SÃO PAULO Brazilian copper producer Paranapanema SAs earnings more than doubled year on year in the first quarter of 2013, according to the companys quarterly report.
The company posted net income of 59 million reais ($29.4 million) in the three months ended March 31, an improvement over a net loss of 3.5 million reais in first-quarter 2012. The companys net revenue totaled 1.27 billion reais ($634.4 million), up 38.3 percent year over year.
"The positive results of the fourth quarter of 2012 got stronger, despite the (lower) copper prices," interim chief executive officer Edson Monteiro told AMM sister publication Metal Bulletin.
In the fourth quarter of 2012, Paranapanema posted a net income of 40.84 million reais, after registering a net loss of 61.22 million reais in the same period of 2011.
"The commercial strategy of Paranapanema still emphasizes the domestic market, although the expansion of production capacity, higher productivity and better business conditions also increase the competitiveness of exports," the company said.
First-quarter domestic sales reached 819.1 million reais ($409.3 million), a 26.2-percent increase over the same period in 2012, while revenue from imports totaled 452 million reais ($225.9 million), up 67.4 percent year on year.
Volumes reached a historical quarterly level of 76,778 tonnes, up from 56,856 tonnes in the first quarter of 2012.
Copper prices in the quarter averaged $7,928 per tonne, 4.6 percent lower than prices in the same period of 2012, according to Paranapanema.
The results also benefited from a devaluation of the Brazilian real in relation to the U.S. dollar.
"The equivalent average copper prices in reais increased 7.7 percent in Q1 2013 compared to Q1 2012, reflecting the 12.9 percent devaluation of the real against the U.S. dollar in the period," the report said.
Paranapanemas board started a restructuring plan last year, called New Paranapanema, that aims to increase the companys copper production capacity to 280,000 tonnes per year from 220,000 tonnes per year, as well as the opening of a new tube plant in São Paulo and technological upgrading of its Dias DÁvila operations in the state of Bahia.
Investments in 2012 totaled 433 million reais ($216.3 million), and the company plans to spend an additional 522 million reais ($260.7 million) in the 2013-to-2014 period.
"The tube plant has just started phase tests, and were concluding the upgrading at Dias DÁvila in June," Monteiro added. "Other plans include setting a new laminate manufacturing plant from the secondhand machinery we have since we bought a deactivated plant in Poland."
The initial objective was to install the unit in Espírito Santo state, but further technical analysis are being made as the board wishes to find a way to integrate the tube plant in São Paulo with the laminate manufacturing plant.
A version of this article was first published by AMM sister publication Metal Bulletin.