2010-2Q10-Empresas-CMPCs-Press-Release

Page 1

2Q10

Empresas CMPC S.A. Second Quarter 2010 Results st August 31 , 2010

First roll produced by the new tissue machine of the Altamira mill (Mexico) – August 2010

2Q10 in Brief

2

Income Statement Analysis

3

Balance Sheet Analysis

7

Relevant Events

8

Balance Sheet

9

Income Statement

10

Cash Flow Statement

11

Sale Volumes

12

“Since the 90’s, CMPC began an internationalization process, which has been accelerating during the last years. 90 years after its foundation, CMPC operates in 8 countries, generating over 14,700 direct jobs, contributing with the development of the communities where the Company operates, satisfying the needs of more than 20,000 direct customers over 50 countries.

All the above confirms CMPC’s long term business vision, which is focused on generating value through its traditional seal of innovation and prudence in all its business activities.”

Conference Call st Date: August 31 , 10:00 AM Eastern Time US Toll Free: (+1 800) 688 0796 International Dial: (+1 617) 614 4070 Password: 35775195


2Q10

2Q10 in Brief

During the quarter, CMPC registered an increase in its sales and EBITDA, when compared with those reached in the first quarter of the year. This was mainly explained by the recovery of the Company's operational activity, which was affected by the earthquake that hitted Chile in February 2010. It is important to highlight that as of June 30th, all CMPC's Chilean facilities were operating at normal conditions. The better results of the Company were mainly explained by the positive impact generated by the higher level of prices reached by the Pulp division, which registered a 21% and 19% increase in softwood and hardwood respectively. Nevertheless, this was partially offset by a decrease in pulp export volumes. On the other hand, the results of the Forestry business also showed a recovery during the quarter. This was mainly explained by the higher level of sales, as well as the lower costs reached during this period, in response to the higher efficiency reached by the business, as well as the better productivity and the lower freight costs.

CMPC’s consolidated sales for 2Q10 reached US$1,007 million, registering a 7% increase when compared to those of 1Q10. During the quarter, there were higher sale prices in all divisions. On the other hand, sale volumes increased in all business areas, except from Pulp and Paper Products. The latter is mainly explained by the seasonality of the fruit export business in Chile.

Consolidated EBITDA reached US$281 million during 2Q10, showing a 21% increase when compared to that of 1Q10. This higher EBITDA is mainly explained by the raise in CMPC's consolidated sales, as well as the lower direct costs registered during the quarter. The EBITDA margin reached 28%, three points higher than that of the previous quarter.

CMPC registered a Net Income of US$123 million during 2Q10; showing a 53% increase when compared to that of 1Q10. This was mainly explained by the higher level of EBITDA registered during the quarter.

CMPC’s net debt as of the end of 2Q10 stood at US$2,175 million, presenting a US$2 million increase when compared to that as of March 31st, 2010. It is important to highlight that the Company closed the quarter with US$565 million of cash.

