Suzano Papel e Celulose: consolidated 1Q08 results

Transcription

1 Suzano Papel e Celulose: consolidated 1Q08 results Ebitda of R$ 341 million with Ebitda margin 35.2% São Paulo, April 23, 2007: Suzano Papel e Celulose (Bovespa: SUZB5), one of Latin America s largest integrated producers of pulp and paper, today reported consolidated results for first quarter 2008 (1Q08), giving consolidated operational and financial figures in Reais, by the Brazilian Corporate Law accounting method. Comparisons are between 4Q07 and 1Q07 unless otherwise stated. Highlights Pulp prices increased to US$ 800 / ton (CIF Europe) in February; with a further price increase of US$ 40 / ton in April. Producers hardwood pulp inventories in February: 34 days of shipments. New record in net sales: R$ 970 million. Record pulp sales volume: 348,000 tons. Net debt / Ebitda reduces to 3.48 at end-march. Pulp cash cost per ton (excluding cost of scheduled maintenance shutdown at Mucuri in March): R$ 452 / ton. Record output of paper and market pulp in the quarter: 634,000 tons. Mucuri Line 2 produced 167,000 tons with schedule maintenance shutdown in March. CONFERENCE CALL AND WEBCAST ON THESE RESULTS Portuguese: April 24th 9 a.m. (Brasília) Access: Password: SUZANO In English: April 24th 11 a.m. (Brasília) Access: Password: The results in this rele ase include Suza no s 50 % holdin g in Ripasa (inclu ding comparisons). Acquisition of the remain ing 50% stake in the Embu plant is taken into account only from March Financial indicators in R$ '000 4Q07 1Q08 1Q07 Net sales 963, , ,323 Ebitda 325, , ,630 Net income 92, , ,142 Sales volume ('000 tons) Ebitda margin 33.8% 35.2% 33.9% Net debt 4,285,486 4,225,119 4,084,521 Net debt / Ebitda (LTM) Net income per share Financial indicators in US$ tsd Net sales 539, , ,984 Ebitda 182, , ,248 Financial data for the Limeira a nd Cubatão p lants cease to be consolidated as from Novemb er Net debt 2,419,401 2,415,597 1,992,060 Notes: US$ conversion is by the average exchange rate for the period, in figures from the income statement, and by the end-of-period exchange rate, in figures from the balance sheet. Ebitda = operational profit, less (net financial revenue/expenses, equity income, depreciation and amortization), to the extent these are included in operational profit.

2 Summary: first quarter 2008 (1Q08) Pulp market favors further price increases Demand for pulp remained strong in 1QO8: Pulp and Paper Products Council (PPPC) estimates that w orld pulp shipments over the 12-month period up to February 2008 w as 5.0% (1,951,000 tons) higher y ear-on-year, led by China, w hich demanded 956,000 tons more than in the 12 months a y ear before. The demand for eucalyptus pulp on the same comparison w as 21.6% higher (1,958,000 tons). Constraints on supply of market pulp continued. The most important w ere the reduction of av ailability of w ood for chips in Indonesia and Europe, limiting the supply of hardw ood pulp from those regions. Operational problems at other pulp producers contributed to the reduction. In this scenario, new capacity coming on line is being fully absorbed. World pulp stocks increased slightly during the quarter, closing February still below their normal levels, w ith an av erage of 32 day s (34 days for short fiber, 31 for long fiber) Heated demand and limited supply resulted in further increases in prices of pulp in the international market. Eucaly ptus pulp CIF Northern Europe reached US$800 / ton in February 2008, its highest price since February The US$20 increase was also implemented in full in North America, where the price reached US$825 / ton. In Asia the increase was greater, US$30 / ton, evidencing the need for fiber in that region due to high economic grow th and new paper production capacity coming into operation. The list price of eucaly ptus pulp delivered to Asia increased to US$750 / ton. A further increase in prices was announced in March 2008, and is being implemented in April. Increases of US$40 / ton in Europe and US$30 / ton in North America and Asia are already in place. List prices of pulp, last day of period (US$/ton) Market pulp list prices 1Q07 2Q07 3Q07 4Q07 1Q08 apr/08 North America Europe Asia The av erage price of softw ood pulp reached US$920/ ton (CIF Europe) at the end of the quar ter, 4.5% up from the end of December and this w as a factor in the grow th of demand for eucaly ptus pulp, as its use has ex panded in all paper production segments. The spread betw een the prices of long fiber and short fiber pulp continued to be high ov er the quarter, around US$80/ton, indicating sustaining of prices and potential grow th for eucalyptus pulp. Av erage prices in US dollars for transactions in 1QO8 w ere higher than in the prev ious quarter. Ev en w ith the appreciation in the Brazilian Real against the dollar in the period there w ere increases in prices in Reais in both the domestic and ex port markets, averaging approx imately 2%. Positive growth outlook in Brazilian consumption of paper and cartonboard Brazilian demand for paper and cartonboard w as stronger in 1Q08 than in 1Q07. Brazilian GDP and industrial activ ity hav e helped increase per capita consumption of both. According to figures from Bracelpa (Brazilian Paper Manufacturers Association) and Secex (Brazilian gov ernment Foreign Trade Department), domestic consumption of cartonboard and printing and w riting papers w ere betw een 7% and 8% higher, respectiv ely, than in 1Q07, led by grow th in the packaging, promotional printing and consumption market segments. 2/17

