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Form 6-K Fibria Celulose S.A. For: Apr 27

April 27, 2016 7:11 AM EDT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 


 

FORM 6-K

 


 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

 

Dated April 27, 2016

 

Commission File Number: 1-15018

 


 

Fibria Celulose S.A.

 


 

Fidêncio Ramos, 302 — 3rd and (part of) 4th floors

Edifício Vila Olímpia, Torre B, Bairro Vila Olímpia

04551-010, São Paulo, SP, Brazil

(Address of principal executive offices)

 


 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

 

Form 20-F:  x             Form 40-F:  o

 

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)):

 

Yes:  o             No:  x

 

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)):

 

Yes:  o             No:  x

 

(Indicate by check mark whether the registrant by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

 

Yes:  o            No:  x

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 

 

 


 


 

Fibria Celulose S.A.

Unaudited consolidated interim financial

information at March 31, 2016

and Report on Review of Interim

Financial Information

 

1



 

REPORT ON REVIEW OF CONSOLIDATED INTERIM FINANCIAL INFORMATION

 

To the Board of Directors and Shareholders

Fibria Celulose S.A

São Paulo — SP

 

Introduction

 

We have reviewed the accompanying consolidated interim accounting information of Fibria Celulose S.A., for the quarter ended March 31, 2016, comprising the balance sheet at that date and the statements of income and comprehensive income, the statements of changes in equity and cash flows for the three-month period then ended, and a summary of significant accounting policies and other explanatory information.

 

Management is responsible for the preparation of the consolidated interim accounting information in accordance with the Deliberation CVM 673/11 (which approved accounting standard CPC 21(R1) - Interim Financial Reporting), and International Accounting Standard (IAS) 34 - Interim Financial Reporting issued by the International Accounting Standards Board (IASB).   Our responsibility is to express a conclusion on this interim accounting information based on our review.

 

Scope of the review

 

We conducted our review in accordance with Brazilian and International Standards on Reviews of Interim Financial Information (Brazilian audit standard NBC TR 2410, wholly converged to ISRE 2410 — Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively).   A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.   A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.   Accordingly, we do not express an audit opinion.

 

Conclusion on the consolidated interim information

 

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim accounting information referred to above has not been prepared, in all material respects, in accordance with Deliberation CVM 673/11 and IAS 34.

 

São Paulo, April 26, 2016.

 

BDO RCS Auditores Independentes SS

CRC 2SP 013846/O-1

 

Eduardo Affonso de Vasconcelos

Accountant — CRC-1SP166001/O-3

 

Francisco de Paula dos Reis Júnior

Accountant CRC 1 SP 139268/O-6

 

2



 

Fibria Celulose S.A.

 

Unaudited consolidated interim balance sheet at

In thousands of Reais

 

Assets

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Current

 

 

 

 

 

Cash and cash equivalents (Note 7)

 

772,772

 

1,077,651

 

Marketable securities (Note 8)

 

835,595

 

1,411,864

 

Derivative financial instruments (Note 9)

 

69,654

 

26,795

 

Trade accounts receivable, net (Note 10)

 

630,253

 

742,352

 

Inventory (Note 11)

 

1,697,727

 

1,571,146

 

Recoverable taxes (Note 12)

 

807,112

 

462,487

 

Other assets

 

111,603

 

168,283

 

 

 

 

 

 

 

 

 

4,924,716

 

5,460,578

 

 

 

 

 

 

 

Non-current

 

 

 

 

 

Marketable securities (Note 8)

 

68,891

 

68,142

 

Derivative financial instruments (Note 9)

 

299,564

 

273,694

 

Related parties receivables (Note 14)

 

10,677

 

11,714

 

Recoverable taxes (Note 12)

 

767,761

 

1,511,971

 

Advances to suppliers

 

647,146

 

630,562

 

Judicial deposits (Note 20)

 

196,306

 

195,344

 

Deferred taxes (Note 13)

 

1,685,042

 

2,399,213

 

Assets held for sale (Note 1(b))

 

598,257

 

598,257

 

Other assets

 

89,378

 

92,714

 

 

 

 

 

 

 

Investments (Note 15)

 

127,639

 

137,771

 

Biological assets (Note 16)

 

4,154,419

 

4,114,998

 

Property, plant and equipment (Note 17)

 

10,233,385

 

9,433,386

 

Intangible assets (Note 18)

 

4,612,877

 

4,505,634

 

 

 

 

 

 

 

 

 

23,491,342

 

23,973,400

 

 

 

 

 

 

 

Total assets

 

28,416,058

 

29,433,978

 

 

3



 

Fibria Celulose S.A.