Key Figures

2

US$ Million

2Q09

1Q10

2Q10

∆%Q/Q

∆%Y/Y

FY 2009

FY 2010

∆%Y/Y

Sales EBITDA EBITDA Margin Net Income

691 129 19% 28

938 233 25% 80

1,007 281 28% 123

7% 21% 3% 53%

46% 117% 9% 338%

1,390 269 19% 82

1,944 514 26% 203

40% 91% 7% 149%

CAPEX

187

244

121

-50%

-35%

244

365

50%

Total Assets Net Debt Market Capitalization

10,116 1,433 5,264

12,207 2,173 9,283

12,322 2,175 9,609

1% 0% 4%

22% 52% 83%

10,116 1,433 5,264

12,322 2,175 9,609

22% 52% 83%

Closing Exchange Rate Average Exchange Rate

531.76 557.48

524.46 525.13

547.19 531.68

4% 1%

3% -5%

531.76 578.64

547.19 528.405

3% -9%

Forestry

Pulp

Papers

Tissue

Paper Products


2Q10

Income Statement Analysis

Total revenues reached US$1,007 million during the quarter, a 7% higher when compared to those of 1Q10. During the quarter, there were higher prices in all business areas. It is important to highlight the increase registered in pulp prices, as a consequence of the low level of inventories abroad. Forestry prices also showed an increase. This was mainly explained by a higher domestic activity, as well as a raise in external demand. On the other hand, sale volumes were positively affected by the recovery of the Company's activity level, which was affected by the earthquake. Nevertheless, this was partially offset by the lower volumes reached by the Pulp and Paper Products businesses. With regard to pulp volumes, the decrease was mainly explained by the redirection of some shipments to Europe, as well as the lower levels of pulp inventories maintained by the Riograndense unit. The decrease in paper product’s volumes was mainly explained by the seasonality of the fruit export business in Chile.

Sales Breakdown Analysis to Third Parties

Total Revenues Evolution 1,007

938

= ∆ Volumes

= ∆ Price

+60

691

+22 +23

+5

+6

+7

+2

+6

-13

-49

1.007 938

2Q09

1Q10

Sales Forestry Ventas 1T10 forestal 1Q10 +29

2Q10

Pulp celulosa +11

Sales Tissue P. Papel Paper Ventas tissue 2T10 2Q10 Products +12 -7

Papers papeles +24

CMPC’s consolidated EBITDA reached US$281 million, 21% above than 1Q10’s EBITDA. This growth is mainly explained by the higher EBITDA of the Pulp, Forestry, Paper and Tissue divisions. Nevertheless, this was partly offset by a decrease in the EBITDA of the Paper Products division.

EBITDA Variation by Business

EBITDA Evolution 281 233

+0.5

+3

+26

281

-5 +23

130 233

2Q09

1Q10

EBITDA 1Q10

2Q10

Forestry

Pulp

Papers

Tissue

Paper Products

EBITDA 2Q10

Net Income during the quarter reached US$123 million, 53% higher than that of 1Q10. This increase was mainly explained by the higher level of EBITDA. All the above was partially offset by the inferior Net biological income, as well as the higher Price level restatement adjustments.

Net Income Evolution

Net Income Analysis

123

+48

80

+0

-11

+6

+1

-2

125

80

28

2Q09

Forestry

1Q10

Pulp

Net Income 1Q10

2Q10

Papers

EBITDA

Tissue

Depreciation & Stumpage

Net Biol. Income

Net Fin. Costs

Other Non Price Level Net Income Oper. Restatement 2Q10

Paper Products

3 3


2Q10

Income Statement Analysis Sales to Third Parties Breakdown by Destination FORESTAL

A breakdown of CMPC’s sales to third parties by destination during 2Q10 shows that 46% of the sales correspond to exports, 26% to the domestic market in Chile and 28% to domestic markets of foreign subsidiaries. During 2Q10, export sales increased their contribution to CMPC’s consolidated sales, when compared to that of 1Q10. This was mainly explained by the recovery in the level of exports after the earthquake that affected Chile on February, especially those of Pulp, Forestry and Papers.

Foreign Subsidiaries Sales 28%

Domestic Sales in Chile 26%

Export Sales 46%

CMPC’s sales breakdown to third parties by business for 2Q10 shows that the Tissue and Pulp businesses contributed both with 32% of total revenues, followed by Paper contributing with 17% of total sales. Finally, the Forestry and Paper Products divisions represented 11% and 8% of total revenues respectively. CMPC’s EBITDA breakdown by business for 2Q10 shows that the Forestry division experienced a sharp increase in its contribution to consolidated EBITDA. This was mainly explained by the raise in its sales, as well as the lower costs, in response to the higher level of efficiency in the handling of wood, as well as the better productivity and lower freight costs registered during the quarter. On the other hand, it is important to highlight the negative effects of the increase in pulp prices, in the costs of fiber of the Paper, Tissue and Paper Products businesses. During the quarter, Tissue’s EBITDA remained unchanged despite the increase registered in its sales. This was partially explained by the next start up of the Colombian and Mexican projects, which implied specific marketing and distribution costs to prepare the market for the entrance of the new capacity. Finally, Paper Products’ EBITDA decreased in two points its contribution to total EBITDA, mainly explained by the seasonality of the fruit export business in Chile. .

