UPDATE 1-Brazil's Fibria tops estimates on tax break, stable currency
(Adds market outlook, details of earnings)
SAO PAULO, July 23 (Reuters) - Brazil's Fibria Celulose SA , the world's largest wood pulp producer, beat earnings expectations on Wednesday as a more stable currency, tax breaks for exporters and lower debt-servicing costs helped reverse a year-earlier loss.
Profit rose sharply to 631 million reais ($285.5 million) in the second quarter from a loss of 593 million reais a year ago, beating an average estimate of 547 million reais in a Reuters survey of analysts.
Fibria has sold land and bought back bonds to reduce gross debt 15 percent over the past year to 8.46 billion reais, 95 percent of which is dollar-denominated. A currency swing had driven up its debt-servicing costs and wiped out 650 million reais of the company's earnings in the second quarter of 2013.
A tax incentive for exporters granted in June also boosted Fibria's bottom line by 568 million reais in the second quarter.
Earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, slipped 8 percent to 594 million reais, excluding one-time tax benefits, above an average estimate of 588 million reais.
Lower global pulp prices capped Fibria's revenue from April to June this year, which edged up 1 percent from a year earlier.
New production from rivals is likely to keep pressure on prices in coming months, although strong sales to China and recovering European demand should support the market, Fibria said in a securities filing.
Shares of Fibria rose 1.6 percent in Wednesday trading. ($1 = 2.21 Brazilian reais) (Reporting by Brad Haynes and Priscila Jordao; Editing by Meredith Mazzilli)
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