Votorantim swings to profit in Q2

Brazilian firm Votorantim Industrial's net income rose to 514mn reais (US$226mn) in Q2, from a net loss of 307mn reais in 2Q13 as a result of solid operating performance and improved results in its wood pulp company Fibria.

"Excluding non-recurring financial expenses of 484mn reais in connection with the tender offer [related to the liability management strategy to reduce exposure to US dollar-denominated debt], net income would have been 998mn reais in the quarter," the company said in its quarterly earnings release.

Net revenue rose to 6.87bn reais, up 7% from 6.397bn.

Ebitda gained 13% to 1.48bn reais, while Ebitda margin increased to 21.6% from 20.6%.

The metals business accounted for 24% of consolidated Ebitda, cement 58%, mining 10% and long steel 8%.

In the metals division, zinc sales volume remained stable at 178,000t in the quarter. Nickel sales volumes decreased 46%, due to the temporary shutdown of the Fortaleza de Minas plant.

Aluminum sales volume fell 24%, negatively impacted by lower demand from construction and transportation industries in Brazil.

"Zinc and aluminum made a positive contribution to the revenue increase, due to higher LME prices and the sale of surplus energy", the company said.

Long steel sales volume remained stable at 464,000t.

Steel segment Ebitda totaled 121mn reais, up 13% from 107mn reais.

Capex in 2Q14 totaled 511mn reais, with 25% earmarked for expansion projects and 75% going to maintenance, modernization, safety, health and the environment.

"Expansion capex remained focused on the development of cement production capacity in Brazil, which accounted for 84% of total [capex]," Votorantim said in the release.

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