20 de marzo de 2014 / 13:23 / en 4 años

Copec profit undershoots market forecast as costs rise

SANTIAGO, March 20 (Reuters) - Chile’s Copec, the country’s biggest industrial producer, undershot market forecasts for fourth quarter and full year profit, weighed down by costs from plant stoppages and closures.

Net income for the three months to end-December was $86 million, the company reported late on Wednesday. That was well under both the $175 million it made a year ago and the $226 expected by the market, according to a Reuters poll.

The Santiago-based conglomerate has significant cellulose and wood pulp operations through its Arauco unit, as well as fuel distribution, electricity generation, mining and fishing businesses. It operates throughout the Americas.

Rising costs related to forestry plant stoppages and fishing plant closures ate into non-operating income, the company said, while a slide in operating income from the third quarter could be attributed to lower wood pulp sales as mills underwent maintenance and demand fell.

Lower margins in its fuel business and greater tax expenses also weighed.

The export-led Chilean economy grew at its slowest pace in nearly four years in the fourth quarter, while manufacturing output growth has been negative or anaemic for months.

Copec’s net income was $786 million for the year, almost double that of 2012 but below market forecasts of $900 million, according to the Reuters poll.

Arauco, one of the world’s biggest wood pulp companies, plans around $1 billion in capital expenditure over the next two years, it said last week.

The unit’s $2 billion Montes del Plata eucalyptus pulp mill, a joint venture in Uruguay with Stora Enso, was making its “best effort” to start up this month, being 98 percent complete as of February, Copec said alongside results.

“Although the fourth quarter results were disappointing, we reiterate our ‘buy’ recommendation,” said analysts at BanChile Inversiones.

The brokers cited the expected rise in production from Montes del Plata and a plywood plant, relatively low exposure to falling fiber prices and an expected positive performance in Copec’s fuel business in 2014.

Copec shares were down 1.4 percent to 7,040 pesos each on Thursday, underperforming the index and valuing the firm at around $16 billion.

Reporting by Rosalba O'Brien; Editing by Sofina Mirza-Reid

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