(02/08/2018) Paranapanema, largest Brazilian copper producer, registered in 4Q17 net revenue of R$ 1.134 billion. The result is 24% higher than that verified in equal period of 2016, 19% higher than that in 3Q17 and reverted the movement of fall verified in the last three quarters. In the year, Paranapanema registered net revenue of R$ 3.51 billion.

EBITDA of 4Q17 was of R$ 20.1 million, with 1.8% margin, the highest level of the last six quarters. The period was also marked by positive cash flow of R$ 118.2 million, which represented an improvement of R$ 438.5 million, compared to the same period last year. The combination of the increase of the financing with suppliers for acquisition of raw material and smaller average time limits in receiving the sales, allowed an expressive reduction in the need for working capital in relation to the previous quarter.

The company assured in the quarter the supply of copper concentrate for the program of 2018 production, assuring 100% of its supply with a TC/RC near the current benchmark.

For the direction of Paranapanema, the results obtained in the quarter reflect the operational resumption of the company after the process of strengthening of the capital structure that counted on capitalization of R$ 712 million and reshaping of the indebtedness: with lower financial costs, extension of time periods, in addition to the reduction of 22% in the net debt. The company also reduced its leverage, improved its liquidity and the relation of the net debt on net equity is at 1.9x.

According to Marcos Camara, president-director of Paranapanema, the reorganization will allow the company to resume its production, optimize the assets and gradually raise profitability. The volume of sales in 4Q17 was of 48.3 thousand tons, increase of 2% in relation to the same period of the previous year and 10% before 3Q17. In the accumulated total of the year, the commercialized volume was of 158.8 thousand tons, with 99.2 thousand tons of copper products and 59.6 thousand tons of primary copper.

“The efforts adopted by the current administration have also involved the rationalization of costs and expenditures, especially the administrative ones that were reduced in about 12% in relation to the previous exercise”, emphasizes the president-director.

Still in accordance with Camara, currently, Paranapanema is wholly dedicated to the reestablishment of its fundability, mainly for the financing of CAPEX planned for the year, which is of R$ 320 million. “This way, we hope to restore the full operational capacity, with reduction of the unit costs of production, generation of value for the shareholders and strengthening of trustworthiness for our customers”.

Memorandum of Understanding with Santander

Paranapanema signed, in the period, a Memorandum of Understanding (MoU), not-binding with Santander where the terms and conditions for the friendly closing of the litigation with the bank are established and come to closure.

About Paranapanema

Paranapanema is the largest non-integrated Brazilian refined copper and copper products (steel rods, drawn wires, laminates, bars, pipes, connections and their alloys).  The company has three industrial plants, being a unit of primary copper located in the city of Dias d’Ávila (BA), and two plants of copper products and its alloys, installed in Santo André (SP) and Serra (ES). It also relies on a distribution center in Rio de Janeiro, in the city of Itatiaia. With 2 thousand employees, Paranapanema has brands consecrated in the Brazilian market such as Eluma and Caraíba.

Information for the press

FSB Communication

GUTO DESCROVE /11 3165-9740 / 11 98758-8275

EDSON GUSHIKEN / 11 3165-9592 / 11 98171-5774

Email: paranapanema@fsb.com.br