3 According to sector data, in 1Q08 Brazil exported approx imately 36% of its production of printing and w riting paper and 30% of its output of cartonboard, and has sufficient installed capacity to meet the grow th in domestic demand. How ever, the appreciation of the BRL, against the US dollar stimulates imports from countries with ex cessive supply, changing the prev ious relationship betw een local supply and demand, pressuring prices dow nw ard. Imports of printing and w riting papers w ere approx imately 20,000 tons higher in 1Q08 than 1Q07, and imports of cartonboard w ere approx imately 5,000 tons higher, amounting respectiv ely to 16% and 9% of total Brazilian consumption of those products. In the interna tional scenario there w ere demand pressures in the main consumer markets, mainly due to slow economic grow th. In North America, one of the most important consuming regions, RISI ex pects a reduction of demand for uncoated papers (UWF) of be tw een 1% and 2% this quarter, accompanied by reductions in local production capacity, caused by increased costs of w ood, energy and transport and this has led to higher prices in the region. In Western Europe consumption is expected to stagnate and price pressure is expected from excessiv e local supply w ith the strong Euro making exports less competitiv e and the market being besieged by Asian products. In this scenario, new inv estments in capacity hav e come mainly from the dev eloping regions. According to EMGE, reductions of capacity in North America and Europe have more than offset the grow th of supply in the dev eloping regions, so that global grow th in supply has been minimal. Our total sales of paper in the quarter w ere 271,000 tons, 1.8% higher than in 1Q07, in spite of the changes in the asset base reflecting our div estments of the Limeira and Cubatão facilities and the acquisition of the remaining 50% of the Embu plant. Sales to the domestic market w ere 54% of total sales in the quarter, compared to 59% in 4Q07 and 56% in 1Q07. Our domestic paper prices were 2.2% lower, in Reais, than in the prev ious quarter (4Q07) w hile export prices of paper w ere an av erage US$90 / ton higher than in 1Q07. In Europe, prices reached US$1031 / ton (uncoated, reels, CIF), a spread of US$231 / ton ov er the pulp price or US$15 / ton more than the historic av erage spread for the last 10 years. High volume of pulp increases Suzano s results In 1Q08 Suzano had net sales rev enue of R$ million, on sales of 270,700 tons of paper and 348,000 tons of pulp. Cash flow, measured as Adjusted Ebitda, w as R$ million, w ith Ebitda margin of 35.2%, 1.3 percentage points more than in 4Q07 and 1.4 percentage points more than in 1Q07. The margin w as negativ ely affected by the maintenance shutdow n in March at Mucuri, and depreciation of the Real. The average cost of product sold was R$ 1,071 / ton, 0.7% more than in 4Q07, and 10.6% less than in 1Q07. Higher cash flow and lower investments led a reduction at net debt for 3.48 times Ebitda at the end of March. Business environment Sev eral factors sustained the uncertainty and v olatility that has ex isted since the second quarter of 2007: stress in the financial markets, additional news on slowing of the US economy, new record oil prices but these stresses in the financial markets had little consistent effect on the real economy. While commodity prices remained high in sev eral markets, the US dollar depreciated further against other currencies and margins continued to be pressured by the appreciating Real. The US dollar closed the quarter at R$ 1.75 / US$, and av erages R$ 1.74 / US$ in the quarter, a rate 2.6 % stronger than the av erage for 4Q07 and 17.5% stronger than the av erage for 1Q07. Fx rate, R$ / US$ 4Q07 1Q08 1Q07 Start of period End of period Average Variation -3.7% -1.2% -4.1% Average Fx variation -6.9% -2.6% -2.0% 3/17

