July 25, 2017 / 1:15 PM / a year ago

UPDATE 1-Brazil's Fibria posts unexpected Q2 loss on FX; operating profit up

(Recasts throughout, adds details on earnings, share price move)

By Bruno Federowski

SAO PAULO, July 25 (Reuters) - Brazil’s Fibria Celulose SA , the world’s largest producer of eucalyptus pulp, posted an unexpected second-quarter loss on Tuesday as a weaker currency inflated the value of its debt, but higher pulp prices and strong demand lifted revenues.

Fibria lost a net 259 million reais ($82.3 million), missing the consensus estimate in a Thomson Reuters poll of analysts for a net profit of 106 million reais and reversing a net profit of 745 million reais the year before.

The loss owed mostly to a 451 million real financial charge related to the impact of the devaluation of the Brazilian currency, which raised the company’s net debt by 30 percent and increased its currency hedging cost.

Still, earnings before interest, tax, depreciation and amortization, a gauge of operating profit known as EBITDA, rose 16 percent to 1.071 billion reais when adjusted for non-recurring factors, beating analyst expectations.

Sales hit a record for the period at 1.534 million tonnes, driven by global demand for eucalyptus pulp, which combined with a series of price hikes lifted net revenue by 16 percent to 2.775 billion reais. Output was nearly flat at 1.330 million tonnes.

“Pulp prices consistently rose throughout the second quarter, mainly due to continuously strong demand, particularly in Asia,” Fibria said in a statement.

The company’s common shares rose 1.6 percent in early trading, outperforming a 0.3 percent increase by Brazil’s benchmark Bovespa stock index.

EBITDA accounted for 45 percent of net revenue when excluding the effect of a venture with Klabin SA, an increase of 2 percentage points. ($1 = 3.1454 reais) (Reporting by Bruno Federowski and Gabriela Mello; Writing by Bruno Federowski; Editing by Paul Simao)

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