1Q10 Sales Breakdown by Business Area Paper Prod. 10%

2Q10 Sales Breakdown by Business Area Paper Prod. 8%

Forestry 9%

Tissue 33%

Forestry 11%

Tissue 32%

Pulp 33%

Pulp 32%

Papers 17%

Papers 16%

1Q10 EBITDA Breakdown by Business Area

2Q10 EBITDA Breakdown by Business Area

Paper Products Forestry 7% 1%

Tissue 14%

Tissue 17%

.

Paper Prod. 4%

Forestry 9%

Papers 11% Papers 12% Pulp 63% Pulp 62%

4

Forestry

Pulp

Papers

Tissue

Paper Products


2Q10

Income Statement Analysis

The Forestry and solid wood business registered a 36% increase in sales (+US$29 million) during this period when compared to those of 1Q10. This was mainly explained by a 7% increase in sale prices, as well as a 28% raise in sale volumes. It is important to note the sharp increase in the volumes sold of sawnwood (+66%), sawing logs (+10%), plywood (+7%), and remanufactured wood (+5%). All the above was partially offset by a 20% decrement in pulpwood volumes. During 2Q10, there was a recovery in the solid wood export volumes delivered to Middle East, Asia, Europe and North America. All the above was mainly explained by the higher activity level.

FORESTRY

∆% Sales: +36% ∆% Volumes: +7% ∆% Price: +28%

Pulp sales increased by 3% (+US$11 million) during 2Q10 when compared to those of 1Q10, which was mainly due to a 21% increase in CMPC’s pulp average effective price. Nevertheless, this was partially offset by a 14% reduction in sale volumes. Hardwood volumes decreased 27%, while those of softwood increased 20%. The diminution in hardwood volumes is mainly explained by the lower levels of pulp inventories maintained by the Riograndense unit, as well as the redirection of some shipments from Asia to Europe, which reduced in 43% the volumes delivered to that continent during 2Q10. On the other hand, the increase in softwood volumes is mainly explained by the fast recovery of the Pacifico and Laja mills’ activity after the earthquake. Average effective price reached CIF 845 US$/ton and CIF 796 US$/ton for softwood and hardwood respectively. During this period, the spread between both fibers reached CIF 49 US$/ton.

PULP

∆% Sales: +3% ∆% Volumes: -14% ∆% Price: +21%

Paper business during 2Q10 registered a 16% increase (+US$24 million) in consolidated sales, when compared to those of 1Q10. This was mainly explained by the higher prices and sale volumes reached during the quarter. It is important to note the positive effect of the recovery in the level of activity after the earthquake in all papers grades production.

PAPERS

A breakdown of the different paper grades in this business shows that newsprint volumes registered a 27% increase when compared to those of 1Q10. Additionally, prices raised by 2%, following the upward trend registered in foreign markets since January 2010. On the other hand, boxboard prices increased 2% when compared with those of 1Q10. Moreover, sale volumes were up by 17%. Finally, packaging paper sale volumes raised by 6% compared to those of the previous quarter. Average sale price increased 4% when compared to that of the previous quarter.

