Altri Group, through Caima, Celbi and Biotek, presented a total volume of cellulosic fibers produced of 562.5 thousand tons, a level slightly below the same period of the previous year (-1.5%) due to the scheduled stoppage of one of the industrial units (Biotek). In the second quarter, as a result of the same stoppage, production reached 282.2 thousand tons.

In terms of sales, the volume reached around 589 thousand tons, a slight decrease of 1.1% compared to the first six months of last year, with foreign markets absorbing 504.8 tons, 86% of the total.

The volume of production and sales, but mainly the context of rising prices in international markets, led total revenues, which include income other than fiber, to reach €521.7 million in the first half of 2022, a growth of 41.8% compared to the same period in 2021. In the second quarter, revenues grew 37.8% to €272.5 million.

EBITDA reached €130.8 million in the first half, an increase of 32.7%, while in the second quarter it reached €69.8 million. The EBITDA margin was 25.1%, -1.7 p.p. compared to the same period last year, being 25.6% in the second quarter, a drop of 7.6 p.p. compared to the same period of the previous year, reflecting the increase in costs recorded.

This performance is “achieved in a challenging environment of inflation of various variable costs, a reflection of disruptions in logistics chains, but exacerbated by the invasion of Ukraine by Russia”, says José Soares de Pina. “The context of a strong increase in energy and raw material prices, especially chemicals and wood, has limited the expansion of profitability and margins obtained by the Altri Group”, adds Altri's CEO.

Despite a favourable price environment for cellulosic fibers, the inflationary environment of several variable costs limited the evolution of the margin. Even so, the net income from the Altri Group's continued operations reached around €69.6 million in the first six months of 2022, an increase of 56.9% when compared to the same period last year. In the second quarter, profits amounted to €39.8 million, a growth of 23.6% compared to the same quarter of 2021.

Demand drives up cellulosic fiber prices

The global demand for cellulosic fibers showed a decrease of 0.8% until May 2022, with the demand for Hardwood Pulp decreasing by around 0.3% compared to the same period of 2021. This evolution is clearly influenced by China, which continues to show a decrease (-6.6%), largely explained by factors already identified in 2021 and that continue to restrict many of the economic relations with the Asian country.

However, in the remaining markets there is an increase in demand. The Asia and Pacific region, excluding China, shows increases in demand of +19% in Japan and +6.5% for the rest of Asia/Africa and +36% in Oceania. It is worth noting the stable dynamics in Western Europe (+3.3%), and one of the important factors to confirm the balance of demand and supply in the European market is the level of stocks in ports, which continues to decline monthly since September 2021, reaching an all-time low in April 2022.

In this context, prices have been rising. At the end of the second quarter, the price of BHKP pulp in Europe was at 1,350 USD/ton, after three consecutive increases of 50 USD/ton, announced for April, May and June. The strong demand that continues to be felt in the European market, combined with a low level of stocks, has already led to an additional announcement of a price increase of 30 USD/ton for July.

Decision on Galicia in the 1st half of 2023

In pursuit of the growth strategy, but also in being a company increasingly committed to sustainability, the Altri Group continues to invest. The total net investment made during the first half of the year amounted to 11.8 million euros, an increase of almost 60% compared to the same period in the previous year, which includes around 6.1 million euros related to the announced investment in the new Biomass for the Caima industrial unit.

Altri Group also continues to work on the Gama project, in Galicia, with the objective of announcing the final investment decision during the first half of 20223, after the announcement in April of the potential location in the Palas de Rei area, in province of Lugo, Autonomous Community of Galicia in Spain. We are currently working on the environmental impact project, the engineering design, economic feasibility, and financing structure of a project that could amount to more than €800 million.