 

Unaudited consolidated interim balance sheet at

In thousands of Reais (continued)

 

 

 

March 31,
2016

 

December 31,
2015

 

Liabilities and shareholders’ equity

 

 

 

 

 

Current

 

 

 

 

 

Loans and financing (Note 19)

 

777,540

 

1,072,877

 

Derivative financial instruments (Note 9)

 

233,517

 

302,787

 

Trade payables

 

604,805

 

668,017

 

Payroll, profit sharing and related charges

 

95,989

 

170,656

 

Taxes payable

 

131,270

 

564,439

 

Dividends payable

 

89,302

 

86,288

 

Other payables

 

229,208

 

90,235

 

 

 

 

 

 

 

 

 

2,161,631

 

2,955,299

 

 

 

 

 

 

 

Non-current

 

 

 

 

 

Loans and financing (Note 19)

 

10,720,860

 

11,670,955

 

Derivative financial instruments (Note 9)

 

624,099

 

825,663

 

Deferred taxes (Note 13)

 

245,301

 

270,996

 

Provision for legal proceeds (Note 20)

 

175,817

 

165,325

 

Liabilities related to the assets held for sale (Note 1(b))

 

477,000

 

477,000

 

Other payables

 

236,411

 

253,420

 

 

 

 

 

 

 

 

 

12,479,488

 

13,663,359

 

 

 

 

 

 

 

Total liabilities

 

14,641,119

 

16,618,658

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

Share capital

 

9,729,006

 

9,729,006

 

Share capital reserve

 

7,426

 

15,474

 

Treasury shares

 

(10,378

)

(10,378

)

Statutory reserves

 

1,632,588

 

1,639,901

 

Other reserves

 

1,378,365

 

1,378,365

 

Retained earnings

 

975,266

 

 

 

 

 

 

 

 

 

Equity attributable to shareholders of the Company

 

13,712,273

 

12,752,368

 

 

 

 

 

 

 

Equity attributable to non-controlling interests

 

62,666

 

62,952

 

 

 

 

 

 

 

Total shareholders’ equity

 

13,774,939

 

12,815,320

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

28,416,058

 

29,433,978

 

 

The accompanying notes are an integral part of these unaudited consolidated interim financial information.

 

4



 

Fibria Celulose S.A.

 

Unaudited consolidated interim statement of profit or loss

In thousands of Reais, except for the income per shares

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Revenues (Note 21)

 

2,394,759

 

1,997,066

 

Cost of sales (Note 23)

 

(1,419,828

)

(1,272,265

)

 

 

 

 

 

 

Gross profit

 

974,931

 

724,801

 

 

 

 

 

 

 

Selling expenses (Note 23)

 

(109,937

)

(95,331

)

General and administrative (Note 23)

 

(64,375

)

(64,104

)

Equity in results of joint-venture

 

(506

)

790

 

Other operating income and expense, net (Note 23)

 

(10,042

)

(29,259

)

 

 

 

 

 

 

 

 

(184,860

)

(187,904

)

 

 

 

 

 

 

Income before financial income and expenses

 

790,071

 

536,897

 

 

 

 

 

 

 

Financial income (Note 22)

 

56,275

 

36,542

 

Financial expenses (Note 22)

 

(170,048

)

(110,430

)

Result of derivative financial instruments, net (Note 22)

 

282,403

 

(548,797

)

Foreign exchange loss and indexation charges, net (Note 22)

 

752,937

 

(1,123,125

)

 

 

 

 

 

 

 

 

921,567

 

(1,745,810

)

 

 

 

 

 

 

Income (loss) before income taxes

 

1,711,638

 

(1,208,913

)

 

 

 

 

 

 

Income taxes

 

 

 

 

 

Current (Note 13)

 

(42,114

)

(59,858

)

Deferred (Note 13)

 

(691,512

)

702,778

 

 

 

 

 

 

 

Net income (loss) for the period

 

978,012

 

(565,993

)

 

 

 

 

 

 

Attributable to

 

 

 

 

 

Shareholders of the Company

 

975,266

 

(569,360

)

 

 

 

 

 

 

Non-controlling interest

 

2,746

 

3,367

 

 

 

 

 

 

 

Net income (loss) for the period

 

978,012

 

(565,993

)

 

 

 

 

 

 

Basic earnings (loss) per share (in Reais) (Note 24(a))

 

1.76

 

(1.03

)

 

 

 

 

 

 

Diluted earnings (loss) per share (in Reais) (Note 24(b))

 

1.76

 

(1.03

)

 

The accompanying notes are an integral part of these unaudited consolidated interim financial information.

 

5



 

Fibria Celulose S.A.

Unaudited consolidated interim statement of comprehensive income

In thousands of Reais, except for the income per shares

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Net income (loss) for the period

 

978,012

 

(565,993

)

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

Items that may be subsequently reclassified to profit or loss

 

 

 

 

 

Foreign exchange effect on available-for-sale financial assets — Ensyn

 

(11,080

)

14,071

 

Tax effect thereon

 

3,767

 

(4,784

)

 

 

 

 

 

 

Total other comprehensive income (loss) for the period, net of taxes

 

(7,313

)

9,287

 

 

 

 

 

 

 

Total comprehensive income (loss) for the period, net of taxes

 

970,699

 

(556,706

)

 

 

 

 

 

 

Attributable to

 

 

 

 

 

Shareholders of the Company

 

967,953

 

(560,073

)

 

 

 

 

 

 

Non-controlling interest

 

2,746

 

3,367

 

 

 

 

 

 

 

 

 

970,699

 

(556,706

)

 

The accompanying notes are an integral part of these unaudited consolidated interim financial information.

 

6



 

Fibria Celulose S.A.

