Empresas CMPC, currently valued at $3.89 billion, reported its first-quarter 2025 earnings, showcasing a notable earnings per share (EPS) beat with actual EPS at $0.0412 compared to a forecast of $0.0318. Despite missing revenue expectations, posting $1.78 billion against a forecast of $1.92 billion, the company’s stock saw a positive reaction, rising by 1.18% to $1,455 in the latest trading session. According to InvestingPro analysis, the company trades at attractive multiples with a P/E ratio of 7.74 and a P/B ratio of 0.49, suggesting potential undervaluation.
Key Takeaways
- EPS surpassed expectations, driven by strong operational performance.
- Revenue fell short of forecasts due to challenges in the pulp market.
- Stock price increased by 1.18% following the earnings release.
- Strategic acquisitions and asset sales are part of ongoing restructuring.
Company Performance
Empresas CMPC demonstrated resilience in the first quarter of 2025, with a net income of $50 million, a significant improvement from $10 million in the previous quarter, although down from $29 million in the same quarter last year. The company continues to face challenges in the pulp market, especially in China, but maintains a solid position in the European and North American markets.
Financial Highlights
- Revenue: $1.8 billion, down 6% quarter-over-quarter and 7% year-over-year.
- EPS: $0.0412, exceeding the forecast of $0.0318.
- Consolidated EBITDA: $278 million.
- Net Income: $50 million, up from $10 million in Q4 2024.
Earnings vs. Forecast
Empresas CMPC’s EPS of $0.0412 beat the forecast of $0.0318 by approximately 29.6%. This positive surprise reflects the company’s effective cost management and strategic focus, despite revenue falling short of the $1.92 billion forecast.
Market Reaction
Following the earnings announcement, Empresas CMPC’s stock rose by 1.18%, reaching $1,455. This positive movement reflects investor confidence in the company’s ability to manage its operations and navigate market challenges. According to InvestingPro’s Fair Value analysis, the stock appears undervalued, suggesting potential upside opportunity. The company maintains a GOOD Financial Health Score of 2.66, underpinned by strong liquidity with a current ratio of 2.08.
Outlook & Guidance
The company remains committed to strategic projects like the Natureza project, with a decision expected by mid-2026. It aims to reduce leverage below 3x by year-end and anticipates a recovery in the Softies segment margins by Q4 2025. Future guidance projects EPS and revenue growth over the next two years.
Executive Commentary
CEO Francisco Ristagli emphasized commitment to the Natureza project, highlighting its potential capacity of 3.5 million tons. Chief Commercial Director Guillermo Vieci noted low inventory levels among Chinese customers, suggesting potential price recovery. An executive expressed optimism about margin recovery in the Softies segment by the last quarter.
Risks and Challenges
- Pulp market volatility, particularly in China, could impact future earnings.
- Global economic conditions may affect the Biopackaging segment.
- Maintaining investment-grade ratings amidst leverage reduction efforts.
- Currency fluctuations and geopolitical tensions pose additional risks.
Q&A
During the earnings call, analysts focused on the anticipated recovery in pulp prices and the company’s leverage strategy. There was keen interest in the operational efficiency of the Softies segment and the potential recovery in the Biopackaging market.
Overall, Empresas CMPC’s Q1 2025 earnings report highlighted strong EPS performance and strategic initiatives, despite revenue challenges. The company’s proactive measures and market position continue to inspire investor confidence, supported by robust fundamentals and a healthy balance sheet. For deeper insights into CMPC’s valuation and growth prospects, including exclusive financial metrics and expert analysis, visit InvestingPro.
Full transcript - Empresas CMPC (CMPC) Q1 2025:
Fernando Hasenberg, CFO, CNPC: Hello, everyone. I’m Fernando Hasenberg, CFO of CNPC, and I would like to welcome you to our first quarter twenty twenty five earnings webinar. Joining me today, I have Francisco Ristagli, CEO of CNPC Rosalo da Raido, CEO of Softies Guillermo Vieci, Chief Commercial Director of Pulp Business and Claudia Cabada, our Investor Relations Officer. Please note that the statements made today during the presentation and Q and A may include forward looking statements to assist you in understanding our expectation for future performance. These statements are subject to some risk and could cause actual results and events materially differ.
