Mar 22, 2015. /Lesprom Network/. Energía y Celulosa (Ence) has concluded the restructuring plan implemented after the electrical reform one year ahead of schedule, enabling the company to return to profits as of last November and increase its annualised EBITDA to nearly Euro 115 million. Thus, Ence concludes a difficult year in which it closed the mill in Huelva and regulatory reforms required provisions of Euro 172 million, resulting in profits of Euro -140.9 million in 2014.

As Ignacio de Colmenares, Vice Chairman and CEO of Ence, affirms, “Our company is experiencing rapid recovery following the impact of the electrical reform, thanks to the successful execution of the restructuring plan.” Key milestones in the plan’s implementation include the cessation of pulp production and cogeneration at Ence’s industrial complex in Huelva, which will boost the EBITDA by Euro 40 million, and the smooth progress of efficiency improvement programmes at the Navia and Pontevedra plants, that are generating savings of Euro 10 million/year, equating to cash cost reductions (unit cost of production) of Euro 11/tonne.

These improvement factors are compounded by the rebound of pulp prices –with consolidated levels of $749/t and hikes of $770/t announced– and the appreciation of the dollar which effects an increase in the company’s EBITDA equal to Euro 20 million for every 5% of appreciation in the US currency, in which much of the pulp industry’s operations are transacted.

The gradual implementation of efficiency plans has enabled Ence to cut the cash cost of its Navia and Pontevedra plants from Euro 390/t, as of 4Q 2013, to Euro 370/t in the same period of 2014, adjusted by the Huelva closure, with further reductions expected from the consolidation of investments undertaken and those planned for 2015.

Pulp sales totalled Euro 502 million, falling 18% as a result of the closure of the Huelva mill. Electricity sales reached Euro 171.9 million annually, down 26% year-on-year due to the 9% drop in average revenue per MWh sold and an 18% reduction in volumes from the previous period given the impact of regulatory changes.

Adjusted EBITDA reached Euro 60.5 million (-62%) as a result of decreased production and lower sales of pulp and electricity, while results from the period amounted to a net loss of Euro -140.9 million versus a net profit of Euro 9 million in 2013.

These losses include the negative impact of Euro 6.1 million for retroactive adjustments to 2013 electricity sales and Euro 36.8 million for provisions owing primarily to the deterioration of energy crops resulting from regulatory changes (non-recurring). They also include Euro 109 million in provisions resulting from the cessation of pulp production and cogeneration in Huelva.

Ence is one of the main European producers of eucalyptus pulp.