 

Unaudited interim statement of changes in shareholders’ equity

In thousands of Reais, unless otherwise indicated

 

 

 

Capital

 

 

 

 

 

Other reserves

 

Statutory reserves

 

 

 

 

 

 

 

 

 

 

 

Capital

 

Share
issuance
costs

 

Capital
reserve

 

Treasury
shares

 

Other
comprehensive
income

 

Legal

 

Investments

 

Additional
dividends
proposed

 

Retained
earnings
(accumulated
deficit)

 

Total

 

Non-
controlling
interest

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2014

 

9,740,777

 

(11,771

)

3,920

 

(10,346

)

1,613,312

 

311,579

 

2,916,566

 

 

 

 

 

14,564,037

 

51,668

 

14,615,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(569,360

)

(569,360

)

3,367

 

(565,993

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

9,287

 

 

 

 

 

 

 

 

 

9,287

 

 

 

9,287

 

 

 

 

 

 

 

 

 

 

 

9,287

 

 

 

 

 

 

 

(569,360

)

(560,073

)

3,367

 

(556,706

)

Transactions with shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock option program

 

 

 

 

 

300

 

 

 

 

 

 

 

 

 

 

 

 

 

300

 

 

 

300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at March 31, 2015

 

9,740,777

 

(11,771

)

4,220

 

(10,346

)

1,622,599

 

311,579

 

2,916,566

 

 

 

(569,360

)

14,004,264

 

55,035

 

14,059,299

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2015

 

9,740,777

 

(11,771

)

15,474

 

(10,378

)

1,639,901

 

328,689

 

830,945

 

218,731

 

 

 

12,752,368

 

62,952

 

12,815,320

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

975,266

 

975,266

 

2,746

 

978,012

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

(7,313

)

 

 

 

 

 

 

 

 

(7,313

)

 

 

(7,313

)

 

 

 

 

 

 

 

 

 

 

(7,313

)

 

 

 

 

 

 

975,266

 

967,953

 

2,746

 

970,699

 

Transactions with shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock option program

 

 

 

 

 

(8,048

)

 

 

 

 

 

 

 

 

 

 

 

 

(8,048

)

 

 

(8,048

)

Additional dividends declared - non-controlling interest - Portocel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,032

)

(3,032

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2015

 

9,740,777

 

(11,771

)

7,426

 

(10,378

)

1,632,588

 

328,689

 

830,945

 

218,731

 

975,266

 

13,712,273

 

62,666

 

13,774,939

 

 

The accompanying notes are an integral part of these unaudited consolidated interim financial information.

 

7



 

Fibria Celulose S.A.

 

Unaudited consolidated interim statement of cash flows

In thousands of Reais

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Income (loss) before income taxes

 

1,711,638

 

(1,208,913

)

 

 

 

 

 

 

Adjusted by

 

 

 

 

 

Depreciation, depletion and amortization

 

429,091

 

433,779

 

Depletion of timber resources from forestry partnership programs

 

13,910

 

14,043

 

Foreign exchange losses, net

 

(752,937

)

1,123,125

 

Change in fair value of derivative financial instruments

 

(282,403

)

548,797

 

Equity in results of joint-venture

 

506

 

(790

)

Loss on disposal of property, plant and equipment and biological assets, net

 

5,071

 

3,488

 

Interest and gain/losses from marketable securities

 

(34,864

)

(14,046

)

Interest expense

 

128,594

 

98,961

 

Impairment of recoverable taxes - ICMS, net

 

17,300

 

19,784

 

Stock option program

 

(8,048

)

300

 

Provisions and other

 

4,120

 

(1,164

)

 

 

 

 

 

 

Decrease (increase) in assets

 

 

 

 

 

Trade accounts receivable

 

69,247

 

39,857

 

Inventory

 

(87,112

)

(115,083

)

Recoverable taxes

 

382,465

 

(54,586

)

Other assets/advances to suppliers

 

43,373

 

26,254

 

 

 

 

 

 

 

Increase (decrease) in liabilities

 

 

 

 

 

Trade payables

 

(60,133

)

(61,634

)

Taxes payable

 

(468,056

)

(16,631

)

Payroll, profit sharing and related charges

 

(74,668

)

(58,366

)

Other payables

 

132,235

 

9,544

 

 

 

 

 

 

 

Cash provided by operating activities

 

1,169,329

 

786,719

 

 

 

 

 

 

 

Interest received

 

56,055

 

16,635

 

Interest paid

 

(87,421

)

(65,755

)

Income taxes paid

 

(4,578

)

(8,307

)

 

 

 

 

 

 

Net cash provided by operating activities

 

1,133,385

 

729,292

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Acquisition of property, plant and equipment and intangible assets and forests

 

(1,403,209

)

(340,075

)

Advances for acquisition of timber from forestry partnership program

 

(33,275

)

(16,041

)

Subsidiary incorporation - Fibria Innovations

 

 

 

(11,630

)

Marketable securities, net

 

554,329

 

25,780

 

Capital increase on joint-venture

 

(2,620

)

 

 

Proceeds from sale of property, plant and equipment

 

1,704

 

4,374

 

Derivative transactions settled (Note 9(c))

 

(57,161

)

(43,569

)

Others

 

 

 

(10

)

 

 

 

 

 

 

Net cash used in investing activities

 

(940,232

)

(381,171

)

 

8



 

Fibria Celulose S.A.

