Petrochemicals - Brazil - Heringer reports Q3 loss of US$31.4mn

Brazilian fertilizer company Heringer reported a net loss of 72.3mn reais (US$31.4mn) in the third quarter 2008 compared to an 8.7mn-real net profit in the same period last year.

The loss was the result of the depreciation of the local currency, the real, against the dollar, Heringer said in a statement.

In January-September, net profits were down to 24.7mn reais from 46.3mn reais in the same nine months last year.

Net revenues reached 1.16bn reais in Q3, up 70% year-on-year.

Ebitda rose 370% to 92mn reais in July-September with an Ebitda margin of 7.9%. According to the company's investor relations director, Wilson Mardonado, the elevated Ebitda was due to improved revenues and higher prices.

Sales volume was down 7.5% in the quarter to 913,300t year-on-year as a result of seasonally low demand, which was higher in the first half.

In the third quarter, Heringer opened a plant in Paranaguá, Paraná state, with an investment of 140mn. The plant has capacity of 250,000t/y of simple superphosphate, used to produce fertilizer.

"We are concluding an important phase of investments, increasing our presence to all regions of the country," company CEO Dalton Carlos Heringer said in a webcast.

As a result, Heringer increased its share of the domestic market to 13.5% in Q3 from 12.1% a year earlier.

In July-September, the company also inaugurated two mixing facilities, one in Iguatama, Minas Gerais state, and the other in Catalão, Goiás state, each with production capacity of 150,000t/y.

For 2009, the company predicts raw material prices will decline, especially in the nitrogen fertilizers chain. "We are expecting a sharp drop in prices for nitrogen [fertilizers] and we are also focusing on reducing stock levels in the last quarter starting now," the CEO said.

"As a result of the global scenario, we are uncertain about the price of commodities next year, but we still expect an improved market for 2009 compared to 2008," Heringer said.

According to Heringer, despite the lack of credit Brazil's agriculture sector will remain strong.

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