SANTIAGO, Chile, Oct. 29 /PRNewswire-FirstCall/ -- MASISA S.A. (Santiago Stock Exchange: MASISA), (hereinafter referred to as "Masisa" or "the Company"), a leading furniture board manufacturing and marketing company in Latin America, today posted its consolidated financial statements for the third quarter of 2008.
THIRD QUARTER 2008 HIGHLIGHTS
-- Sales in the third quarter of 2008 were 15.5% up on the same quarter in 2007 amounting to US$286.1 million. They were mainly driven by (i) higher prices and volumes of MDF boards and higher prices in PB boards, and (ii) an increase in sawn lumber sales due to the company's strategic decision of reducing the exposure to the U.S. market and focusing on products with a higher margin and greater market diversification in its solid wood business unit. These higher sales were partially offset by lower sales of (i) MDF and finger-joint mouldings due to the production downscaling of such products on account of the slowdown of the U.S. real estate market and (ii) the loss of the OSB sales arising from the sale of the OSB mill to Louisiana Pacific in May this year.
-- The operating gross margin increased 7.5% from US$62.2 million in the third quarter of 2007 to US$66.8 million in the third quarter of 2008 on account of greater volume activity and higher prices. The operating margin on sales dropped from 25.1% in the third quarter of 2007 to 23.4% in the third quarter of 2008. Although the company has continued to apply moderate price increases to its MDF and PB boards, along with good commercial management of the product mix, the depreciation of local currencies and costs that have risen or remained at record high levels put downward pressure on the operating margin.
-- The sales and administrative expenses to sales ratio in the third quarter of 2008 remained stable and accounted for 13.6% of sales against the 13.5% of sales in the same period in 2007. The company is currently implementing cost reduction projects, which should reduce the sales and administrative expenses in 2009.
-- Operating income dropped slightly, amounting to US$27.8 million against the US$28.8 million in the third quarter of 2007.
-- Third quarter net income soared 88.2% over the same quarter in 2007 and amounted to US$13.2 million. This is mainly explained by the devaluation of the Brazilian real, which causes a favorable effect on the debt in U.S. dollars that the Company holds in its Brazilian affiliate.
-- Masisa sent a significant event to the Superintendency of Securities and Insurance (SVS) on October 8, informing that it has started a process to tender a sawmill it owns at Rio Negrinho in the state of Santa Catarina in Brazil. The sawmill has modern infrastructure and it has a production capacity of 220,000 cubic meters of sawn lumber a year. It also includes a finger-joint moulding line with a production capacity of 90,000 cubic meters a year and a co-generation plant with a capacity of 3,750 kVA. The company also informed that this tender envisages the option of receiving tie-in bids for the sawmill alone or this along with the company's forestry lands around the sawmill. Such forestry lands have a total approximate area of 13,113 hectares of lands and an approximate surface area of 7,252 hectares, mainly planted with Taeda pine, located in the state of Santa Catarina in Brazil. The tender process has already started and is expected to be completed with the final award in the last few days of December 2008 or early January 2009. Masisa has the right to declare the tender process void, if the bids fail to meet its expectations.
Quarter ended Sep 30, Dec 31, Mar 31, June 30, Sep 30, 2007 2007 2007 2008 2008 (expressed in millions of US$, except per share information as a %) Sales 247.7 259.7 257.6 278.6 286.1 Gross Margin 62.2 69.9 65.6 70.5 66.8 % of sales (1) 25.10% 26.90% 25.40% 25.30% 23.40% Sales & Administrative Expenses -33.4 -39.7 -35.1 -36.1 -39 % of sales (1) 13.50% 15.30% 13.60% 13.00% 13.60% Operating Income 28.8 30.2 30.4 34.4 27.8 % of sales (1) 11.60% 11.60% 11.80% 12.30% 9.70% EBITDA(2) 46.2 47.8 48.1 54.2 46.8 % of sales (1) 18.70% 18.40% 18.70% 19.50% 16.40% Net Income for the Period 7 14.6 11.5 3.3 13.2 (1): As a % of sales in the quarter. (2): EBITDA is Operating Income + Depreciation + Amortization + Depletion Forecasts and Estimates
This press release may contain forecasts which are different statements from historical facts or current conditions and include the management's current vision and estimates of future circumstances, industry conditions and the Company's performance. Some forecasts may be identified by the use of terms such as "may," "should," "anticipates," "believes," "estimates," "expects," "plans," "intends," "forecasts," and other similar expressions. Statements about future market share, projected future competitive strengths, the implementation of significant operating and financial strategies, the direction of future operation, and the factors or trends affecting financial conditions, liquidity or operating income, are examples of forecasts. Such statements reflect the current management vision and are subject to various risks and uncertainties. There is no guarantee that the expected events trends or results will actually occur. These statements are made based on many assumptions and factors including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could lead to the current results of Masisa and the projected Company activities to materially differ from current expectations.
About Masisa
Masisa is a leading furniture and interior architecture board production and marketing Company in Latin America. It owns forest assets in most of the region, thereby guaranteeing the raw material for its wood board business. Masisa's value proposal is to be a reliable brand, and a Company close to all its stakeholders, anticipating market needs by means of product and service innovation, and operating responsibly towards society and the environment.
Masisa has 13 production plants in Chile, Argentina, Brazil, Venezuela and Mexico, all of which will have the ISO 14,001 and OHSAS 18,001 certification. Masisa is currently building an MDP plant in Montenegro, Brazil that will have an annual production capacity of 750,000 cubic meters of MDP and an annual melaminating capacity of 300,000 cubic meters. This plant will be the Company's largest plant in Latin America, mainly for supply to the Brazilian market.
Masisa has three other divisions that operate in synergy with its core board division: forestry, solid wood, and retail.
Masisa is a publicly traded corporation and its shares are traded on the Santiago Stock Exchange. The Company had total sales of approximately US$ 966 million in 2007.
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