 

Unaudited consolidated interim statement of cash flows

 

 

In thousands of Reais (continued)

 

 

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Borrowings

 

398,816

 

139,455

 

Repayments of principal

 

(843,078

)

(456,237

)

Dividends paid

 

(18

)

 

 

Others

 

1,108

 

3,603

 

 

 

 

 

 

 

Net cash used in financing activities

 

(443,172

)

(313,179

)

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(54,860

)

70,664

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

(304,879

)

105,606

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

1,077,651

 

461,067

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

772,772

 

566,673

 

 

The accompanying notes are an integral part of these unaudited consolidated interim financial information.

 

9



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

1                                        Operations and current developments

 

(a)                                General information

 

Fibria Celulose S.A. is incorporated under the laws of the Federal Republic of Brazil, as a publicly-held company. Fibria Celulose S.A. and its subsidiaries are referred to in this consolidated interim financial information as the “Company”, “Fibria”, or “we”. We have the legal status of a share corporation, operating under Brazilian corporate law. Our headquarter and principal executive officers are located in São Paulo, SP, Brazil.

 

We are listed on the stock exchange of São Paulo (BM&FBOVESPA) and the New York Stock Exchange (NYSE) and we are subject to the reporting requirements of the Brazilian Comissão de Valores Mobiliários (CVM) and the United States Securities and Exchange Commission (SEC).

 

Our activities are focused on the growth of renewable and sustainable forests and the manufacture and sale of bleached eucalyptus kraft pulp. Forests in formation are located in the States of São Paulo, Mato Grosso do Sul, Minas Gerais, Rio de Janeiro, Espírito Santo, Bahia and Rio Grande do Sul.

 

We operate in a single operating segment, which is the producing and selling of short fiber pulp, with our pulp production facilities located in the cities of Aracruz (State of Espírito Santo), Três Lagoas (State of Mato Grosso do Sul), Jacareí (State of São Paulo) and Veracel (State of Bahia) (jointly- controlled entity).

 

The pulp produced for export is delivered to customers by sea vessels on the basis of long-term contracts with the owners of these vessels, through the ports of Santos, located in the State of São Paulo (operated under a concession from Federal Government until 2017) and Barra do Riacho, located in the State of Espírito Santo (operated by our subsidiary Portocel - Terminal Especializado Barra do Riacho S.A.).

 

On December 9, 2015, we participated in the public auction nº 03/2015, promoted by “Agência Nacional de Transportes Aquaviários - ANTAQ”, a regulatory agency, for the leasing of the public areas and infrastructures for handling and storage of paper, pulp and general cargo, for 25 years (renewable for 25 years). The Company was awarded the contract based on its proposal for the Macuco Terminal (STS07), located in the port of Santos, State of São Paulo, in the amount of R$ 115,047, which the approval of the public auction and the adjudication were published in the Federal Official Gazette on March 2, 2016.

 

With the approval of the result and based on the standards ICPC 01 (R1) / IFRIC 12 - Service Concession Arrangements and OCPC 05 - Concession Contracts, the subsidiary Fibria Terminal de Celulose de Santos SPE S.A., recently incorporated by the Company for the administration of Macuco Terminal, recognized the amount of R$ 115,047 related to the grant concession rights into the group of “Intangible assets”, which will be amortized over the concession period, against an accounting payable for ANTAQ, recorded under “Other payables”, as current liabilities. The payment was made on April 14, 2016.

 

The main investments according to the contract include:

 

(i)        a new storage facility, handling and transshipment of cargo equipment, with static capacity of 75,000 tons at least, ensuring the movement of 1,800,000 tons of pulp bales per year; and,

 

(ii)     the implementation of new railway lines for access to port facilities.

 

10



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

The startup of the Terminal is expected for the second semester of 2017.

 

(b)                                Non-current assets held for sale

 

Losango project assets

 

On December 28, 2012, the Company and CMPC Celulose Riograndense Ltda. (“CMPC”) signed the definitive Purchase and Sale Agreement for the sale of all of the Losango project assets, comprising approximately 100 thousand hectares of land owned by Fibria and approximately 39 thousand hectares of planted eucalyptus and leased land, all located in the State of Rio Grande do Sul, in the amount of R$ 615 million.

 

Was received in advance the amount of R$ 477 million, recognized under “Advances received in relation to assets held for sale”. Another installment, amounting to R$ 140 million, was deposited in an escrow account and will be released to us once additional government approvals are obtained. In case of the approvals is not obtained after the period of 96 months, will be returned to CMPC the amount paid to us, plus interest and the escrow deposits made by CMPC will revert.

 

Since the signing of agreement with CMPC, we have taken action to obtain the approvals needed, such as the fulfillment of all conditions precedent, the partial renewal of the area operating license and filing the documentation required by the government agencies. We are confident that approval will be granted.

 

We have concluded that these assets should remain classified as “assets held for sale” as non-current assets as at March 31, 2016. However, the completion of the sale is not under our sole control and depends on various government approvals, which have been slower than expected.

 

The Losango assets did not generate any significant impact in the three-month period ended March 31, 2016 and 2015, since that at this moment, the result of the transaction has not been recognized.

 

(c)                                 Approval of the expansion plan of the Três Lagoas Unit

 

On May 14, 2015, the Board of Directors approved the Horizonte 2 Project for the construction of the second Três Lagoas pulp production line.

 

The Horizonte 2 Project, the construction of which has already started, consists of a new bleached eucalyptus pulp production line with a capacity of 1.85 million tons per year and an estimated investment of US$ 2.2 billion. The startup of the line is projected for the fourth quarter of 2017. Virtually all Horizonte 2 Project supply agreements for delivery and installation of equipment and related services had been contracted.

