MOSCOW (MRC) -- Unipar’s earnings and net income fell sharply in 2022 despite an increase in sales on the back of higher costs for feedstocks, the Brazilian chemicals producer said this week.
The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA), the best metric to measure a company’s financial soundness, fell by nearly 16% to Brazilian reais (R) 3.16bn (USD605m).
In the fourth quarter of 2022 alone, EBITDA fell by more than 56%, year on year. The company's stock was down more than 7% on Tuesday afternoon trading, compared with the prior close, to R75.30/share.
Unipar produces polyvinyl chloride (PVC), caustic soda, vinyl chloride monomer (VCM), ethylene dichloride (EDC) and other chlorine derivatives, among others; its three main production facilities are in Cubatao and Santo Andre, Brazil, and Bahia Blanca in Argentina.
Capacity utilisation during 2022 rose, year on year, to 84%, said the company. In 2021, capacity utilisation stood at 78%. Unipar said 50% of its sales came from PVC, down from 62% in 2021. Sales of caustic soda amounted to 37% of the total, up from 26% in 2021, and sales of chlorine and tis derivatives stood at 13% of the revenue, practically unchanged from 2021.
By country, Unipar sales in Brazil in 2022 stood at R5.18bn (71.2% of the total) and at R2.09bn in Argentina, or 28.7% of the total. Speaking to reporters from the company’s headquarters in Sao Paulo on Tuesday, Unipar’s CFO said 2023 may also be a challenging year for earnings due to the woeful global economic environment.
“Costs for natural gas and ethylene went up sharply in 2022. For 2023, we expect a more challenging year, with more restricted prices and margins, expectations of high inflation globally, and continued economic and political instability in Argentina,” said Antonio Marcos Campos Rabello.
We remind, Unipar has recently appointed Marco Rabello as its new CFO and director of investor relations, the company announced. The new hire comes to strengthen the company's business model directly related to expansion on greenfield projects and acquisitions focusing on domestic and international markets. Unipar's new CFO began his career at Odebrecht Group companies including Novonor, where he held the same position for four years, and Ocyan, the new brand of the former Odebrecht Oil and Gas Company. Marco has also worked for other major corporations such as Braskem and will succeed Christian Schnitzlein, who has been in charge for the past seven years.