4 (Calculations of variations use exchange rates to 4 decimal points.) Source: Brazilian Central Bank. Net sales Export market 57.1% Net Sales 1Q08 R$ 969,7 million Domestic market 42.9% Suzano s net sales rev enue in 1Q08 w as R$ million, 0.6% higher than in 4Q07 and 19.8% higher than in 1Q07. The amount is ex plained by the increase in output o f market pulp. Our average pulp sale price was R$ 1,171 / ton, 1.9% higher than in 4Q07 also contributing to the increase in rev enue. At the same time, the appreciation of the Real, and the higher percentage of sales of paper in ex ports, slightly offset tha t positiv e effect. Our av erage sale price of papers w as R$ 2,077 / ton in 1Q08, 3.6% less than in 4Q07, and 5.5% less than in 1Q07. Breakdown of net sales 1Q08 x 4Q08 x 1Q07 The increases in pulp prices and the startup of the new line at Mucuri increased the proportion of Suzano s net rev enue prov ided by pulp to 42%. Reflecting this, the percentage of rev enue coming from sales of paper w as reduced from 73% at the end of 2007 to 58% in the first quarter of Q08 38% 42% 14% 7% 4Q07 42% 35% 15% 8% 1Q07 46% 27% 18% 9% 0% 20% Uncoated P&W 40% Pulp 60% 80% Paperboard 100% Coated 4/17

5 Sales of paper and pulp 4Q07 1Q08 1Q07 R$ ' 000 '000 tons R$ '000 '000 tons R$ '000 '000 tons Pulp 60, , , Coated P&W Paper 63, , , Paperboard 114, , , Uncoated P&W Paper 238, , , Domestic market 476, , , Pulp 277, , , Coated P&W Paper 13, , , Paperboard 31, , , Uncoated P&W Paper 163, , , Export market 485, , , Pulp 337, , , Coated P&W Paper 76, , , Paperboard 145, , , Uncoated P&W Paper 402, , , Total 961, , , Note: Revenues from Other products (scrap, and IT and office materials), of R$ 2.1 million in 4Q07; (zero in 1Q08); and R$ 12.9 million in 1Q07, are not included in the table above. Pulp business unit Pulp Sales volume (thousand tons) Q07 1Q08 1Q07 Domestic market Export market Pulp net sales (R$ million) Q07 1Q08 1Q07 In 1Q08 w e sold 348,000 tons of pulp, 18.5% more than in 4Q07 and 100.3% more than in 1Q07. The difference comes from production and sales from Line 2 at Mucuri. Heated demand acted in fav or of absorption of all of our new capacity and our inv entories are lower than their normal lev els. Our net sales rev enue from pulp w as a record in 1Q08, at R$ million. This w as 42.0% of our total sales rev enue, 20.7% more in total than in 4Q07, and 92.0% more than in 1Q07. The av erage net sale price in US dollars in 1Q08 w as US$673 / ton, 4.5% more than in 4Q07, and 16.2% more than in 1Q07. Due to appreciation of BRL, our net price in Reais in 1Q08 w as 4.2% low er than in 1Q07, in spite of the increase in the European list price, of US$120/ ton. How ev er, in comparison to 4Q07, the net price in Reais w as 1.5% higher in the ex port market, and 3.2% higher in the domestic market. Domestic market Export market 5/17