 

The Project is being financed from the Company’s operating cash flows and financing agreements under negotiation with financial institutions.

 

2                                        Presentation of consolidated interim financial information and summary of significant accounting policies

 

2.1                              Consolidated interim financial information - basis of preparation

 

The consolidated interim financial information have been prepared under the historical cost convention, as modified by available-for-sale financial assets, other assets and financial liabilities (including

 

11



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

derivative instruments) measured at fair value.

 

(a)                                Accounting policies adopted

 

The consolidated interim financial information has been prepared and is being presented in accordance with IAS 34 and Deliberation 673/11 issued by the Brazilian Securities and Exchange Commission (CVM), which approved the CPC 21(R1) - “Interim Financial Reporting” as issued by the International Accounting Standards Board (IASB) and the Accounting Statements Committee Standards (CPC), and disclose all (and only) the applicable significant information related to the financial statements, which is consistent with the information utilized by management in the performance of its duties.

 

The consolidated interim financial information should be read in conjunction with the audited financial statements for the year ended December 31, 2015, considering that its purpose is to provide an update on the activities, events and significant circumstances in relation to those presented in the annual financial statements.

 

The current accounting practices, which include the measurement principles for the recognition and valuation of the assets and liabilities, the calculation methods used in the preparation of this interim financial information and the estimates used, are the same as those used in the preparation of the most recent annual financial statements, except for the items related to the adoption of the new standards, amendments and interpretations issued by IASB and CVM, as detailed in Note 3 below.

 

(b)                                Approval of the consolidated interim financial information

 

The consolidated unaudited interim financial information was approved by the Board of Directors on April 26, 2016.

 

2.2                              Critical accounting estimates and assumptions

 

Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates will seldom match the actual results. In the three-month period ended March 31, 2016, there were no significant changes in the estimates and assumptions which are likely to result in significant adjustments to the carrying amounts of assets and liabilities during the current period, compared to those disclosed in Note 3 to our most recent annual financial statements.

 

3                                        New standards, amendments and interpretations issued by IASB and CVM

 

The standards below have been issued and are effectives for future periods, as from January 1, 2018. We have not early adopted these standards.

 

12



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

Standard

 

Effective
date

 

Main points introduced by the 
standard

 

Impacts of the
adoption

IFRS 9 - Financial Instruments

 

January 1, 2018

 

The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change which is due to an entity’s own credit risk is recorded in Other comprehensive income rather than the Statement of profit or loss.

 

The Company is currently assessing the impacts of the adoption.

IFRS 15 - Revenue recognition

 

January 1, 2018

 

This accounting standard establishes the accounting principles to determine and measure revenue and when the revenue should be recognized.

 

The Company is currently assessing the impacts of the adoption.

IFRS 16 - Leases

 

January 1, 2019

 

This accounting standard replaces the previous leases standard, IAS 17 Leases, and related interpretations and sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, i.e., the customers (‘lessees’) and the suppliers (‘lessor’).
Lessees are required to recognize a lease liability reflecting future lease payments and a ‘right-of-use asset’ for virtually all lease contracts, except for certain short-term leases and leases of low-value assets. For lessors, the accounting stays almost the same and continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.

 

The Company is currently assessing the impacts of the adoption.

 

There are no other IFRSs or IFRIC interpretations that are not yet effective that the Company expect to have a material impact on the Company’s financial position and results of operations.

 

4                                        Risk management

 

The risk management policies and financial risk factors disclosed in the annual financial statements (Note 4) as at December 31, 2015 did not show any significant changes. The Company’s financial liabilities which present liquidity risk are presented below by maturity (Note 4.1), exchange risk exposure (Note 4.2), sensitivity analysis (Note 5) and fair value estimates (Note 6), which was considered relevant by Fibria’s management to be accompanied quarterly.

 

4.1                              Liquidity risk

 

The table below presents the financial liabilities into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows and as such they differ from the amounts presented in the consolidated balance sheet.

 

13



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
 financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

 

 

Less than
one year

 

Between
one and
two years

 

Between
two and
five years

 

Over five 
years

 

 

 

 

 

 

 

 

 

 

 

At March 31, 2016

 

 

 

 

 

 

 

 

 

Loans and financing

 

1,012,607

 

3,630,493

 

6,751,637

 

2,581,292

 

Derivative instruments

 

226,184

 

382,481

 

615,821

 

 

 

Trade and other payables

 

834,014

 

58,136

 

40,922

 

33,544

 

 

 

 

 

 

 

 

 

 

 

 

 

2,072,805

 

4,071,110

 

7,408,380

 

2,614,836

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2015

 

 

 

 

 

 

 

 

 

Loans and financing

 

1,358,138

 

4,451,707

 

7,326,394

 

2,817,802

 

Derivative instruments

 

319,954

 

560,572

 

902,136

 

 

 

Trade and other payables

 

758,252

 

68,327

 

44,902

 

39,556

 

 

 

 

 

 

 

 

 

 

 

 

 

2,436,344

 

5,080,606

 

8,273,432

 

2,857,358

 

 

4.2                              Foreign exchange risk

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Assets in foreign currency

 

 

 

 

 

Cash and cash equivalents (Note 7)

 

764,604

 

1,068,180

 

Trade accounts receivable (Note 10)