In the first quarter of twenty twenty five, sales amounted $1,800,000,000 EBITDA was $278,000,000 and net income was $50,000,000 The pulp business generated an EBITDA of $192,000,000 with an EBITDA margin of 24.5. EBITDA decreased by 17% quarter over quarter mainly from lower sales volumes and average prices. Year over year EBITDA increased by 7%, reflecting a higher volume and efficiencies in cost and expenses that allowed the margin to expand in a context of lower prices. The softies business reported an EBITDA of $81,000,000 decreasing 22% quarter over quarter and 51% year over year with an EBITDA margin of 10.7%. This business has experienced increased competition in this market as well as a negative impact from currency fluctuation in some countries on its year over year comparison.
Biopagging reported an EBITDA of $31,000,000 during the period with a 63% increase quarter over quarter mainly to efficiencies in cost and operational expenses. Year over year EBITDA declined 6% on lower average prices and margin contracted to 11.4% from the 12% recorded in the first quarter of twenty twenty four. In the first quarter, the composition of CNPC sales was $785,000,000 from the pulp business, dollars $755,000,000 from the softies and two seventy one million dollars from the bio packaging business, totaling consolidated sales of $1,800,000,000 Consolidated sales were 6% down quarter over quarter and 7% down year over year. Quarter over quarter, the fluctuation reflects lower revenues across the pulp, softies and biopackaging businesses. Year over year, the difference reflects lower revenues in softies and biopackaging.
On the other hand, pulp increased volumes from the bio CNPC project that ramped up during 2024 in a context of lower hardwood prices. Operating costs reached $1,224,000,000 dollars reflecting a 3% decrease quarter over quarter and a 1% decrease year over year. Operating costs decreased quarter over quarter on lower pulp volumes together with efficiencies in softies and biopackaging. Year over year, the variation is explained by efficiencies in pulp and biopackaging. Other operating expenses account that comprises distributional cost, administration expenses and other expenses by function amounted $311,000,000 in the first quarter, decreasing 6% quarter over quarter and 2% year over year.
Compared to the fourth quarter of twenty twenty four, all three businesses RS showed improvements. Year over year, the lower figure is related to decreases in Softy’s. In the first quarter of the year, other operating costs and expenses represented 17.2% of sales, stable quarter over quarter and above the 16.3% reported on the first quarter of twenty twenty four. As said before, this is in a context of decreasing sale prices. Given the aforementioned effect, on a consolidated basis, the company’s first quarter EBITDA was $278,000,000 where the contribution of the pulp segment was 63%, softies was 27% and biopackaging was 10%.
Net income totaled $50,000,000 during the period, an increase from the $10,000,000 obtained in the previous quarter and a decrease from the $2.00 $9,000,000 in the first quarter of twenty twenty four. The quarter over quarter increase was driven by a lower income tax expense and a higher foreign exchange gains. The year over year decrease was mainly due to insurance compensations received in the first quarter of twenty twenty four and a lower EBITDA generation in Softies. Now I would like to turn the presentation over to Claudia, who will provide
Claudia, Investor Relations Officer, CNPC: Thank you, Fernando, and good morning, everyone. I’ll start with the pulp business. Pulp production was 1,081,000 tons, increasing 1% quarter over quarter and 4% year over year. These variations were driven by shorter maintenance downtime and in the year over year case, increased capacity in Brazil from the BioCNPC project in Guayiba, which ramped up early twenty twenty four and increased Guayiba plant capacity by 350,000 tonnes per year. Therefore, hardwood production was 887,000 tons, up 2% Q on Q and five percent year over year.