6 Ex ports prov ided 82.3% of our v olume of pulp sold in 1Q08. Our net sale price of pulp in the ex port market w as US$681 / ton in 1Q08, which compares w ith US$655 / ton in 4Q07 and US$588 / ton in 1Q07. With the startup of Line 2 at Mucuri, sales to Asia increased as percentage of our total sales, reflecting the increased demand from China. In v olume terms, our sales to North America were 42% higher y ear-on-y ear, sales to Europe 91% higher, and sales to Asia 175% higher y ear-on-y ear. Pulp Exports 1Q08 (participation in sales volume) Pulp Exports 1Q07 (sales volume) North America 8% Latin America 1% North America 11% Latin America 4% Asia 38% Euro pe 53% Asia 29% Europe 56% Paper business unit Sales of the Limeira and Cub atão plan ts redu ced domestic pap er sales volume Our sales rev enue from paper in 1Q08 w as R$ 562 million, 9.9% low er than in 4Q07 and 3.8% lower than in 1Q07. This, in part, reflects the appreciation of the Real in the period, and the seasonal fashion for the quarter w hich is historically averages 22% of the y ear s sales, but it also reflects the sale of our Cubatão and Limeira plants resulting in our total output of papers being 12,000 tons low er than in 1Q07. This was howev er partially offset by the acquisition of the other 50% of the Embu plant, adding some 4,000 tons in the quarter. Our sales of printing and w riting papers in the quarter, at 210,000 tons 6% more than in 1Q07 were 78% of our total rev enue from papers, in spite of the sale of the stake in the Cubatão unit. Sales of printing and w riting paper are 73% of our total domestic market paper sales. Our sales of uncoated papers w ere 6.4% higher by volume, and our sales of coated papers w ere 2.8% higher. Av erage prices of uncoated papers in Reais w as 6.9% low er than in 1Q07, and av erage prices of coated papers were 12% lower. Sales of cartonboard w ere 10% lower than in 1Q07. This fall w as localized in the domestic market, w hich provided 63% of our sales of cartonboard. Av erage prices w ere 2.6% higher. Paper sales volume (thousand tons) Q07 1Q08 1Q07 Domestic market Export market Paper Net Sales (R$ million) Q07 1Q08 1Q07 Domestic market Export market 6/17

7 Dom estic m arket In this quarter, the domestic market grew more than ex pected. According to Bracelpa, demand for uncoated papers was approx imately 5% higher than in 1Q07, demand for cut size w as 10% higher, and for coated papers 12% high er. The increase is attributed mainly to the grow th of the economy. Some parts of the printing and w riting paper market in Brazil stood out more than others: there can be considerable v ariations, as the market includes v ery distinct segments: mailing paper, accounts, bank statements; notebooks; and cut sizes, and with the back to school season there w as strong promotional activ ity in that segment. Demand for cartonboard, w hich correlates closely with the packaging market, was 7% higher y ear-on-year. We continued to be the market leader in printing and w riting papers, in w hich our domestic sales were 4% higher y earon-y ear. Volume of uncoated papers w as 8.6% higher than 1Q07, while sales of coated papers, w hich are more affected by competition from imports, w ere 3,000 tons, or 12%, lower year-on-y ear. Uncoated prices w ere 2.5% lower than in 4Q07 and 3.4% low er than in 1Q07. In spite of the increase in domestic Brazilian demand for cartonboard, we lost market share due to the increase of imports and the startup of operation of new production capacity in the Brazilian market. At the same time w e selected the markets we operate in more closely, and achiev ed av erage prices 6% higher than in 1Q07. The export m arket Paper Exports 1Q08 (sales volume) North America 20% Other markets 15% Latin America 40% Europe 25% Our paper ex ports in 1Q08, at 125,000 tons, w ere 5% higher than in 4Q0 7 and 7% higher than in 1Q07. The av erage price, in US dollars, w as 10% higher than in 1Q07, and 1% higher than in 4Q07 par tially offsetting the e ffect o f changes in the exchange rate in the period. Latin America continued to be our main ex port destination, w ith 40% o f v olume. The Latin American market has been strong, w ith positiv e demand grow th betw een 3% and 4%, and has absorbed some price increases. In aggregate w ith Brazil, the region absorbed some 75% of our sales. Sales to the dev eloped markets (Europe and North America) hav e been grow ing these tw o markets prov ided 45% of our ex ports in 1Q08, compared to 42% in 1Q07. Not only v olume, but prices in US dollars were also higher than last y ear. Price increases of betw een 8% and 19% w ere achiev ed, for all the product lines, in comparison to 1Q07 but in Reais, prices were 5% low er year-on-y ear due to the appreciation of the Brazilian currency. 7/17

