Chilean industrial conglomerate Empresas Copec swung to a $31-million loss in the third quarter, the company said Thursday, dragged down by its forestry business that has been battered by floods, drought and forest fires.
The group’s quarterly revenue slipped 1% to $7.29 billion, reducing core earnings before interest, taxes, depreciation and amortization (EBITDA) by 35%.
Copec, which also has fishing and energy divisions, said it was hit by higher expenses linked to plant shutdowns and forest fires early this year, as well as higher financial costs, lower volumes and prices in its forestry division.
Copec’s earnings have slumped this year as prices for pulp, timber and wood panels fell and its forestry division sold less volume amid extreme weather.
Arauco, Copec’s forestry division and a major world supplier of wood pulp, saw its quarterly revenues shrink 15% from a year earlier and posted a net loss, hurt by a $75-million impairment from closing its Licancel plant in central Chile.
Arauco had shut the plant – which is responsible for 3% of its 2022 pulp output – in September citing “extreme climate variability,” including a severe storm that flooded the nearby river.
The unit’s EBITDA fell more than 50% to $282 million, but exceeded the $242 million forecast by analysts at Itau BBA.
Copec also noted that its Mapa pulp mill that recently came online should reach full capacity in the first half of next year.
Copec’s results come as regional economies factor in the El Nino weather phenomenon, which is expected to last at least through spring 2024, raising temperatures in the Pacific Ocean and bringing more extreme weather across the Americas.