Softwood production was 184,000 tonnes, decreasing 4% quarter over quarter and 3% year over year. Variations also reflect differences in maintenance downtime. Regarding pulp sales volume, it decreased by 5% Q on Q and increased 13% year over year. In the Q on Q comparison, hardwood volume decreased 4% and softwood volume decreased 11% as a result of a combination of lower exports to China and the rest of Asia. In the year over year comparison, third party pulp sales volume increased by 13%, with softwood up 9% and hardwood up 14%.
The increase in hardwood was due to higher exports to China, the rest of Asia, Latin America and Europe. For softwood, the increase resulted from higher exports to Europe, China, the rest of Asia and Latin America. Regarding pulp prices, during the first quarter of the year, softwood sales price averaged $770 per ton, up 3% Q on Q and 7% above average price in the first Q ’twenty four. Hardwood sales price averaged $558 per tonne, declining 3% Q on Q and 11% year over year. As a result, revenues for the pulp business totaled $622,000,000 decreasing 7% Q on Q and increasing 1% year over year.
Regarding the forestry business, sales volume was 913,000 cubic meters, raised rose six percent Q on Q as a result of higher sales of SOLOX, other wood and some timber. This was partially offset by lower sales of plywood and remanufactured wood. Year over year, a 3% decrease in the forestry business reflects lower Zolox, some timber and other wood. This was partially offset by increased volumes of remanufactured wood, pulpwood and plywood. With this, revenue for our Pulp and Forestry business totaled $785,000,000 down 6% Q on Q and increasing 3% year over year.
Moving to pulp cash costs. For hardwood, cash costs reached two eleven dollars per tonne in the first Q twenty five, decreasing 7% Q on Q and 14% year over year. The Q on Q decrease was due to all lines showing reductions with the most significant declines in wood and chemicals, followed by labor, materials and energy. For softwood, cash cost reached $370 per tonne in the first Q twenty five, up 3% Q on Q and stable year over year. Compared to the previous quarter, the increase was due to higher energy and wood costs, partially offset by lower material and labor costs.
EBITDA of the pulp business decreased 17% Q on Q and increased 7% year over year, recording $192,000,000 with an EBITDA margin of 24.5%. Q on Q, the decline in EBITDA was mainly related to lower pulp size volume and decreased margins to the lower average prices. Year over year, the increase was primarily due to higher sales volumes and operational cost efficiencies, leading to margin expansion in the context of lower average prices. Moving to Softies. During the quarter, the business continued to operate in a highly competitive market and it has responded by focusing on brand building and positioning, particularly in Personal Care products and in markets with higher growth potential.
Revenues totaled 55,000,000 with a 5% decrease compared to the first Q twenty twenty four and a 14% decrease compared to the first Q twenty twenty four. Regarding volumes, Q on Q tissue paper decreased 1% and personal care increased 1%. In the year over year comparison, tissue volumes rose 1% and personal care volumes were stable. In terms of average sales price in U. S.
Dollar, for tissue, it decreased 4% Q on Q and 15% year over year. For personal care, they declined 6% Q on Q and 14% year over year. These price fluctuations reflect in the year over year case, currency depreciation in LatAm and in the Q on Q case, a highly competitive market. Softy’s EBITDA for the first Q twenty twenty five reached $81,000,000 with a margin of 10.7%. The figure declined 22% Q on Q and 51% year over year and is a result of the aforementioned FX fluctuations and market conditions.
Moving to biopackaging. Sales volume decreased 5% quarter over quarter, mainly to decline sales in box fort, paper sacks, corrugated paper and other paper products. This was partially offset by higher sales of corrugated cardboard boxes and molded pulp trays. Year over year, sales volume increased 1% with higher volumes of corrugated cardboard boxes, other paper products, corrugated paper and molded pulp trays. And this was partially offset by lower sales of paper sacks and boxboard.