8 Production and costs Consolidated production (in thousand tons) 4Q07 1Q08 1Q07 Production Market pulp Coated P&W paper Paperboard Uncoated P&W paper Our total production in 1Q08 was 634,400 tons: 351,700 tons of market pulp and 282,600 tons of paper. Cash production cost of market pulp at Mucuri in 1Q08, ex cluding the cost of standing timber and the cost of the scheduled shutdow n for maintenance, w as R$ 452 / ton. The shutdow n represented costs of R$ 36 / ton, bringing the cash cost to R$ 488 / ton, or 0.2% less than in 4Q07, and 4.9% higher than in 1Q07. Our av erage unit cost of product sold in 1Q08 w as R$ 1,071 / ton, compared to R$ 1,064 / ton in 4Q07, or 0.7% higher and 1,198 / ton in 1Q07, or 10.6% lower. Operational expenses Our selling expenses totaled R$ 42.6 million in 1Q08, 17.8% less than in 4Q07 and 1.2% less than in 1Q07. Ev en with the increase in volume sold we succeeded in reducing selling ex penses due to the low er expenses on serv ices, and renegotiation of the logistics contracts, in Administrative expenses totaled R$ 59.6 million in the quar ter, 19.0% less than in 4Q07 and 3.9% more than in 1Q07. The positiv e comparison to 1Q07 mainly reflects the ex pense of employ ees salary increases and profit sharing. Other operational revenues in the quarter w ere R$ 23.8 million, mainly made up of the gain on sale of energy, and recognition of an amount to be received from suppliers related to operational performance of equipment w ithin stipulated time period in the Mucuri project. Ebitda (R$ '000) 4Q07 1Q08 1Q07 EBIT 218, , ,720 Depreciation / Depletion / Amortization 107, ,415 85,910 EBITDA 325, , ,630 Gross Profit / Net Sales 35.6% 31.7% 34.9% EBITDA / Net Sales 33.8% 35.2% 33.9% Net Debt / EBITDA (LTM) Our cash flow, measured as Adjusted Ebitda, in 1Q08 w as a record, at R$ million, with margin of 35.2% 4.7% more than in 4Q07, and 24.2% higher than in first quar ter Ebitda in dollars in 1Q08 w as US$196.3 million, 7.4% higher than in 4Q07, and 50.7% higher than in 1Q07. Main positiv e factors affecting Ebitda in the quarter w ere: (i) Increase in pulp prices, in Reais, from prev ious quarter. 8/17

