Altri Group’s Revenue Decreased 38.6 Percent
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Altri Group achieved total revenues of € 174.4 M in the 3Q23, a decrease of 38.6% vs 3Q22. The slow down in the growth of global pulp demand during 2023, which resulted from a relevant destocking process in the Pulp and Paper industry and the lower dynamism of economic activity, led the Altri Group to register a lower sales level and prices than the same period last year. Compared to the 2Q23, total revenues decreased 13.6%, as a result of a relevant decrease in the pulp prices, despite the increase in the volume sold. In the 9M23, the Group recorded total revenues of €601.0 M, -25.4% compared to the same period last year.
Faced with one of the most sudden cycle changes in more than a decade, and as a result of the downward price correction that has taken place, the Altri Group recorded an EBITDA of € 16.3 M in 3Q23, a decrease of 82.4% compared to the same period of last year. In the 3Q23, the Altri Group recorded an EBITDA margin of 9.3%, which compares with the 32.6% reported in the 3Q22. The decrease in costs continued during 3Q23, but not enough to offset the fall in prices since the start of the year. Looking at the 9M23, the Altri Group achieved an EBITDA of € 97.5 M, a reduction of 56.3% vs the 9M22, which implies an EBITDA margin of 16.2%. The Altri Group will continue to actively work on cost reduction in the coming quarters.
The Altri Group is in the final testing phase of ‘Caima Go Green’, one of the key projects in matters of Sustainability, environmental improvement, and energy efficiency. This project will enable Caima to become the first industrial unit of the Altri Group, and the first in the industry, in the Iberian Peninsula, 100% free of fossil fuels.
On the other hand, given the focus of the Altri Group on pursuing its strategic vectors of Sustainability, the revamping of the new industrial wastewater treatment plant (ETARi) was concluded at the Group's largest industrial unit (Celbi), which will bring benefits by reducing water consumption and improving the quality of the effluent and operating efficiency, thus making a sustainable contribution to increasing the profitability of this industrial unit.
The improvement in the level of global pulp demand, as a result of the strong recovery in the Asian market, has already led to successive increases in pulp prices (BHKP) in China, which has led to improvements in the price level in Europe since September. As such, and despite a difficult third quarter in financial terms, we foresee a more positive outlook and improved profitability for the Altri Group in the fourth quarter of the year and the beginning of 2024.
The Altri Group continues to develop the Gama project with the intention to take a final investment decision in the short term. The Gama project is configured as a transformational project, implying the construction of a new industrial unit for the production of dissolving pulp and sustainable textile fibres, in Galicia.
“In 2023, the cellulosic fiber market is going through an adjustment in its cycle, with inevitable impacts compared to the trend followed in recent years. Lower demand invariably leads to lower prices, in an inflationary context that has obviously had an impact on the players in this sector.
Despite the challenging environment, the Altri Group ended the first nine months with high production levels, exceeding 780 thousand tons of cellulosic fibers and sales that surpassed 810 thousand tons. Throughout the year we have had a sharp focus on our operating costs, which have shown a consecutive decrease over several quarters. These are figures that reflect the solidity of our operational capacity as well as the necessary agility on the commercial front.
Although the European and North American markets continue to show a slowdown in demand, we are seeing a strong recovery in Asia, particularly in China. This increase in demand has led recently to successive price rises in China, with a positive impact in European prices. We are now entering the final months of the year with a more positive outlook, both for the next quarter and for 2024.
At the Altri Group we have the motto “Our value is made of fibre”. And we live up to it, continuing to work on the optimization of costs, quarter after quarter. In that context, it is also important the completion of the “Caima Go Green” project, currently in the final testing phase, which will enable Caima to be the first of the three industrial units of Group Altri to be 100% free of fossil fuel and the first in the Iberian Peninsula. This is one of the most important projects for the Group in the pursuit of its Sustainability vectors, together with the Gama project, which we continue to develop, with the intention of making a final investment decision in the short term. This project, which involves the construction of a new industrial unit in Galicia to produce dissolving pulp and sustainable textile fibres, will enable the Altri Group to make a decisive contribution to decarbonising the textile industry,” says José Soares de Pina Altri’s CEO.