Average sales price in U. S. Dollar was down 1% Q on Q and 2% down year over year. Revenues amounted $271,000,000 representing a 6% decrease Q on Q and a decrease of 1% year over year. The Q on Q variation was due to lower sales volume in a still challenging environment for several industrial sectors.
In the first Q twenty five, EBITDA was up by 63% quarter over quarter due to lower costs and operational expenses. Year over year, EBITDA declined 6%, reflecting a lower average price. The EBITDA margin reached 11.4% in the first Q ’twenty five, up from 6.6 in the first Q twenty twenty four and below the 12% recorded in the first Q twenty twenty four.
Fernando Hasenberg, CFO, CNPC: Thank you very much, Claudia. Capital expenditures in the first quarter totaled $150,000,000 which compares to $261,000,000 reported in the fourth quarter of twenty twenty four and $152,000,000 recorded in the first quarter of twenty twenty four. Regarding the free cash flow during the period, there was a net $85,000,000 positive cash flow compared to an outflow of $109,000,000 in the fourth quarter of twenty twenty four and a net outflow of $176,000,000 in the first quarter of twenty twenty four. Year over year, the increase in free cash flow was mainly due to a reduction in dividend payments and a decrease in working capital requirements. We ended the first quarter of the year with $4,800,000,000 in net debt.
Gross debt was $5,500,000,000 and cash and cash equivalents including financial investment with short term maturities were $666,000,000 The net debt to EBITDA ratio closed the quarter at 3.41 times, which compares to 3.15 times in the fourth quarter of twenty twenty four or 4.03 times in the first quarter of twenty twenty four. Regarding our debt profile, the average rate is 4.74% and the average maturity is five point five years. Now I would like to highlight some important events that occurred during the first quarter. In the 2025 edition of the Standard and Poor’s Global Sustainability Yearbook, CNPC was ranked for the second consecutive year among the top 1% companies worldwide with the highest sustainability evaluation. This year, only four Latin American companies were included in this group with CNPC being the only Chilean company among them.
The S and P Global Sustainability Yearbook recognizes companies from various industries across the globe for their sustainable policies and their positive impact on the environment, communities and financial performance. On 04/01/2025, Softis initiated the financial integration of Falcon or Ontex Brazil. The acquisition includes a plant in Senador Canedo with 16 diaper production lines for babies and adults under well known brands such as Cremair, Pompom and Big Frog. This integration strengthened Softee’s presence in the Brazilian market, aligning with its growth strategy in high potential sectors and reinforcing its leadership in the Personal Care business. On April 21, CNPC sold its subsidiary Transmisora de Energia Nasimiento S.
A, TENSA, to Transmision Electrica Transmell S. A, a leading transmission operator in Portugal. The $71,400,000 transaction comprised 190 kilometers of power lines. This operation aligns with CNPC’s strategy to focus on its core businesses by transferring a non core asset to an specialized operator, thus enhancing operational efficiency. On April 24, CNPC held its one hundred and sixth Annual General Shareholders Meeting.
This time, among other topics, the nine member Board of Directors was fully renewed. The AGM also maintained the dividend policy at 30% and appointed as our external auditors for the period. The Board of Directors nominated Mr. Bernardo Arraim Mate as the new Chairman, replacing Mr. Luis Felipe Gacitua.
For more details of the AGM, please visit our webpage, ar.cnpc.com, material facts. Now I will turn the mic to Claudia for the Q and A section.
Francisco Ristagli, CEO, CNPC: Thank
Moderator, CNPC: you, Fernando. And please recall that you
Claudia, Investor Relations Officer, CNPC: are welcome to make
Moderator, CNPC: your questions just raising your hand or typing in the chat box. And we have here, as mentioned before, Francisco Ristale, our CEO of Empresa CNPC, Reynaldo Varela, CEO of CNPC. Guillermo Vieci, Chief Commercial Director of CNPC, Cerullo. We have already some questions. The first one comes from Tatiana Candini from JPMorgan.
Tatiana, your mic is open.
