OREANDA-NEWS. Leader in the manufacture and sale of nonwovens in Brazil with a significant presence in the Americas and operating globally, Companhia Providência (BM&FBovespa:PRV13) announces second quarter net revenues of BRL 163.8 million, a year-on-year decrease of 15.2% following the partial shutdown of its production lines.

Company revenue during the quarter was lower due to the partial shutdown of some production lines as from April 1, 2014 at the São José dos Pinhais (PR) plant on the orders of the Ministry of Labor until compliance with the requirements of NR-12 could be shown. Accordingly, the Company accelerated projects for adjusting equipment during the period and product lines are now fully operational once more.

Sales volume amounted to 22.6 thousand tons, a 25.9% reduction in relation to the second quarter 2013. The decrease was 23.9% for nonwovens' sales in isolation. Providência's adjusted EBITDA reached BRL 7.2 million, a year-on-year decline of 77.5%. The adjusted EBITDA margin for the quarter amounted to 4.4%, 12.2 percentage points below the same quarter in the preceding year - a fall which can also be attributed to the partial shutdown of the São José dos Pinhais unit.

"The quarter was one of the most challenging in the Company's history with parts of our production facilities in São José dos Pinhais at a standstill during the period", said Hermínio de Freitas, Companhia Providência's CEO. "However, a concentrated effort was made to restart full production as quickly as possible."

The second quarter also saw the conclusion of the acquisition of a controlling stake in the Company by PGI, world leader in nonwovens manufacturing. Concluded in early June, Freitas remarked on the opportunities the acquisition will bring. "Unquestionably, the combined efforts with PGI will contribute to our continued success in our chosen markets."

The net financial result in the period was a negative BRL 20.2 million compared with a net financial result of BRL 6.9 million in the same period in 2013. This is a direct reflection of the foreign exchange translation effect on currency denominated assets and liabilities as well as the realization of a non-cash event related to a transaction involving the refinancing of debt. The costs of the early repayment of debt were fully reimbursed by PGI. Compared with the first quarter of this year, the currency translation effect as well as the realization of the funding costs involved in settling loans and financing also had a direct impact.

The Company posted a loss of BRL 45.4 million in the quarter, principally due to lower sales volume and nonrecurring expenses with consultancy fees relating to the sale of a controlling stake in the Company, the subject of a Material Fact published on June 11, 2014.

Net debt increased by 5.6% compared with 2013, principally due to the reduction in cash and cash equivalents in the quarter.