9 (ii) Higher v olume of pulp sales. (iii) Increase in prices of paper in the ex port market in dollars. (iv ) Increase in other operational revenues. These were partly offset by : (i) Increase in COGS due to the general maintenance stoppage at Mucuri. (ii) Appreciation of the Real against the US dollar. (iii) Papers representing a higher percentage of total v olume in the ex port market. 33.9% 34.0% 32.7% 33.8% 35.2% Q07 2Q07 3Q07 4Q07 1Q 08 EBITDA - US$ million EBITDA margin Results (R$ '000) 4Q07 1Q08 1Q07 Net sales Cost of goods sold ( ) ( ) ( ) Gross profit Selling expenses (51.766) (42.559) (43.061) General and administrative expenses (73.567) (59.558) (57.306) Financial expenses (86.871) (59.599) (72.139) Financial revenue Equity pickup in subsidiaries and affiliates 209 (277) 912 Amortization of goodwill (19.053) (19.761) (20.989) Other operating income, net Operating profit before monetary variation Net monetary and exchange rate variation Operating Profit Non operating income (expenses), net ( ) (1.728) (90) Income and Social Contribution taxes (27.096) (54.085) (95.372) Net income for the period /17

10 Net incom e Our net income in 1Q08 was R$ million, 38.6% more than in 4Q07, and 21.2% more than in 1Q07. As well as the operational factors affecting adjusted Ebitda, other factors affecting net income w ere: (i) (ii) Positiv e net monetary and FX v ariations, of R$ 6.8 million in the quarter. These arise from the ex change rate v ariation in 1Q08 being 1.2% negativ e from the beginning to the end of the quarter. Net financial expenses of R$ 31.0 million. In 4Q07 w e posted net financial expenses of R$ 55.5 million, and in 1Q07, R$ 35.8 million. This reflects a gain on sw ap contracts to hedge FX exposure, and the ending of the CPMF tax. (iii) The effectiv e income tax rate w as 29.6% in 1Q08, compared to 22.6% at 4Q07, and 47.3% in 1Q07. Other information Capex We report capital ex penditure in the quarter of R$ 83.2 million, with the follow ing components: (i) inv estment of R$ 39.9 million in forests; (ii) R$ 20.5 million in the capital ex penditure on the new pulp line of Mucuri, (iii) R$ 9.9 million in industrial inv estments; (iv ) R$ 10.7 in inv estments at Conpacel and, (v ) R$ 2,8 million in administrativ e inv estments and logistics, and the Amador Aguiar hydroelectric power plant. Debt Our consolidated net debt continues to improv e. At the end of 1Q08 it w as R$ billion, 3.48 times last-12-months adjusted Ebitda, w hich compares with R$ billion, and a ratio of 3.74, at the end of month cash flow last-12-months Ebitda to the end of March is R$ billion, helping reduce nominal debt. 898 Debt schedule amortization (US$ million) Cash April 2008 to March 2009 April 2009 to Dec onwards Ripasa Under the agreement with Votorantim for acquisition of stockholding control of Ripasa, completed in 2005, one of the three prev ious controlling stockholder groups of Ripasa receiv ed an option to sell their remaining shares in Ripasa, w ithin six y ears. 10/17

11 The v alue pay able by Suzano for this purchase w as originally R$ 216 million, equiv alent to US$80 million, to be adjusted in Reais by the variation of the Selic rate, calculated cumulativ ely, from April 1, 2005 to the date of payment and transfer of ow nership. The adjusted amount on March 31, 2008 w as R$ 327 million. This group of former controlling stockholders of Ripasa notified their decision to exercise their put option on their holding in Ripasa, of 5,428,955 common shares and 1,009,583 A preferred shares, on March 3, Under the option contract, and determinations imposed by CVM Instruction 10, Suzano has submitted a formal consultation to the Brazilian Securities Commission (CVM), and is aw aiting CVM s response before completing the transaction and the corresponding corporate and accounting actions. Capital m arkets Our shares fell by 9% over the first quarter of 2008, w hile the Bov espa index fell 5%, and the IBRX-50 fell 3%. The shares maintained good liquidity over the quarter, w ith an av erage of 421 trades per day, and average daily trading v olume of R$ 15.3 million, in the quarter. 300% 250% 200% 150% 100% 50% Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Suzano Ibovespa IBRX R$ Tsd / day Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q Trades / Daily Avg. Daily Volume Number of Trades (Daily) 11/17