Tatiana Candini, Analyst, JPMorgan: Hello, Claudia. Thank you, everyone. Thanks for taking my questions. I have two questions. My first one is related to prices.
So we know that we have been seeing that the prices in the resale market in China have been decreasing, reaching the levels that we actually saw in 2023. And we already saw some companies actually announcing some price decreases from China. So I would just like to understand from you guys like what are your views for the second quarter even for the remaining of the year? We know that with trading war a lot has changed. So I just wanted to see your perspective now going forward.
And my second question is regarding the Naturaiza project. So I think we know that it’s a little bit early to start to discuss the Naturaiza project. But when we think about the pipeline of projects for the end of the decade, we have like one project of like 3,500,000 tons, another project in the process of 2,900,000 tons. I would just like to understand like how are you guys analyzing the situation, if there is a possibility for you to postpone the decision or going a little bit further in the decade? Just like to understand your view on that.
Thank you so much.
Guillermo Vieci, Chief Commercial Director, CNPC: Hey, Tatiana. Good morning. Guilherme here. I’ll take the first question regarding prices. While the current price scenario, especially in China, is very unclear.
It’s natural. It happens every year. Sometimes, the Chinese, when the market is very unclear, they take a step back and stop buying for a while until the price gets a little more transparent. The resale price is at very low. We hear even below 500s now.
The futures for softwood is at low 600s now. We do believe that this is going to lead to closures in the market. And once those closures take place, the market tends to recover and find itself a price point that is clearer to move forward. We still believe looking forward through the year, there is no new pulp capacity coming on stream this year, which leads us to believe that the price will eventually start going up because the market still grows organically worldwide. So at this point in time, we believe that the price announcement that was made reflects somewhat what’s going to be applied during this month.
But it’s still unclear and also given the trade war, as you mentioned, brings further uncertainty to the price. The last point I’ll make is that Chinese domestic producer of pulp have a marginal cost not far from the resale price that we are seeing at the moment. And in previous cycles, we have seen the Chinese, they are very pragmatic. They shut down their domestic production and they go to the market to buy market pulp. So we do expect this phenomenon to take place again this year.
Francisco Ristagli, CEO, CNPC: Okay. Tatian, thank you very much. This is Francisco Ritale. I will answer your question about Nadoresa. And well, just to mention that, first of all, CNPC is totally committed with the project Nadoresa.
We believe that we have a very good project. When you analyze this project from different standpoint, this is a very competitive project. So we we continue working and concentrating now in in in studying the engineering and permits and and advancing in in the in the in the forest needs for this project, but we are on time in in in everything. And and what I have to tell you that we’re we we, at this moment, we’re we’re not I’m I’m thinking even thinking in postponing anything. We we don’t need to take the decision right now.
So we will take the decision when we are ready for that. And there’s still room ahead in terms of, you know, studies that we haven’t we are doing now. So my answer to your question is that we’re very much concentrated in in having in starting this good project now. Of course, we haven’t taken the decision. We are not expecting to have a decision about this project this year.
It will be next year, probably during the next semester next year. And because it will be the moment when the Board define or take the decision about this project. But my answer is that we are 100% committed with the project. Even considering what you are mentioning, we understand that there other projects in the pipeline. And we, of course, are seeing what is happening around us, but we don’t need to take a decision now.
Tatiana Candini, Analyst, JPMorgan: Clear. Thank you so much. You’re welcome.
Moderator, CNPC: Thank you, Tatiana. Next question comes from Bank of America, Guillermo Rosito. Hi, Guillermo.
Guillermo Rosito, Analyst, Bank of America: Hi, good morning, everyone. Thanks, Karl. Thank you for taking my questions. So I have a question on today’s as well. I’m just wondering with leverage around 3.4, three point five times right now, how are you thinking?
