Moreover, the recurrent and consolidated EBITDA increased 1 % and 3% up to Euro 25.40 and Euro 24.07 million, respectively, while EBIT stood at Euro 12.11 million, 10% more than the Euro 11.05 million registered in the 1Q last year.
Enrique Isidro, Europac Group CEO, explained that "the results of the company slightly improve those obtained during the same period in 2013 in a macroeconomic context characterised by economic weakness in the key markets and an energy reform in Spain that had an impact of Euro 3.52 billion in the 1Q."
In these circumstances, the company CEO underlined "the increase in net sales, the improvement of the margins from recycled paper and a slight recovery in the gross margins from the cardboard business line in all countries with regards to the last quarter of 2013, which have offset the impact of the energy reform compared to the 1Q 2013."
The waste management business line recorded an increase in volume of 14.1 % to reach 79,639 tons, which allowed to double widely the EBITDA in the first quarter of 2013 and increase integration level between recovered paper and recycled paper up to 38 %, compared to 34 % a year ago.
Regarding the Paper Division, improving the efficiency of the Viana do Castelo kraftliner paper mill allowed to increase the sales volume by 4.6 % up to 91,310 tonnes. In this context, the decline in sales prices in late 2013 hurt the behaviour of aggregate sales and EBITDA, which fell 3.4% and 4.5% respectively. The price difference between recycled and kraftliner paper is below the historical average, which allows to foresee a correction in that regard.
As for recycled paper, a margins improvement in all markets, which have increased from 3% to 14%, has resulted in an increase in EBITDA of the business, which recorded a figure of Euro 8.43 million, 384% more than in the 1Q 2013. Despite this increase, the margin is still below the historical average of the product.
Regarding the energy production line, activity related to the production of paper, the impact of the energy reform implemented in the Spanish market implied a loss of Euro 3.52 billion in the 1Q. In this scenario, since mid-February the energy production is being managed to minimise the impact of the reform. In the Portuguese market there was a decrease in the volume of production and sales because of the maintenance shutdown at the power plant in the Viana do Castelo factory.
Together, these two factors caused the EBITDA of the energy to fall by 59.0% registering Euro 3.04 million, compared to Euro 7.42 million in the 1Q 2013.
Finally, the corrugated board and packaging business line experienced a slight improvement in gross margin in all markets over the last quarter of 2013, but it is still below the levels of the 1Q of that year. The increase of the volume of production and sales is conditioned by the acquisition of Europac Cartonnerie de Bretagne.
This improvement in gross margin and the increase in volume, together with the continuation of a fixed costs control policy, have resulted in an improvement in the EBITDA margin of 6.5%.