12 Note Non-financial data such as volumes, quantities, average prices, average selling prices and Ebitda, in Reais and in dollars and the financial data has not been examined by our independent auditors. Corporate information Suzano Papel e Celulose, with annual revenue of RS$ 1.9 billion, is one of the largest vertically integrated producers of eucalyptus pulp and paper in Latin America, with annual production capacity for 1.1 million tons of paper and market pulp production capacity that will reach 1.7 million tons of pulp per year in It offers a broad range of pulp and paper products for the domestic and international markets, with leadership positions in key Brazilian markets. It has four product lines: (i) eucalyptus pulp; (ii) uncoated woodfree printing and writing paper; (iii) coated woodfree printing and writing paper; and (iv) paperboard. Forward-looking statements This release may contain forward-looking statements. These are subject to known and unknown risks and uncertainties which may result in such expectations not being realized or being substantially different from eventual outcomes. These risks include: changes in future demand for the company s products, changes in factors affecting domestic and international prices of the products, changes in the costs structure, changes in seasonal market patterns, changes in prices charged by competitors, foreign exchange variations, changes in the political or economic situation of Brazil, and changes in emerging and international markets. Contacts 1) Investor relations: ri@suzano.com.br / Tel: Bernardo Szpigel / Vinícius Campos / Rosely D Alessandro / Elaine Wandeur 2) Press Office: GWA Comunicação Integrada leticia@gwacom.com / leticiav olponi@gwacom.com Letícia Volponi camilaa@gw acom.com Camila Salmazi 3) Exports: sales@suzano.com.br Six pages of tables follow /17

13 Appendices Balance sheets, with proportional consolidation of Ripasa (R$ 000) Mar 31, 2008 Dec 31, 2007 Mar 31, 2008 Dec 31, 2006 Current Assets Current Liabilities Cash and Cash Equivalent Trade Accounts P ayable Trade Accounts Receivable Loans A nd Financing Other A ccounts Receivable Debentures Inventories Accrued Salaries and Payroll Taxes Recoverable Taxes Taxes Payable Other than on Income Deferred Income And Social Contribution Taxes Income and Social Contribution Taxes Prepaid Expenses Deferred Taxes and Contribution Dividends Payable Other Acounts Payable Related Parties Non Current Assets Non Current Liabilities Marketable securities Related Parties Loans and Financing Recoverable Taxes Debentures Deferred Income And Social Contribution Taxes Accounts Payable Advances To Suppliers Income Tax and Social Contribution Judicial deposits Deferred Income and Social Contribution Taxes Other A ccounts Receivable Provision For Contingenc ies Permanent Assets Shareholder s Equity Share Capital Investments Capital Reserves Property, Plant And Equipment Profit Reserves Deferred Charges Treasury Shares (15.080) (15.080) Intangible Accumulated Profit Total Assets Total Liabilities /17

14 Income statements, with proportional consolidation of Ripasa (R$ 000) 4Q07 1Q08 1Q Q08 x 4Q07 1Q 08 x 1Q x 2006 NET SALES ,6% 19,8% 10,0% COST OF SALES ( ) ( ) ( ) ( ) ( ) 6,8% 25,8% 14,0% GROSS PROFIT ,4% 8,7% 3,2% SELLING EXPENSES (51.766) (42.559) (43.061) ( ) ( ) -17,8% -1,2% 2,1% GENERAL AND ADMINISTRATIVE EXPENSES (73.567) (59.558) (57.306) ( ) ( ) -19,0% 3,9% -5,8% FINANCIAL EXPENSES (86.871) (59.599) (72.139) ( ) ( ) -31,4% -17,4% - 10,1% FINANCIAL INCOME ,8% -21,4% 11,1% EQUITY PICKUP IN SUBSIDIARIES AND AFFILIATES 209 (277) 912 (85) (391) -232,5% - 130,4% - 78,3% AMORTIZATION OF GOODWILL (19.053) (19.761) (20.989) (82.343) (71.431) 3,7% -5,9% 15,3% OTHER OPERATING INCOME ,7% 264,2% 113,6% OPERATING PROFIT BEFORE MONETARY AND EXCHANGE ,8% 33,7% 19,7% NET MONETARY AND EXCHANGE RATE VARIATION ,5% -90,1% 192,5% OPERATING PROFIT ,2% -8,5% 58,4% NONOPERATING INCOME ( EXPENSES), NET ( ) (1.728) (90) ( ) ,6% - - NET INCOME BEFORE INCOME AND SOCIAL CONTRIBUTION TAX ,4% -9,3% 36,6% INCOME AND SOCIAL CONTRIBUTION TAXES (27.096) (54.085) (95.372) ( ) ( ) 99,6% -43,3% 79,9% NET INCOME FOR THE PERIOD ,6% 21,2% 21,6% 14/17