I know it’s early stages as well, but how are you thinking the financing of the project? Is it going to be only debt? Are you thinking about selling some assets maybe to help fund it? And how much do you expect you could raise by selling those assets? So just trying to pick your base here on what will be the funding strategy for the project.
Thank you.
Fernando Hasenberg, CFO, CNPC: Thanks, Guilherme for your question. As we have mentioned before and very consistent with what Francisco just mentioned. We committed with the project and therefore we are working on building this financial plan. That is too soon to tell. It will depend on the cash flow generation in the coming months, the final decision.
But what I can tell you today is that we have a commitment to maintain a strong balance sheet through all the execution of the project. And I will build a financial structure that can support both the project, but also maintaining a strong balance sheet. And we’ll take all the measures to do that. In the meantime, we are doing some things. We changed the covenants of our local bonds in Chile.
We are working on some divestments. You we already communicate the sale of a non core asset in Chile. I will continue to work on that direction.
Guillermo Rosito, Analyst, Bank of America: That’s super clear. Thank you so much.
Fernando Hasenberg, CFO, CNPC: Thank you.
Moderator, CNPC: Thanks, Hilarme. Now we have a question from Marcelo Furlan from Itau. Marcelo, hi.
Marcelo Furlan, Analyst, Itau: Hi, everyone. Thanks for taking my question. I have two here. It’s actually a follow-up in the pulp segment. So I’d like to understand, how are you guys seeing, demand, going to Europe if it is expected separation of the Chinese market, if you have seen already some read through for for the European order books since you want.
So I’d like to to see how is the market there. How are you guys already seeing that? And my second point is related to cost. So we have seen softwood costs increasing in the in this quarter. So I’d like to understand for both soft and hardwood, what we could expect for the full year in terms of costs for this division?
So these are my two questions. Okay.
Guillermo Vieci, Chief Commercial Director, CNPC: Marcelo, thank you for the question. I’ll take the first part of it. Europe remains good. The demand in Europe is solid. North America is solid.
LatAm is also very good. China is the uncertain part of it. The only thing I would like to highlight is that China has bought fuel volume during March and very little volume from the market during April. That means that Chinese customers are, with their inventories, very low. The trade war has an impact on the Chinese exports, but the Chinese exports very little paper to The United States.
So it leads us to believe that the inventories of pulp from the Chinese paper producers are low, and they will eventually need to come back to the table to start buying. We expect in April now to sell full volumes that we have forecasted for China. Regarding
Raimundo Varela, CEO, CNPC: the second question, this is Raimundo Varella. Regarding the cost, we have been working over the last few years on our competitive program, and that is very focused on our forest cost and also on our industrial cost across all our supply chain, but of course, in our business, Forest and Industrial is extremely important. And you are seeing that our costs are actually coming down. So we still have room to keep improving our costs, and some of our programs have not yet delivered the full extent of what we expect. But we are happy with the progress, both in hardwood and in softwood.
In softwood, I think what happened is that in Q1 this year, had a long shutdown at our so on our maintenance at our Laja mill that is also going through some big repairs and because it’s an old mill. And therefore, that’s why the cost in softwood have not come down. But throughout the year, you should see also a cost improvement in softwood.
Marcelo Furlan, Analyst, Itau: Okay. Thank you so much, guys.
Moderator, CNPC: Thank you, Marcelo. The next question comes from Enrique Marquez, Goldman Sachs. Enrique, Enrique. Hello?
Enrique Marquez, Analyst, Goldman Sachs: Hi, everyone. Thanks for the time here. Quick question on Softy’s. The company has been struggling with the competitive landscape on the tissue business. And I know you’ve been mentioning for a while that target for margins is between 1520%.
I just want to understand if you still see as viable to recover to these levels during 2025? And also if you could comment on the impacts from Ontex and the first month of operation under CNPC, I think that would be great. And my second question is regarding leverage. Your leverage has been high for a couple of quarters. Your net debt has increased again this quarter.