∆% Sales: +16% ∆% Volumes: +15% ∆% Price: +1% TISSUE

Tissue business, including operations in Chile, Argentina, Peru, Uruguay, Mexico, Colombia, Ecuador and Brazil, showed a 4% increase in sales (+US$12 million) during 2Q10, when compared to those of 1Q10. This was mainly explained by the higher production showed by foreign subsidiaries, especially those of Mexico and Colombia, as a consequence of the next start up of new projects in both markets. During the quarter, volumes of tissue paper products were up by 1%, whereas those of diapers and feminine care products increased by 6%. Finally, average sale price (measured in US Dollars) remained unchanged in the case of tissue paper; whereas those of diapers & feminine care products increased 9%, when compared to those of 1Q10.

∆% Total Sales: +4% ∆% Volumes: Paper:+1%/Diapers&FCP:+6% ∆% Price: Paper: 0%/Diapers&FCP:+9% PAPER PRODUCTS

Paper products business during 2Q10 registered a 7% decrease (-US$7 million) in sales compared to those of 1Q10. This decrement is mainly attributable to a 14% reduction in sale volumes. This is mainly due to the seasonality of the fruit export season in Chile, which meant a reduced demand for fruit boxes during this quarter. Because of this, demand for fruit boxes decreased by 15% when compared to that of 1Q10. On the other hand, molded pulp trays volumes were up by 9%, because of the higher export volumes of apples, as well as the higher domestic demand for eggs trays. Finally, paper bags volumes increased 6%. Average selling price recorded an increment of 7%, when compared to that of the previous quarter.

∆% Sales: -7% ∆% Volumes: -14% ∆% Price: +7%

Forestry

Pulp

Papers

Tissue

Paper Products

5


2Q10

Income Statement Analysis

Operating costs excluding depreciation, stumpage and decrease due to harvest amounted to US$596 million, 1% lower than those of 1Q10. At a consolidated level, Operating costs in 2Q10 were 59% of total sales, five points lower than that of 1Q10. This was mainly explained by the higher sales, as well as the lower direct costs registered during the quarter. Other operating expenses reached US$130 million, 29% higher than that of 1Q10. This was mainly explained by the raise in Distribution and Administration costs. This account represented 13% of total sales, two points higher than that recorded in 1Q10. Financial expenses during 2Q10 decreased 1% when compared with those of 1Q10. On the other hand, CMPC’s Financial Income registered a 33% increment when compared to that of 1Q10, totaling US$2 million. Moreover, during this period there were lower Share results in associated companies. Since October 2009, the relative effects of changes in the fair value of financial instruments including forwards, forwards investments related to synthetic swaps, cross currency swaps and swaps, different from those under hedge accounting, were reclassified from the Exchange rate differences account into the Other gains (losses) items. Based on the foregoing, the appreciation of the dollar against the Chilean peso had positive results during 2Q10, registering a US$6 million gain. Price level restatement is caused by the variation experienced by the balance sheet accounts registered in UF (or Unidades de Fomento). The US$8 million loss recorded during the quarter was primarily due to the positive variation of the UF (price inflation), applied to UF debts held by the company. Other gains (losses) includes sales of products that are not purely of the company business and other items such as losses not covered by insurance companies, donations, and the relative effects of changes in the fair value of financial instruments including forwards, forwards investments related to synthetic swaps, cross currency swaps and swaps, different from those under hedge accounting, among others. During this quarter, a US$2 million loss was recognized in this account. It is important to highlight that during 1Q10 there was a US$50 million discount in the "Other Gains (Losses)" account, because of the damage to fixed assets and inventories caused by the earthquake, after deducting an estimated compensation to be received by insurance companies. Income taxes for the period implied a US$51 million expense, registering an US$18 million increment when compared with that of the previous quarter.