 

544,247

 

674,224

 

 

 

 

 

 

 

 

 

1,308,851

 

1,742,404

 

 

 

 

 

 

 

Liabilities in foreign currency

 

 

 

 

 

Loans and financing (Note 19)

 

8,999,763

 

10,215,115

 

Trade payables

 

67,820

 

76,304

 

Derivative financial instruments (Note 9(a))

 

727,897

 

1,081,533

 

 

 

 

 

 

 

 

 

9,795,480

 

11,372,952

 

 

 

 

 

 

 

Liability exposure

 

(8,486,629

)

(9,630,548

)

 

5                                        Sensitivity analysis

 

Sensitivity analysis of changes in foreign currency

 

The evaluation of the Company’s significant risk factor of the U.S. Dollar exposure uses the period of three months, consistent with our policy. We considered as the probable scenario the fair value considering the market yield as at March 31, 2016.

 

The probable scenario is the closing exchange rate at the date of these consolidated interim financial information (R$ x USD = 3.5589). As the amounts have already been recognized in the consolidated financial statement, there are no additional effects in the Statement of profit or loss in this scenario. In the “Possible” and “Remote” scenarios, the U.S. Dollar is deemed to appreciate/depreciate by 25% and 50%, before tax, when compared to the “Probable” scenario:

 

14



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

 

 

Impact of an appreciation/depreciation of the real
against the U.S. Dollar
on the fair value - absolute amounts

 

 

 

Possible (25%)

 

Remote (50%)

 

 

 

 

 

 

 

Derivative financial instruments

 

738,593

 

1,534,601

 

Loans and financing

 

2,085,345

 

4,170,690

 

Cash and cash equivalents

 

147,724

 

295,447

 

 

Sensitivity analysis in changes in interest rate

 

We adopted as the probable scenario the fair value considering the market yield as at March 31, 2016. As the amounts have already been recognized in the consolidated interim financial information, there are no additional effects in the Statement of profit or loss in this scenario. In the “Possible” and “Remote” scenarios, the interest rates are deemed to increase/decrease by 25% and 50%, respectively, before tax, when compared to the “Probable” scenario:

 

 

 

Impact of an increase/decrease of the interest rate
on the fair value - absolute amounts

 

 

 

Possible (25%)

 

Remote (50%)

 

 

 

 

 

 

 

Loans and financing

 

 

 

 

 

LIBOR

 

495

 

1,088

 

Currency basket

 

1,920

 

3,837

 

TJLP

 

1,658

 

3,292

 

Interbank Deposit Certificate (CDI)

 

1,498

 

2,956

 

 

 

 

 

 

 

Derivative financial instruments

 

 

 

 

 

LIBOR

 

45

 

10,480

 

TJLP

 

8,965

 

7,540

 

Interbank Deposit Certificate (CDI)

 

48,664

 

82,627

 

 

 

 

 

 

 

Marketable securities (a)

 

 

 

 

 

Interbank Deposit Certificate (CDI)

 

2,938

 

5,678

 

 


(a)           Only marketable securities indexed to post-fixed rate were considered in the sensitivity analysis above.

 

Sensitivity analysis in changes in the United States Consumer Price Index - US-CPI

 

To calculate the “Probable” scenario, we used the US-CPI index at March 31, 2016. The “Probable” scenario was stressed considering an additional increase/decrease of 25% and 50% in the US-CPI.

 

 

 

Impact of an appreciation of the
US-CPI at the fair value - absolute amounts

 

 

 

Possible (25%)

 

Remote (50%)

 

 

 

 

 

 

 

Embedded derivative in forestry partnership and standing timber supply agreements

 

117,820

 

242,298

 

 

15



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

6             Fair value estimates

 

In the three-month period ended March 31, 2016, there were no changes in the criteria of classification of the assets and liabilities in the levels of the fair value hierarchy when compared to the criteria used in the classification of those instruments disclosed in Note 6 to our most recent annual financial statements as at December 31, 2015.

 

 

 

March 31, 2016

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

 

 

 

 

 

 

 

 

 

 

Recurring fair value measurements

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

At fair value through profit and loss

 

 

 

 

 

 

 

 

 

Derivative financial instruments (Note 9)

 

 

 

369,218

 

 

 

369,218

 

Warrant to acquire Ensyn’s shares (Note 15)

 

 

 

 

 

16,228

 

16,228

 

Marketable securities (Note 8)

 

44,673

 

784,677

 

 

 

829,350

 

 

 

 

 

 

 

 

 

 

 

Available for sale financial assets

 

 

 

 

 

 

 

 

 

Other investments — fair value method - Ensyn (Note 15)

 

 

 

 

 

108,546

 

108,546

 

 

 

 

 

 

 

 

 

 

 

Biological asset (Note 16)

 

 

 

 

 

4,154,419

 

4,154,419

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

44,673

 

1,153,895

 

4,279,193

 

5,477,761

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

At fair value through profit and loss

 

 

 

 

 

 

 

 

 

Derivative financial instruments (Note 9)

 

 

 

(857,616

)

 

 

(857,616

)

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 

(857,616

)

 

 

(857,616

)

 

 

 

December 31, 2015

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

 

 

 

 

 

 

 

 

 

 

Recurring fair value measurements

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

At fair value through profit and loss

 

 

 

 

 

 

 

 

 