And at the same time, you’ve recently announced the OnTEX acquisition. We’ve seen news regarding Synthesis interest on IP’s fluff business. I just want to understand what leverage ratio you feel comfortable operating, especially under this macro uncertainty scenario? So would be great to hear your thoughts on that. And what other options you’re thinking to deleverage?
Thank you.
Claudia, Investor Relations Officer, CNPC0: Enrique, thank you very much for your question. I’m Gonzalo. In terms of our margins, we still believe that we are going to recover in the last quarter of this year very close to the level of 2024. That is because we have been developing a lot of different strategy like our revenue growth management and reducing our costs, looking for more efficiency. So we believe that in the last quarter, we can see recovering our margins.
In terms of Ontex, I can tell to you that we are taking control of Ontex Brazil. We are going to run that business in a stand alone for the next, I will say, twelve, eighteen months. And that is because we strongly believe that we need time to understand their sales force process, their logistics process, etcetera. And then we are going to begin to integrate it and to capture all the efficiencies that we strongly believe that they’re very relevant for Softis.
Fernando Hasenberg, CFO, CNPC: JOSE Regarding your question about leverage, Enrique, I can share with you that we are as I mentioned before, we are very committed to maintaining our investment grade. We have a public leverage policy that state that we have to be between 2.5 times and 3.5 times net debt to EBITDA. So today, we are at the top of that range. And therefore, we are working on several initiatives to improve that. The sale of some asset is one initiative.
We are also working on some initiatives to improve working capital. And we are going to be very conscious also capital allocation in order to reduce and to bring that ratio probably to below three by the end of the year. That’s the goal.
Enrique Marquez, Analyst, Goldman Sachs: Thank you.
Moderator, CNPC: Thanks, Enrique. Next question comes from Eugenia Cavalhero, Morgan Stanley. Eugenia, hello.
Claudia, Investor Relations Officer, CNPC1: Hello, everyone. Good morning, and thank you for the space. I wanted to know if you could share a bit what’s your view for the outlook for the biopackaging segment and how you’re expecting demand and prices to evolve there? Thank you.
Francisco Ristagli, CEO, CNPC: Well, you, Kenya. This is Francisco Rustagli. Well, we are basically in three different businesses, in boxboard, sack kraft and corrugated paper and boxes. My view is that we have still a kind of a weak market around the world in terms of packaging. Is not probably the best moment.
So I see Vauxhall, which is our main product in biopackaging with a weaker demand during the last couple of months and very much connected with the economies of the world. This is the way we see that. We’re not running now the first quarter at the budget level. We’re a bit under the budget. And hope to recover that during the next the rest of the year, but it’s I would say it’s not clear.
And for the other business, sakura, still, we are very much in the Latin American markets and some exports to The United States. Those are our main markets. I would say still construction is affected. We are with a lot of we have a lot of influence from the cement industry. So still some weaknesses there.
I hope to recover those markets in the future, but still not the best. And in corrugated boxes, which is mainly domestic for us, we have been doing really well and we see good opportunities. We are very we have a lot we’re very involved in in in export products for this kind of industry, and and this is doing really well during this during the last quarter. And I believe this will continue in that way.
Claudia, Investor Relations Officer, CNPC1: That’s very clear. Thank you.
Francisco Ristagli, CEO, CNPC: You’re welcome.
Moderator, CNPC: Thank you, Eugenia. The next question comes from Alfonso Salazar, Scotiabank. Alfonso, your mic is open.
Claudia, Investor Relations Officer, CNPC2: Yes. Thank you. I have I think my question was already answered about softies, but just a follow-up for Gonzalo. Is it possible to have an outlook by country of the main countries where you operate? You know, how you see the outlook for demand on margins on a on a, you know, different across different countries?
The second question that I have is regarding non core asset sale that you still have may have in the portfolio. Do you anticipate, Are you considering for the asset sales for the rest of the year?
