OREANDA-NEWS. August 16, 2011. Companhia Providencia reported profits of BRL  9.5 million in the period and net revenue of BRL  241.9 million. Sales volume over the same period also posted an increase reaching 42 thousand tons.

Companhia Providencia (Bovespa: PRVI3), a leader in the manufacture and sale of nonwovens in Brazil with a significant presence in the Americas and operating globally,  announces its results for the second quarter 2011 (2Q11). Net operating revenue recorded a year-on-year increase of 9% and 10.1% against the first quarter of 2011, reaching BRL  126.8 million. Total sales volume also posted an increase of 10.1% compared with the same period of 2010 and with the first quarter of this year.

“Companhia Providencia continues to resolutely pursue its growth strategy. During the first half, the Company began work on the installation of a production line in Pouso Alegre, state of Minas Gerais, and on the expansion of our plant in the United States, which this year has already contributed sales of 2,563 tons of nonwovens”, explains Herminio de Freitas, the company’s CEO. These new investments translated into a 34.2% increase in net leverage. A further highlight of the second quarter was the payout of additional dividends of BRL  21.8 million in May, totaling 100% of the adjusted dividend calculation base in 2010.

First half

First half 2011 net income was 45.1% up on the same period in 2010 at BRL  9.5 million. Net operating revenue amounted to BRL  241.9 million, an increase of 9.6% compared with the same period last year. In relation to the first half of 2010, adjusted Ebitda fell 15.5% to BRL  40.2 million. This was a reflection of higher  prices of polypropylene, the principal raw material for the production of nonwovens as well as the initial machine operations and adjustments at the US plant.

“Our plant in the United States is in line with plans for ramping up an increase in projected volume for this kind of equipment. This machine has already reached a sales volume of 2,563 tons in 2011, and during the next quarter should reach its full capacity”, commented Eduardo Feldmann, CFO of the company. “Our new installations will allow us to keep pace with growth in market demand which is currently heavy.”

Companhia Providencia’s investments are running to plan, with the order placed and  down payment confirmed for two production lines which will go into operation in 2012. At a total cost of USD 123 million, these units will add 40 thousand tons annually to our manufacturing capacity.

The numbers for the quarterly results cover the Providencia USA Inc. and Isofilme subsidiaries. The comparative quarters already factor in the adjustments of Law 11.638/07 to Brazilian accounting practices.