The Navigator Company Q1 2019 Results
Output of pulp - 370 000 t, average sale price for the quarter - 991 USD/t (-2,2% vs Q12018). UWF sales - 353 000 t (-2% vs Q12018)
Highlights 1st Quarter 2019 (vs. Q1 2018)
The Navigator Company recorded turnover in the first quarter 2019 of € 442 million, up by 9.6% on the same quarter in 2018. With sales of € 300 million, the paper sector accounted for 71% of turnover, energy for 11% (€ 44 million), pulp more than 9% (€ 40 million), and tissue business around 8% (€ 33 million). The period was marked by upwards movement in prices for UWF paper and BEKP pulp in relation to the first quarter of 2018 and by growing sales volumes for pulp and tissue.
Growth in volume of pulp available for sale
Output of pulp in the first quarter of 2019 stood at approximately 370 thousand tons, 7% up on the same period in 2018, when the company was subject to limitations on output, due in particular to a number of stoppages in Setúbal. As a result, the quantity of pulp available for sale in 2019 was above that in the previous year, although in line with the first quarters of previous years, making it possible to record an increase in pulp sales of 17% to 62 thousand tons.
Over the course of the quarter, the benchmark sale price for pulp - BHKP PIX - in USD tended to fall, dropping at the end of March to 971 USD/ton, down almost 5.2% in relation to the year-end price of 1,024 USD/ton. The average sale price for the quarter was 991 USD/ton, as compared to 1,013 USD in the first quarter of 2018, representing a reduction of 2.2%. However, the evolution of the EUR/USD exchange rate meant that the benchmark pulp price in Euros behaved differently, and rose to an average price in 2019 of 872 €/ton, as compared to 824 €/ton in 2018. The Group's average price moved upwards over the period, above the PIX performance in Euros, when excluding off-grade pulp sales from the new capacity in Figueira da Foz mill. Pulp sales in value stood at around € 40 million, up by 22%.
Rising sale price for paper
In paper business, UWF sales totalled 353 thousand tons, 2% down on the same period in 2018, due essentially to production deviations that resulted from the adjustments still being made in heavyweight production on paper machine 3 in Setúbal, and to a 4 day production stoppage, as a result of the strike in January on paper machine 4 in Setúbal.
However, rising sale prices for paper permitted the Group to record turnover of € 300 million, up by 6% on the same quarter in 2018. In fact, the average benchmark price for UWF paper (A4 B-copy), was 8% higher in the first quarter than in the same period in 2018, and also rose over the course of the quarter. The Group's average price outperformed the index, driven by implementation of price rises over the course of 2018 and also in early 2019, in Europe (which remained throughout the quarter), and also by the favourable evolution of the EUR/USD exchange rate.