(04/28/2016) Paranapanema, Brazil’s largest copper producer, ended the first quarter of 2016 (1T16) with stable results and efficiency equivalent to the best global copper transformers. During the period, the company reported strong cash generation of R$ 377 million, sold 69,200 tons of products and earned net revenue of R $ 1.3 billion, up 9% compared to the first quarter of 2015 (1T15) . With the weakening of the internal market, Paranapanema maintained its commercial focus on exports, especially to China and Latin America, and reached 72% of sales to the foreign market, compared to 58% recorded in the whole year 2015.

The total indebtedness of the company fell 13% to R$ 1.9 billion. The Net Debt/Adjusted EBITDA ratio reached 2,09x, the best level in the last four quarters, down 30% in the Net Debt. The Company’s Adjusted EBITDA totaled R$ 91.2 million, with a margin of 6.9%, and net income was R$ 2.7 million, compared to R$ 74.2 million in 1T15, affected by the financial result.

To maintain compliance with its working capital needs, Paranapanema has been focusing efforts on preserving lines and releasing new sources of capital, in order to mitigate the effects of the current state of credit and decreasing appetite of the banking market shortage for lending and financing, which has very limited liquidity projection for the coming months. In this sense, the company maintained investments for maintenance of assets in the planned level; reduced the use of working capital by R$ 111.5 million, or 366% compared to the fourth quarter of 2015; and even considering the inflation of the period, reduced by 30% (R$ 13.7 million) recurrent costs. The company also continued the process of monetization of assets, such as compensation of R$ 17.2 million in tax credits and sales to be achieved in the medium to long term the land of ancient Capuava unit in Santo André (SP), the potential value of R$ 150 million.

“The combination of market and strict resource management allowed to deliver above average results in the intelligence of the Brazilian metallurgical industry, even in the face of an adverse economic scenario, with a drop in the availability of credit and the weakening of industrial GDP. This is proof of the success of our business plan, the Paranapanema 2018, which has allowed the Company to present stable and predictable results every quarter, for almost two years, “says the president of Paranapanema, Christophe Malik Akli.”We can say that our plan to become a competitive company Paranapanema globally has been achieved,” he adds.

Launched in 2014, Paranapanema in 2018 is a comprehensive overhauling business processes, industrial, financial and management that aims to bring greater operational efficiency, sustainability and predictability to business results and capital employed. From this work, the Company has defined new business strategies guided by the discipline in the use of capital, strong cost management work and the increased use of installed industrial capacity.

Throughout this year, in line with its commercial management matrix, Paranapanema will continue to develop new international markets such as India, which recently received a first shipment of our products. “As a dollarized revenue company, but actual costs, business strategy focused on the foreign market will ensure benefits due to the depreciation of the real, supported by our cash flow protection policy that mitigates the volatility of the currency,” concludes Akli.