Derivative financial instruments (Note 9)

 

 

 

300,489

 

 

 

300,489

 

Warrant to acquire Ensyn’s shares (Note 15)

 

 

 

 

 

11,949

 

11,949

 

Marketable securities (Note 8)

 

40,364

 

1,365,478

 

 

 

1,405,842

 

 

 

 

 

 

 

 

 

 

 

Available for sale financial assets

 

 

 

 

 

 

 

 

 

Other investments — fair value method - Ensyn (Note 15)

 

 

 

 

 

125,071

 

125,071

 

 

 

 

 

 

 

 

 

 

 

Biological asset (Note 16)

 

 

 

 

 

4,114,998

 

4,114,998

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

40,364

 

1,665,967

 

4,252,018

 

5,958,349

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

At fair value through profit and loss

 

 

 

 

 

 

 

 

 

Derivative financial instruments (Note 9)

 

 

 

(1,128,450

)

 

 

(1,128,450

)

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 

(1,128,450

)

 

 

(1,128,450

)

 

There were no transfers between levels 1, 2 and 3 during the periods presented.

 

16



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

6.1          Fair value of loans and financing

 

The fair value of loans and financing, which are measured at amortized cost in the balance sheet, is estimated as follows: (a) bonds, for which fair value is based on the observed quoted price in the market (based on an average of closing prices provided by Bloomberg), and (b) for the other financial liabilities that do not have a secondary market, or for which the secondary market is not active, fair value is estimated by discounting the future contractual cash flows by current market interest rates, also considering the Company’s credit risk. The fair value of loans and financing are classified as Level 2 on the fair value hierarchy. The following table presents the fair value of loans and financing:

 

17



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

 

 

Yield used
to discount (*)

 

March 31, 
2016

 

December 31, 
2015

 

 

 

 

 

 

 

 

 

Quoted in the secondary market

 

 

 

 

 

 

 

In foreign currency

 

 

 

 

 

 

 

Bonds - VOTO IV

 

 

 

347,648

 

387,939

 

Bonds - Fibria Overseas

 

 

 

2,080,633

 

2,237,193

 

Estimated based on discounted cash flow

 

 

 

 

 

 

 

In foreign currency

 

 

 

 

 

 

 

Export credits (Pre-payments)

 

LIBOR USD

 

5,800,602

 

6,831,364

 

Export credits (ACC/ACE)

 

DDI

 

 

 

46,445

 

In local currency

 

 

 

 

 

 

 

BNDES — TJLP

 

Brazilian interbank rate (DI 1)

 

815,442

 

809,793

 

BNDES — Fixed rate

 

Brazilian interbank rate (DI 1)

 

107,000

 

107,797

 

BNDES — Selic

 

Brazilian interbank rate (DI 1)

 

13,530

 

11,110

 

Currency basket

 

Brazilian interbank rate (DI 1)

 

541,284

 

549,246

 

CRA

 

Brazilian interbank rate (DI 1)

 

665,827

 

658,573

 

FINEP

 

Brazilian interbank rate (DI 1)

 

2,016

 

2,063

 

FINAME

 

Brazilian interbank rate (DI 1)

 

3,886

 

4,951

 

NCE in Reais

 

Brazilian interbank rate (DI 1)

 

691,160

 

694,859

 

Midwest Fund

 

Brazilian interbank rate (DI 1)

 

19,047

 

21,303

 

 

 

 

 

 

 

 

 

 

 

 

 

11,088,075

 

12,362,636

 

 


(*) Used to calculate the present value of the loans.

 

6.2          Fair value measurement of derivative
financial instruments (including embedded derivative)

 

The Company estimates the fair value of its derivative financial instruments and acknowledges that it may differ from the amounts payable/receivable in the event of early settlement of the instrument. This difference results from factors such as liquidity, spreads or the intention of early settlement from the counterparty, among others. The amounts estimated by management are also compared with the Mark-to-Market (MtM) provided as reference by the banks (counterparties) and with the estimates performed by an independent financial advisor.

 

A summary of the methodologies used for purposes of determining fair value by type of instrument is presented below.

 

·    Swap contracts - the present value of both the asset and liability legs are estimated through the discount of forecasted cash flows using the observed market interest rate for the currency in which the swap is denominated, considering both of Fibria’s and counterpart credit risk. The contract fair value is the difference between the asset and liability. Only exception is the TJLP x US$ swap, where the cash flow of the asset leg (TJLP x fixed) are projected using a stable yield, as current TJLP value, during the duration of the swap contract, obtained from Banco Nacional de Desenvolvimento Econômico e Social (“BNDES”).

 

·    Options (Zero Cost Collar) - the fair value was calculated based on the Garman-Kohlhagen model, considering both of Fibria’s and counterpart credit risk. Volatility information and interest rates are observable and obtained from BM&FBOVESPA exchange information to calculate the fair values.

 

·    Swap US-CPI - the cash flow of the liability position is projected using the yield of the US-CPI index, obtained through the implicit rates in the American titles indexed to the inflation rate (TIPS), issued by the Bloomberg. The cash flow of the asset position is projected using the fixed rate established in

 

18



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

the embedded derivative instrument. The fair value of the embedded derivative instrument is the present value of the difference between both positions.

