Ence Energía y Celulosa SA

05/05/2023 | Press release | Distributed by Public on 05/05/2023 06:23

Ignacio Colmenares, President of Ence – Energía y Celulosa, stated at the General Shareholders’ Meeting that the company has before it a future of growth and diversification

The Chairman of Ence - Energía y Celulosa, Ignacio Colmenares, stated today in his speech at the company's General Shareholders' Meeting that the Group has before it "a future of growth and diversification" in its different businesses, fully aligned with the circular bioeconomy.

The Chairman of Ence has highlighted the important role of cellulose in the decarbonisation process and has influenced the capacity of this renewable, recyclable and biodegradable material to replace plastics and offer society more sustainable solutions and products. The company's firm commitment to decarbonisation is also evidenced by its Renewables business, in which Ence is committed to a portfolio of different generation technologies, with which it contributes to the advancement of the energy transition.

The Board has approved the accounts for the 2022 financial year, in which Ence obtained a consolidated net profit of €247 million, following the rulings handed down on February 7 by the Supreme Court, which confirmed the validity of the extension of the concession of the company's biofactory in Pontevedra until 2073. Strong pulp prices and good operating results also boosted the company's profit, despite the stoppage that had to be carried out at the Pontevedra biofactory during the second half of the year as a consequence of the drought.

Likewise, the Shareholders' Meeting has approved today the distribution of a complementary dividend of 0.29 euros gross per share (€70 M) charged to the results of 2022, which will be paid on May 18, 2023. This dividend will be addition to that distributed in March, also of 0.29 euros gross per share (€70 M) and the €67 M distributed on account of the results of 2022.

GROWTH AND DIVERSIFICATION IN PULP AND RENEWABLES

The strength of the Group's balance sheet provides flexibility to take advantage of growth and diversification opportunities in both its Pulp and Renewables businesses. All of this under the premise that "for Ence, sustainability is synonymous with competitiveness", as the Chairman of the Group stressed before the shareholders.

Thus, Ence continues to be the leading company in sustainability in the pulp sector worldwide according to the latest Sustainalytics rating, which in 2022 reiterated its global score for Ence's environmental, social and corporate governance performance at 91/100.

In the Cellulose business, Ence continues to make progress in the "Navia Excelente" project to diversify its production towards fluff pulp for absorbent hygiene products, to continue advancing in decarbonization and to boost the sale of its differentiated products.

This range of products, Ence Advanced, stands out in the market for its quality, sustainability and ability to replace plastics in a multitude of applications. At the end of 2022, it already accounted for 17% of the percentage of the company's pulp sales.

Likewise, it continues to advance in the project that it is studying to launch in the Galician town of As Pontes for the production of bleached recycled fiber from recovered cardboard and paper and from virgin cellulose produced by Ence, without increasing the consumption of wood.

In the Renewables business, Ence Biogas has the goal of developing 20 biomethane plants over the next 5 years. The company already has a portfolio of 15 projects under development in Spain and during the first quarter it has already signed contracts for the development of the conceptual engineering of 6 of these plants, whose entry into operation is scheduled for the end of 2025 and 2026.

Also in the Renewables business, the Group has a portfolio of 140 MW with which to participate in upcoming biomass auctions and with 300 photovoltaic MW at an early stage of development (in addition to the 363 photovoltaic MW included in a rotation agreement for assets signed with Naturgy, of which the first 100 MW were sold last March). In addition, the company is exploring opportunities for renewable industrial heat generation and CO2 sink activity.

RESULTS FIRST QUARTER 2023

In his speech before the shareholders, the Chairman of Ence also presented the results obtained in the first quarter of 2023. A quarter in which the Group achieved a net profit of €30.4 million, thus more than doubling the €13 million that registered in the same period of 2022. Revenues for the quarter grew 26% year-on-year, to €296m, while operating profit grew 91%, to €89m.

The company's results had this strong growth, driven by a pulp price still close to maximums, by the normalization of production in the Pontevedra biofactory, by the improvement in the regulated price of energy and by the formalization of the sale of a first photovoltaic plant under construction, in Jaén (the aforementioned 100 MW, which represented an additional operating result of €23 million).

At the operational level, the growth of 41% in pulp production compared to the previous quarter stood out, thanks to the aforementioned normalization of the activity of the Pontevedra biofactory.
On the other hand, the average sale price in the period was 17% higher than in the same period of 2022, which made it possible to offset the accumulated inflation in the cost of raw materials.

The Group's net financial debt stood at €128 M at the end of the quarter, while its effective balance at the end of the quarter stood at €350 M.