Cast&Roll plant in Santo André (São Paulo), responsible for the production of flexible tubes

(03/05/2021) Paranapanema, the largest primary copper producer in Brazil, as well as several companies in domestic and international markets, faces challenges regarding COVID-19 pandemic with great effectiveness in its prevention actions. The Company focuses on ensuring health of its employees and third parties, generating cash flow through cost efficiency and working capital management, in addition to progress with its debts renegotiation with the company’s main creditors. It registered a Net Revenue of BRL 1.5 billion in 4Q20, an increase of 25% compared with the same period of the previous year, ending 2020 with BRL 4.3 billion, while 2019 registered BRL 5.2 billion.

The Company has been working hard in the management of fixed costs (including idleness) and, in 2020, registered a reduction of BRL 83 million, 14% compared with the previous year, as well as a reduction of sales, general and administrative expenses of BRL 21 million, a reduction of 17% compared with the previous year.

As a result, Paranapanema generated operating cash flow of BRL 133.4 million in 2020 and free cash flow of BRL 68.4 million in the period, an increase of BRL 7.7 million compared with 2019. Also, in 2020, it presented a net loss of BRL 861.6 million, strongly impacted by the non-cash effect of the exchange rate change, mainly on its foreign currency debt, which, if excluded, reverts to adjusted net income of BRL 79.9 million in the year.

“Generate a free cash flow higher than previous years during a global pandemic and, at the same time, renegotiate our debts with the need for alignment between 10 different creditors has been possible due to the engaged and resilient work of the entire Paranapanema team and the confidence of its customers, creditors and suppliers” – explains Luiz Aguiar, CEO of the Company.

The Company continues to work to equalize the profile of its financial debt. Since the first quarter of 2020, it has been dealing with its main financial creditors (essentially the same ones that participated in the renegotiation process in 2017) about the extension of its debt profile, in order to adjust to its future cash generation and need for investment.

About Paranapanema

Paranapanema S.A. is the only primary copper producer in Brazil, responsible for the production and commercialization of cathodes, rods, wires, laminates, bars, tubes and copper connections and their alloys. The company ended 2020 with revenue of BRL 4.3 billion and exported its products to approximately 20 countries. The company was founded in 1961 and has been publicly-held company since 1971, listed in B3’s Novo Mercado since 2012. It has three industrial units: Dias d’Ávila (Bahia), at Camaçari Industrial Pole, Santo André (São Paulo) and Serra (Espírito Santo), and has approximately 2 thousand direct employees.

Press contacts

Mayara Bertacini – + 55 11 99946-8291 | mayara.bertacini@paranapanema.com.br

Bruno Badari de Almeida – bruno.badari@paranapanema.com.br