• Consolidated sales were $7,120 million, up 0.5% year-over-year, with major projects including the Sucuriú pulp mill approval, Brazilian forestry asset sale, and new energy infrastructure investments.

• ESG initiatives advanced with the first green bond issuance and the launch of a sustainable energy subsidiary, targeting 20% of Abastible's EBITDA by 2028.

• Year-to-date profit attributable to controllers was $920 million, up 403.8% from the same period in 2023, mainly due to higher operating income in forestry and energy.

• Major acquisitions included Abastible’s €275 million purchase of Gasib in Spain and Portugal.

Financial highlights

• EBITDA of $760 million, up 27% year-over-year; net income of $404 million, both boosted by non-recurring items.

• Pulp EBITDA surged 135% year-over-year to $339 million; wood products EBITDA stable at $124 million; Mina Justa EBITDA reached $175 million.

• Abastible EBITDA increased 25% year-over-year to $60.6 million; Copec EBITDA grew 11% year-over-year to $211.4 million.

• Adjusted EBITDA for 3Q24 was $1,087 million, up 78.2% year-over-year, mainly due to the sale of forestry assets in Brazil.

• Net financial debt/EBITDA improved to 2.5x, with total financial debt at $2.2 billion and a well-balanced maturity schedule.

Outlook and guidance

• Pulp market in China may recover in 4Q24 due to economic measures, with hardwood prices stabilizing at $550-$560/ton and softwood at $770/ton.

• Europe expected to remain cautious, especially in printing and writing segments.

• Wood products face short-term oversupply in MDF but a positive trend is expected for 2025.

• Dividend payout ratio reduced from 40% to 30% for 2024–2026 to support Arauco’s capital needs.

• Abastible expects its new sustainable energy subsidiary to contribute 20% of EBITDA by 2028.