Photo: copper scrap separation process

(11/12/2021) In the third quarter of 2021, Paranapanema advanced in the improvement of its strategies focused on cash flow management through cost efficiency and working capital optimization, in addition to the negotiation of debts with the company’s main creditors and the health care of its own and third-party employees because of the COVID-19 pandemic.

Following its business sustainability strategy, Paranapanema has been increasing the use of recyclable raw material in the production process this year. Thus, the company increased the use of these materials from 10.5% in 3Q20 to 27.5% in 3Q21. “The Company has been changing the way it produces, emphasizing the recycling of copper. Thus, we contribute to the environment and reduce the need for working capital”, comments Luiz Aguiar, Paranapanema’s CEO.

In another broad front of work, the negotiation of the Company’s debts is advancing towards its completion. Eight of the eleven creditors have already approved the restructuring in their credit committees, while the other three are in the final process in their respective committees.

Paranapanema reported Net Revenues of BRL1.2 billion in the third quarter of 2021 (3Q21), an increase of 44% compared to the same period of 2020. The participation of primary copper revenue within the product mix was 41.3%, providing a faster inventory turnover and a shorter cash generation cycle, one of the Company’s main objectives for the period.

Thus, the Cash Flow from operating activities was positive by BRL 8.9 million, an increase of BRL 84.7 million compared to the same period of 2020. In addition, the Free Cash balance was BRL 129.7 million in 3Q21, an increase of BRL 17.1 million compared to 2Q21.

To contribute to the positive result of the Cash Flow, we had a reduction in Selling, General & Administrative Expenses (SG&A) of BRL 2.4 million in 3Q21 compared to 3Q20, a reduction of 10%. These results reflect the actions taken to gain efficiency in working capital management, inventory optimization and the reduction in the receivable accounts term.

However, the premiums charged for the sale of primary copper are lower, impacting margins in the quarter, also affected by the low volume of by-products invoiced compared to the same period last year. Thus, strongly impacted by the effects of exchange rate variation on debt and other effects between provisions and other positions, the company reported a Net Loss of BRL 419.6 million. Excluding these effects from the result, there is an Adjusted Net Loss for the period of BRL 18.7 million.

About Paranapanema

Paranapanema S.A. is the only domestic producer of primary copper, responsible for the production and marketing of cathodes, rods, drawn wires, laminates, bars, tubes and connections made of copper and its alloys. The company closed the year of 2020 with revenues of BRL 4.3 billion, having exported its products to around 20 countries. The company was founded in 1961 and has been publicly traded since 1971, integrating B3’s Novo Mercado since 2012. Paranapanema has three industrial units: in Dias d’Ávila (BA) – Camaçari Industrial Hub, in Santo André (SP) and in Serra (ES) and generates about 2,000 direct jobs.

Press Contacts

Mayara Bertacini –  +55 11 99946-8291 | mayara.bertacini@paranapanema.com.br
Bruno Badari de Almeida – bruno.badari@paranapanema.com.br