6

Forestry

Pulp

Papers

Tissue

Paper Products


2Q10

Balance Sheet Analysis th

st

As of June 30 2010, Current assets registered a 6% increase when compared with those as of March 31 , 2010. This was mainly explained by an increase in both Operative receivables and Inventories accounts. On the other hand, the Cash and cash equivalents account showed a 15% diminution, as a consequence of the disbursements used for the payment of loans and dividends. On the other st hand, Non current assets remained stable when compared to those as of March 31 , 2010. st

Current liabilities were up by 14% when compared with those as of March 31 , 2010. This was mainly explained by the increment registered in the Operative receivables account. On the other hand, Non current liabilities presented a 3% decrease when compared st with those as of March 31 , 2010. th

CMPC’s financial debt stood at US$2,740 million as of June 30 2010, showing a US$94 million decrease when compared to that as st th of March 31 , 2010. On the other hand, CMPC’s net financial debt reached US$2,175 million as of June 30 2010, registering an st increase of US$2 million when compared to that as of March 31 , 2010. It is important to highlight that CMPC closed the quarter with US$565 million of cash. On the other hand, the Net financial debt/EBITDA ratio registered a QoQ variation from 3.0 to 2.5 times, mainly explain by the higher EBITDA generation. Moreover, the financial coverage ratio and the financial debt/tangible net worth ratio also showed a favorable financial evolution during the quarter, when compared to those observed in 1Q10. As of the end of 2Q10, 49% of CMPC´s debt was denominated in USD, 35% was denominated in Chilean pesos (or Unidades de Fomento) and the balance in other local currencies. On the other hand, 80% of CMPC’s total financial debt has a fixed interest rate, whereas the balance has a floating interest rate. th

Debt Breakdown as of June 30 , 2010 In Million US$ (i) (ii) (iii) (i) (ii) (iii)

2Q09

1Q10

2Q10

∆% QoQ ∆% YoY

Current Interest-bearing Liabilities Non Current Interest-bearing Liabilities Other Obligations Mark to Market of Derivatives Debt Instruments for Hedging Currencies and Interest Rates Net Hedging Current Liabilities Net Hedging Non Current Liabilities

449 1,613 0 (58) 0 5

443 2,487 (44) (42) (4) (5)

456 2,395 (44) (35) (10) (23)

Total Debt ( (i) + (ii) + (iii) + (iv) + (v) + (vi) )

2,009

2,834

576

662

Net Debt

1,433

2,173

2,175

0%

52%

Average Cost of Debt

4.6%

4.7%

4.6%

-0.1%

0.0%

Cash and Cash Equivalents

th

Amortization Schedule as of June 30 , 2010

3% -4% 0% -17% 159% 325%

1% 49% -39% -15780% -596%

2,740

-3%

36%

565

-15%

-2%

Financial Ratios Evolution 8.22x 6.69x

7.26x

500 270

341

365 266

237

194

153

91 2010

2011

2012

2013

2014

2015

2019

2027

2.34x

2.95x 2.45x

2030

0.32x 2Q09 Net Financial Debt / EBITDA

0.41x 0.40x 1Q10

2Q10 Financial Debt / Tangible Net Worth

Interest Coverage Ratio

Shareholders’ Equity presented a US$69 million increase when compared to that of 1Q10. This is mainly due to the higher Retained Earnings registered during the quarter.

Forestry

Pulp

Papers

Tissue

Paper Products

7


2Q10

Relevant Events

8

CMPC approved the second stage of the Santa Fe II mill expansion project: CMPC’s board approved in June the second stage of the Santa Fe II mill expansion project, which will enable the mill to reach a total capacity of 1.14 million tons of hardwood per year. Total investment is estimated at US$156 million. This new project should start operations in 1H12.

Empresas CMPC is the most admired company in the country for the last 15 years, according to the survey published nd by "La Segunda" newspaper: On July 22 , there was published a traditional local survey called: “The most respected Companies of the year”. This study showed very positive results for CMPC, in financial, environmental, social responsibility and labor climate tasks, among others. At the general ranking, Empresas CMPC obtained the first place in the most admired companies in Chile for the last 15 years. In addition, the Company obtained the first place in “Honesty and transparency ", the second place in “Seriousness and solvency” as well as in “Contributions in education, training and social assistance", among other results.

