Brazil’s Fibria Q4 loss falls, to cut investments

* Net loss down 84 pct in Q4 as sales surge 41 pct

* To cut investments to 1.25 bln reais, down 22.5 pct

* Derivative related losses almost zeroed in Q4

By Guillermo Parra-Bernal and Carolina Marcondes

SAO PAULO, Brazil, Feb 26 (BestGrowthStock) – Fibria (FIBR3.SA: ),
the world’s largest supplier of pulp to paper makers, cut its
net loss in the fourth quarter by 84 percent after sales surged
and management almost zeroed the company’s exposure to toxic
derivatives.

Sao Paulo-based Fibria posted on Friday a net loss of 150
million reais ($81 million), compared with a pro forma loss of
968 million reais a year earlier, according to a regulatory
statement. For the third quarter, Fibria reported net income of
181 million reais.

Fibria benefited from pent-up demand for fiber in China,
where a booming economy is fanning demand for books, cardboard
and packaging. The results also signaled the worst could be
behind for Fibria, the byproduct of a government sponsored
merger between rivals VCP and Aracruz after wrong one-way bets
on the Brazilian currency pushed both companies to the brink of
bankruptcy at the end of 2008.

Fibria sold more pulp than what it produced in the quarter,
the company said. Sales rose 41 percent in the quarter and
reached 1.46 million tonnes, compared with output of 1.40
million tonnes.

Net financial income, or the difference between
nonoperating revenues and expenses, posted a shortfall of 67
million reais, compared with a deficit of 4.5 billion reais a
year earlier.

Net revenue rose 7 percent to 1.59 billion reais, Fibria
said.

Earnings before interest, taxes, depreciation and
amortization, a gauge of operating profit and cash generation
known as EBITDA, fell 8 percent from the year-earlier period to
503 million reais. The company attributed the decline to a drop
in average pulp prices during the quarter.

The company also said investments this year should reach
1.25 billion reais, 22.5 percent less than in 2009. Most of the
investments will go to keep some ongoing operations running and
to kick-start some others that were suspended during the global
crisis.

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($1=1.831 reais)
(Additional reporting by Alberto Alerigi Jr., editing by
Gerald E. McCormick)

Brazil’s Fibria Q4 loss falls, to cut investments