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
"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.
"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.
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
"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.