During August 2010, a new double width tissue paper machine started operations in Mexico: in August, the third tissue paper machine of the Altamira mill started operating. This machine, which implied a total investment of US$60 million, has a total production capacity of 50 thousand tons of tissue paper per year. As a result, the Altamira mill reached a total capacity of aproximally 90 thousand tons of tissue paper per year.

Forestry

Pulp

Papers

Tissue

Paper Products


2Q10

Consolidated Balance Sheet

2009 1Q09

Figures in Th. US$*

2Q09

2010 3Q09

4Q09

1Q10

2Q10

Current Assets Cash and Cash Equivalents Operative Receivables Inventories Biological Assets Tax Assets Other Current Assets

2,261,127 534,976 647,847 737,341 173,246 65,847 101,870

2,205,876 576,466 615,483 672,353 183,810 75,502 82,262

2,591,577 761,487 694,044 737,263 169,195 121,080 108,508

2,410,878 661,744 703,626 722,127 157,499 64,329 101,554

2,546,913 565,451 793,189 790,956 177,037 89,326 130,954

Non Current Assets Intangible Assets, Different from Goodwill Goodwill Property, Plant and Equipment, Net Biological Assets Deferred Tax Assets Other Non Current Assets

7,782,718 89,283 4,948,937 2,561,814 66,143 116,541

7,910,034 4,898 85,052 4,968,901 2,557,026 79,770 214,387

9,699,025 93,664 226,935 6,073,015 3,026,906 110,624 167,881

9,796,378 92,991 198,736 6,057,860 3,115,910 156,794 174,086

9,775,173 95,765 222,139 6,065,060 3,091,345 114,934 185,930

10,043,845

10,115,910

12,290,602

12,207,256

795,415 352,219 335,021 108,175

859,749 466,674 297,732 95,343

1,192,822 472,973 453,746 266,103

2,684,265 1,658,010 970,997 55,258

2,689,374 1,621,404 951,040 116,930

153,567

TOTAL ASSETS Current Liabilities Other Financial Liabilities Operative Liabilities Other Current Liabilities Non Current Liabilities Other Financial Liabilities Deferred Tax Liabilities Other Non Current Liabilities Non Controlling Participations Equity Attributable to the Owners of the Controller TOTAL LIABILITIES & SHAREHOLDERS' EQUITY

2Q10 3Q10

4Q10

QoQ

YoY

6%

15%

-15%

-2%

13%

29%

10%

18%

12%

-4%

39%

18%

29%

59%

0%

24%

3%

1855%

12%

-

0%

22%

-1%

21%

-27%

44%

7%

-13%

12,322,086

1%

22%

1,065,965 472,208 429,293 164,464

1,214,397 487,455 502,444 224,498

14%

41%

3,839,687 2,516,940 1,074,453 248,294

3,829,768 2,487,931 1,096,927 244,910

3,726,105 2,395,293 1,092,689 238,123

153,675

157,648

157,508

158,321

1%

3%

6,410,598

6,413,112

7,100,445

7,154,015

7,223,263

1%

13%

10,043,845

10,115,910

12,290,602

12,207,256

12,322,086

1%

22%

3%

4%

17%

69%

37%

135%

-3%

39%

-4%

48%

0%

15%

-3%

104%

* Balance Sheet numbers are based on CMPC's quarterly financial data, w hich is presented to the "Superintendencia de Valores y Seguros" (SVS) .

Forestry

Pulp

Papers

Tissue

Paper Products

9


2Q10

Consolidated Income Statement

2009 1Q09

Figures in Th. US$

2Q09

2010 3Q09

937,568 1,006,624 (603,701) (595,643)

2Q10 3Q10

4Q10

-

QoQ

YoY

0

7% -1%

46% 29%

23%

78%

0

29%

29%

-

Operating Margin

208,851

230,836

282,587

335,471

333,867

Other Operating Expenses (2)

(69,544)

(100,974)

(118,115)

(125,556)

(101,005)

(130,024)

0

EBITDA(3) EBITDA Margin (%)

139,307 20%

129,862 19%

164,472 20%

209,915 23%

232,862 25%

280,957 28%

#ยกDIV/0!

