OREANDA-NEWS. Leader in the manufacture and sale of nonwovens in Brazil with a significant presence in the Americas and operating globally, Companhia Providencia (BM&FBovespa:PRV13) announces third quarter net revenues of BRL 202.6 million, a year-on-year decrease of 4.0%. This result reflects the inefficiencies relating to the recovery in operations following the shutdown during the second quarter of the year.

Lower production levels during the period reduced Company revenue, basically a reflection of the partial stoppage of some production lines at the São José dos Pinhais (PR) facility on Ministry of Labor orders from April 1, 2014 until the Company was able to show compliance with regulatory norm NR-12. Although resumption of all equipment and machines occurred by the first week in July, there was some delay in ramping up plant operations to full capacity once more.

Sales volume amounted to 29.2 thousand tons, a reduction of 7.1% when compared with the third quarter in 2013. Company EBITDA reached BRL 15.8 million, a year-on-year decline of 60.6%. Adjusted EBITDA margin for the third quarter was 7.8%, 11.2 percentage points lower while gross profit was BRL 41.3 million, 23.8% less than the third quarter 2013 - in both cases again reflecting the resumption in operations at the São José dos Pinhais facility during the period.

"We successfully clawed back part of quarter's results albeit still strongly affected by the stoppage of our production lines at the São José do Pinhais operation", Companhia Providencia's CEO, Hermínio de Freitas declared. "In 3Q14, our focus was still on returning the lines to full operation."

The net financial result for the period was a negative BRL 9.7 million against a negative result of BRL 11.7 million for the same quarter in 2013. The balance is directly related to the foreign exchange translation effect on currency denominated assets and liabilities. Compared with the second quarter of the current year, the result was also directly influenced by currency rate variations and the realization of the costs of raising loans and settlement of financing. The effects of variation of dollar/Real exchange rates on Company debt is partially offset against the portfolio of clients billed in currency.

The Company reported a net loss of BRL 7.9 million, principally due to lower production volume and sales and related to increased costs relative to certain production inefficiencies. Net debt posted an increase of 17.6% compared with 2013, principally the result of a reduction in cash and cash equivalents during the quarter. There was an 11.2% variation in relation to the immediately preceding quarter.