Photo: quality analysis of copper products.

(07/30/2021) In the second quarter of 2021, the main targets of Paranapanema were to ensure health of its own employees and third parties due to the COVID-19 pandemic, management of cash flow by means of efficiency in costs and optimization of working capital, in addition to restructuring of debts with the company’s main creditors.

Paranapanema presented a Net Income of BRL 1.16 billion in the second quarter of 2021 (2Q21), an increase of 6.8% in relation to the same period of 2020. In that quarter, the metallurgical company had a better products sale mix, with expansion of sales of products with higher added value, and due to the contribution resulting from the increase of revenue of joint products.

Therefore, the adjusted EBITDA, which excludes the effects of LME (copper prices at the London Metal Exchange) and dollar in stock, OCI (Equity Valuation Adjustment), contingencies and other non-recurrent effects, it ended 2Q21 with BRL 22.3 million positive, a growth of BRL 66.7 million against 2Q20 – which represents a 150% increase.

Additionally, as a continuation of the cost optimization work and reduction of Selling, General & Administrative Expense (SG&A), Paranapanema presented in 2Q21 a 17.4% decrease in relation to 2Q20. So, the company recorded a Net Profit of BRL 208.9 million in the second quarter, positively affected by the national currency (Real BRL) valuation against the United States dollar, especially on its indebtedness.

Paranapanema has been increasing the use of recyclable raw material in the production process. The use ratio of these materials went from 9.1% in 2Q20 to 21.9% in 2Q21. Such strategic initiative helps preserving the environment and reduces the need of the company’s working capital.

The Company keeps on working to balance the profile of its financial indebtedness. Since the first quarter of 2020, it has been dealing with its main creditors (essentially those same that attended the restructuring process in 2017) the extension of its debt profile, in order to adjust to its future generation of cash and investment needs. In May, an important step was taken: Paranapanema signed a MOU (Memorandum of Non-Binding Understandings for Debts Restructuring), together with its main creditors, formalizing understandings with respect to the new debt restructuring process.

“The execution of the MOU with the creditors, a first step towards completion of the restructuring, the continuous discipline in costs and expenses and the increase of use of recycled raw material in the production process has been supporting our economic results. We expect that as soon as the debt restructuring is completed, we can increase our production volumes, so there can be a substantial improvement in generation of operational cash” – adds Luiz Aguiar, chief executive officer of Paranapanema.
About Paranapanema

Paranapanema S.A. is the only national producer of primary copper, responsible for producing and selling copper cathodes, rods, drawn wire cords, laminates, bars, pipes and connections and its alloys. The company ended the year 2020 with a revenue of BRL 4.3 billion, having exported its products to around 20 countries. The company was founded in 1961, being publicly held since 1971, forming part of B3’s Novo Mercado since 2012. It has three industrial units, in Camaçari’s Industrial Hub, in Dias D’Ávila (BA), in Santo André (SP) and Serra (ES) and generates around 2 thousand direct jobs.

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