-

21% 12%

116% 49%

Depreciation and Stumpage Increase in Biological Assets due to Forests Growth and Price Effects Decrease in Biological Assets due to Harvest

(75,583) 49,105 (32,513)

(78,517) 38,318 (34,315)

(81,551) 38,318 (35,853)

(91,179) 54,815 (26,050)

(96,183) 56,335 (24,263)

(96,151) 72,061 (50,895)

0 38,318 (35,853)

0 54,815 (26,050)

0% 28% 110%

22% 88% 48%

80,316

55,348

85,385

147,501

168,750

205,973

2,465

28,766

22%

272%

(18,410) 3,289 2,968 (38,943) 9,372 (12,320) 27,121

(21,905) 2,812 6,805 (41,213) 1,940 (7,207) 31,541

(29,446) 1,968 3,486 17,719 2,702 (734) (17,638)

(33,850) 2,608 3,991 710 (3,061) (35,164) 40,528

(33,135) 1,450 3,750 1,930 (2,172) (27,467) (32,885)

(32,674) 1,936 2,244 5,894 (7,832) (1,535) (50,881)

-1% 33% -40% 205% 261% -94% 55%

49% -31% -67% -114% -504% -79% -261%

53,393

28,119

63,442

123,263

80,222

123,126

53%

338%

Net Income

914,770 (579,299)

2Q10

698,394 (489,543)

Financial Expenses Financial Income Share Results in Associated Companies Exchange Rate Differences Price Level Restatement Other Gains (Losses) Income Taxes

819,150 (536,563)

1Q10

Sales Operating Costs (1)

Operating Income

691,295 (460,459)

4Q09

410,981

0 -

-

0

0

0 0 0 0

0 0 0 0 0

2,465

28,766

(1) Operating Expenses are calculated as: Costs of Sales minus Stumpage minus Decrease in Biological Assets due to Havest minus Depreciation (2) Other Operating Expenses are calculated as: Distribution Costs plus Administration Expenses plus Other Functional Expenses (3) EBITDA is calculated as: Sales minus Operating Costs minus Other Operating Expenses

10

Forestry

Pulp

Papers

Tissue

Paper Products


2Q10

Consolidated Cash Flow Statement

2009 1T09

Figures in Th. US

Cash Flow from Operating Activities

2T09

2010 3T09

4T09

1T10

2T10

2Q10 3T10

4T10

ToT

AoA

89,755 0 0

187,695 0 0

179,015 0 0

177,622 0 0

-1%

-5%

53,393 (27,121) 65,664 0 29,571 (16,592) (2,968) 30,838 (29,606) (13,424) 0 0 (57,343) 0

28,120 (31,541) 66,201 0 31,038 (60,313) (6,805) 133,031 28,763 (799) 0 0 (167,206) 0

80,222 32,885 84,139 0 242 (32,072) (3,750) 78,923 (48,971) (12,603) 0 0 (215,501) 0

123,126 50,881 84,229 12,465 1,937 (127,848) (2,244) 139,340 (109,283) 5,019 0

53% 55% 0% 700% 299% -40% 77% 123% -140%

338% -261% 27% -94% 112% -67% 5% -480% -728%

(137,216) 0

-36%

-18%

0 0 (57,365) 0 (2,762) 0 2,784 0 0 269,672 0 0 361,840 141,485 503,325 (199,573) (16,213) (17,867) 0

(101,960) 276 (74,611) (10,130) 12,188 1,925 5,106 0 0 (3,777) 0 0 44,018 59,923 103,941 (60,181) (30,523) (17,014) 0

