Portuguese paper maker Navigator's Q4 profit slumps 39% on lower demand, prices
20/02/2024 19:34
By Sergio Goncalves
LISBON, Feb 20 (Reuters) - Portuguese pulp and paper
producer Navigator NVGR.LS on Tuesday reported a 39% slump in
fourth-quarter net profit, as declining demand and lower prices
knocked sales lower than a year earlier.
The company netted a profit of 74.2 million euros between
October and December, down from 122 million euros a year ago.
Navigator, which sells more than 80% of its output overseas
in as many as 130 countries, said its sales fell 23.3% in the
fourth quarter from a year ago to 492.7 million euros, but were
up 2% from the third quarter.
The company said in a statement that its paper sales fell 12%
from the fourth quarter of 2022 to 322,000 metric tons, but were
up 17% from the previous quarter.
European pulp and paper producers struggled with higher
costs, falling demand and customer destocking, which cut into
profits during 2023.
Navigator said that, in the paper segment, "order books are
expected to improve in the first quarter", in line with a trend
observed since September, while the crisis in the Suez Canal is
contributing to increased delivery times from mills to
distributors of cargo coming from Asia.
"Despite the current context of an economic slowdown and
extreme uncertainty, it is predictable that the upturn in
demand, the reduction of supply in Europe and the severe
pressure on costs will help reverse the downward course of paper
prices in Europe and in certain international markets," it said.
Earnings before interest, taxes, depreciation and
amortization (EBITDA) fell 32.2% to 125 million euros, while its
EBITDA margin, a measure of profitability, dropped to 25.4% in
the fourth quarter compared to 28.7% a year ago.
For the whole year, net profit fell 30% to 274.9 million
euros while, but was "still 29% higher than the average for the
past five years". Its EBITDA dropped 32% to 501.5 million euros.
(Reporting by Sergio Goncalves; Editing by David Gregorio)
((sergio.goncalves@thomsonreuters.com; +351213509204; Reuters
Messaging: sergio.goncalves.reuters.com@reuters.net))