Claudia, Investor Relations Officer, CNPC0: Thank you, Alfonso. This is Gonzalo. In terms of our main markets, Brazil, of course, is one of the most important, as you know, in Brazil. Brazil, One of our competitors decided to increase in a very, I would say, dramatically the capacity. So we are in the moment of rebalancing the share that it will take 2025 and probably 2026 to rebalance the share.
And when that finalize that process, we are going to begin to see a little bit improving our the price level. That is in the case of Brazil. And in Mexico, as you know, that is the second main market that we are running our business. In Mexico, because of the Ontex acquisition that we did, we reinforced in a dramatically way our stop our one stop shopping. So we believe that we have a totally different portfolio to obtain advantage in the way that we run the business with our customers.
We acquired 33% of the market share in terms of Personal Care, and that is reinforcing all our logistic, all our business plan with our customer. So we believe that understanding that consumer income disposable income in the case of Mexico is compared with previous year is in a lower level. We believe that in the last quarter of this year, Mexico, are going to begin to recover our volume and our margins. Those are our main, main markets.
Fernando Hasenberg, CFO, CNPC: Regarding the second part of your question, Alfonso, as you probably will understand this, it’s hard to answer. But I can tell you that we are always looking at alternatives. And that’s part of our strategy 02/1930 and we are looking at different alternatives.
Claudia, Investor Relations Officer, CNPC2: Okay. That’s fair enough. Thank you.
Moderator, CNPC: Thank you, Alfonso. We have a question from Jurei Domit, Larenvial. Yuri, your mic is open. Think he’s not there. Next question comes from
Claudia, Investor Relations Officer, CNPC: Jose Ignacio Perez, BSAI. Jose?
Moderator, CNPC: Jose, your mic is open. Jose Ignacio Perez? Now it’s fine? No? Okay.
So we have another question that came through the chat box.
Claudia, Investor Relations Officer, CNPC: It’s related to from Constanza Gonzalez, Quest Capital. She asked for the pulp segment. And could you
Moderator, CNPC: tell us about the prices and volumes during April and expectations about the second quarter in prices and volume?
Guillermo Vieci, Chief Commercial Director, CNPC: Okay. Well, I’ll take that. Constanza, thank you for the question. I think I alluded to in my previous answer, it’s still May is still uncertain. April, we have sold our budgeted volume.
Perhaps I’ll giving a little bit of a forward looking in terms of our price. We believe that the competition in terms of pulp production, both in Europe and in North America, with the current price scenario are struggling. Euro has strengthened a lot. Swedish krona has strengthened a lot. That impacts countries that have major pulp productions in the world.
And with the current price scenario, they will inevitably be struggling. This cannot represent a sustainable scenario. Therefore, we believe the prices will start going up eventually once this market clears up this uncertainty. That’s our view for oil prices looking forward.
Claudia, Investor Relations Officer, CNPC: Thank
Moderator, CNPC: you. Thanks for your question, Constanza. Please recall that you can make your questions at this time, just raising your hand.
Claudia, Investor Relations Officer, CNPC: And we have another one in the chat box from Patria, Joao Mandaliti. Can you please elaborate more on the reasons behind anticipating the maintenance stoppage in Guaiba mill?
Raimundo Varela, CEO, CNPC: Joao. This is Raimundo. Thank you for your question. We did have a mechanical problem at our recovery boiler in Guaiba in April. And therefore, we had to anticipate our maintenance that was scheduled for late August and September this year, and we moved it to April to solve the problem we had, and we took advantage of that to do all the other maintenance that we had to do.
So therefore, in April, we produced less because we had to stop for fourteen days in Wahiba in the Line 2. But in September, we will not do the maintenance and therefore, we will recover the volume that we didn’t produce in April.
Francisco Ristagli, CEO, CNPC: Thank you.
Moderator, CNPC: Okay. I don’t see more questions.
Claudia, Investor Relations Officer, CNPC: So we can conclude this earnings call for now. We want
Moderator, CNPC: to thank you for attending today, and we wish you a good day.
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