(78,000) 12,818 (165,702) 0 12,430 0 2,953 0 0 (44,530) 0 0 0 29,289 29,289 (37,848) (18,775) (17,196) 0

0 95 (66,516) (54,936) 8,491 5,408 1,496 (31,254) 0 (119,071) 0 0 0 69,935 69,935 (113,982) (32,551) (34,416) (8,057)

-100% -99% -60% -32% -

-100% -66% -11% -30% -

167%

3053%

139% 139% 201% 73% 100% -

-100% 17% -33% 89% 7% 102% -

Net Increase (Decrease) in Cash and Cash Equivalents Effects of Changes in Exchange Rates on Cash and Cash Equivalents Cash and Cash Equivalents at the Beginning of the Period

302,084 12,711 220,181

16,712 24,778 534,976

(81,016) (18,727) 761,487

(78,665) (17,629) 661,744

-3% -6% -13%

-571% -171% 24%

Cash and Cash Equivalents at the End of the Period

534,976

576,466

661,744

565,451

-15%

-2%

Net Income Income Taxes Adjustments Depreciation and Amortization Adjustments Provisions Adjustments Unrealized Exchange Losses Loss (Gain) from Fair Value Adjustments Adjustments for Undistributed Profits of Associates Other Non Cash Items Ajustments Working Capital Adjustments Income Tax Refund (Payment) Cash Flow from Investment Activities Payments to Acquire Subsidiaries or other Businesses Divestments in Property, Plants and Equipment Investments in Property, Plants and Equipment Investments in Other Long Term Assets Derivative Contracts, Options and Swap Charges Dividends Received Interests Received Other Entries (Egresses) of Cash Cash Flow from Financing Activities Proceeds form the Issuance of Short Term Debt Proceeds form the Issuance of Long Term Debt Total Proceeds form the Issuance of Debt Payments of Loans Dividends Paid Interest Paid Other Entries (Egresses) of Cash

Forestry

Pulp

Papers

Tissue

Paper Products

11


2Q10

Sale Volumes

Domestic Sales(1)

(Th. m3ssc)

Forestry and Wood Products Sawnwood, Remanufactured Wood & Plywood Pulp

(Th. Tons)

Packaging, Printing & Writing Paper, Newsprint and Boxboard (Th. Tons) Boxboard Newsprint Tissue Paper

(Th. Tons)

Paper Products

(Th. Tons) Corrugated Boxes

Exports

2Q10 ∆%Q/Q ∆%Y/Y

Total Sales

2Q09

1Q10

2Q10

2Q09

1Q10

2Q10

2Q09

1Q10

2Q10

459 0 66 0

636

618

138

210

82

138

210

654 0 261 0

774 0 209 0

828

70

195 0 195 0

11 0 59 13 10 0

24

34

353

105 69 25

131 79 38

416 0 188 81 60 0

446

87 17 5

405 0 129 68 50 0

422

84 13 9

189 82 34

91 0 53 38

112

114

1

70 49

1 0 6 3

0

82 58

5 5

5 2

92 0 59 41

386

7% 0% 40% 0% -13% 0%

27% 0% 12% 0% -7% 0%

218 96 43

15% 17% 27% 0%

16% 19% -28% 0%

113

114

87 63

74 51

1% 0% -14% -19%

24% 0% 26% 26%

292

(1) Co nsiders Chile and Fo reign Subsidiaries (2) The CTM P To ns pro duced by M elho ramento s were reclassified as P ulp

This document provides information about Empresas CMPC SA. In any case this constitutes a comprehensive analysis of the financial, production and sales situation of the company, so to evaluate whether to purchase or sell securities of the company, the investor must conduct its own independent analysis. In compliance with the applicable rules, Empresas CMPC SA. publishes this document on its Web site (www.cmpc.cl) and sends to the Superintendencia de Valores y Seguros, the financial statements of the company and its corresponding notes, which are available for consultation and review.

12

Forestry

Pulp

Papers

Tissue

Paper Products


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