15 Cash flow statements, w ith proportional consolidation of Ripasa (R$ 000) March Cash flows from operating activities Net income for the period Adjustements to reconcile net income to cash generated from operating activities Depreciation, depletion and amortization Result on sale of property, plant and equipment Equity interest in subsidiaries and affiliates Amortization of goodwill Deferred income and social contribution taxes Interest, exchange and monetary varation of noncurrent assets and liabilities (1) Increase in provisions (37.702) Others provisions (3.683) 287 Changes in assets and liabilities (Reduction) Increase in accounts receivable and other receivable (Reduction) Increase in other current and non-current assets (74.923) ( ) Increase (reduction) in other current liabilities (1) (90.322) Net cash from operating activities Cash flows from investing activities Non current marketable securities (691) (2.832) Acquisition of investments (350) (40.764) Acquisition of property, plant and equipment and Increase of deferred charges (29.074) ( ) Cash made available by absorption of BLDSPE Celulose e Papel S.A Transfer from non current to current assets Receipt from sale of property, plant and equipment Net cash used in investing actitivities (21.400) ( ) Cash flows from financing activities Capital increase due to Ripasa s shareholders migration - - Capital increase due toh conversion of convertible debentures 3 39 Dividends Paids (64.589) ( ) Loans Received Payment of Loans ( ) ( ) Net cash from financing activities Effects of exchange rate variation on cash and cash equivalents (2.740) (42.478) Demonstration of Increase (decrease) in cash and cash equivalents Beginning of quarter End of quarter Increase (decrease) in cash and cash equivalents /17

16 Consolidated loans and financings, w ith proportional consolidation of Ripasa (R$ 000) Index Interest Mar 31, 2008 Dec 31, 2007 For acquisition of equipament BNDES - Finem TJLP 8, 50% BNDES - Finem Basket of Coins 8, 87% BNDES - Finame TJLP 9, 87% BNDES - Finame Basket of Coins 9, 26% BNDES - Automático TJLP 9, 21% BNDES - Automático Pre-fixed Taxe 9, 26% FNE - BNB Taxa pré-fixada 9, 78% FINEP TJLP 6, 00% Crédito Rural TJLP 8, 75% Working capital FMO US$ 5, 89% Importation financing US$ 8, 90% 0 0 Nordic Investment Bank US$ 5, 81% Export credir note US$ 7, 07% Industrial credit note TR 11,94% Others TJLP 11,94% Current liabilities Noncurrent liabilities Loans 2008 (since July, 1st 2007) /17

17 Debentures Mar/ Issue Series Units Current Non current Total Total Index Interest Due date 3ª 0 1ª IGP-M 0 10% * 0/1/1900 1/4/2014 3ª 2ª USD 9,85% 7/5/2019 4ª 0 1ª TJLP 0 0,00% 2,50% 1/12/2012 0/1/1900 4ª 0 2ª TJLP 2,50% 1/12/ * The contractual interest rate was 8% p. a. The effective interest rate was adjusted considering premium and discount on the issue price. 17/17