 

The yield curves used to calculate the fair value in March 31, 2016 are as follows:

 

Interest rate curves

 

 

 

 

 

Brazil

 

United States

 

Dollar coupon

 

Vertex

 

Rate (p.a.) - %

 

Vertex

 

Rate (p.a.) - %

 

Vertex

 

Rate (p.a.) - %

 

1M

 

14.14

 

1M

 

0.41

 

1M

 

11.14

 

6M

 

14.03

 

6M

 

0.68

 

6M

 

4.30

 

1Y

 

13.80

 

1Y

 

0.74

 

1Y

 

3.81

 

2Y

 

13.78

 

2Y

 

0.84

 

2Y

 

3.47

 

3Y

 

13.89

 

3Y

 

0.96

 

3Y

 

3.50

 

5Y

 

13.92

 

5Y

 

1.18

 

5Y

 

4.19

 

10Y

 

14.23

 

10Y

 

1.67

 

10Y

 

4.73

 

 

7             Cash and cash equivalents

 

 

 

Average yield p.a. - %

 

March 31,2016

 

December 31, 2015

 

 

 

 

 

 

 

 

 

Cash and banks

 

 

 

178,257

 

196,274

 

Fixed-term deposits

 

 

 

 

 

 

 

Local currency

 

99.6 of CDI

 

3,620

 

3,985

 

Foreign currency (i)

 

0.23

 

590,895

 

877,392

 

 

 

 

 

 

 

 

 

 

 

 

 

772,772

 

1,077,651

 

 


(i) Mainly Time Deposit maturing within 90 days.

 

The decrease of R$ 304,879 in the three-month period ended March 31, 2016 refers, mainly, to the payments made to suppliers regarding to the Horizonte 2 Project.

 

8             Marketable securities

 

 

 

Average
yield p.a.- %

 

March 31,
2016

 

December 31, 
2015

 

 

 

 

 

 

 

 

 

In local currency

 

 

 

 

 

 

 

Brazilian Federal provision fund

 

80 of CDI

 

219

 

250

 

Brazilian Federal Government securities

 

 

 

 

 

 

 

At fair value through profit and loss

 

90.87 of CDI

 

44,673

 

40,364

 

Held to maturity (i)

 

6 and 90.87 of CDI

 

74,917

 

73,914

 

Private securities (repurchase agreements)

 

100 of CDI

 

784,677

 

1,365,478

 

 

 

 

 

 

 

 

 

Marketable securities

 

 

 

904,486

 

1,480,006

 

 

 

 

 

 

 

 

 

Current

 

 

 

835,595

 

1,411,864

 

 

 

 

 

 

 

 

 

Non-Current

 

 

 

68,891

 

68,142

 

 


(i)   The yield of 6% p.a. refers to the agrarian debt bonds and the yield of 90.87% of CDI refers to the investment fund - Pulp.

 

19



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

The decrease of R$ 575,520 in the three-month period ended March 31, 2016 refers, mainly, to the payments made to suppliers regarding to the Horizonte 2 Project.

 

9             Derivative financial instruments (including embedded derivative)

 

(a)           Derivative financial instruments by type

 

 

 

Reference value 
(notional) - in U.S Dollars

 

Fair value

 

Type of derivative

 

March
31, 2016

 

December
31, 2015

 

March
31, 2016

 

December
31, 2015

 

 

 

 

 

 

 

 

 

 

 

Instruments contracted of economic hedge strategy

 

 

 

 

 

 

 

 

 

Operational hedge

 

 

 

 

 

 

 

 

 

Cash flow hedges of exports

 

 

 

 

 

 

 

 

 

Zero cost collar

 

995,000

 

310,000

 

87,758

 

(8,627

)

 

 

 

 

 

 

 

 

 

 

Hedges of debts

 

 

 

 

 

 

 

 

 

Hedges of interest rates

 

 

 

 

 

 

 

 

 

Swap LIBOR x Fixed (USD)

 

620,995

 

622,907

 

(28,930

)

(8,902

)

 

 

 

 

 

 

 

 

 

 

Hedges of foreign currency

 

 

 

 

 

 

 

 

 

Swap DI x US$ (USD)

 

354,943

 

358,607

 

(492,301

)

(648,052

)

Swap TJLP x US$ (USD)

 

80,307

 

98,287

 

(157,836

)

(230,433

)

Swap Pre x US$ (USD)

 

103,698

 

112,107

 

(136,588

)

(185,519

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(727,897

)

(1,081,533

)

 

 

 

 

 

 

 

 

 

 

Embedded derivative in forestry partnership and standing timber supply agreements (*)

 

 

 

 

 

 

 

 

 

Swap of US-CPI

 

846,571

 

857,710

 

239,499

 

253,572

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(488,398

)

(827,961

)

 

 

 

 

 

 

 

 

 

 

Classified

 

 

 

 

 

 

 

 

 

In current assets

 

 

 

 

 

69,654

 

26,795

 

In non-current assets

 

 

 

 

 

299,564

 

273,694

 

In current liabilities

 

 

 

 

 

(233,517

)

(302,787

)

In non-current liabilities

 

 

 

 

 

(624,099

)

(825,663

)

 

 

 

 

 

 

 

 

 

 

Total, net

 

 

 

 

 

(488,398

)

(827,961

)

 


(*) The embedded derivative is a swap of the US-CPI variations during the term of the Forestry Partnership and Standing Timber Supply Agreements.

 

20



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

(b)           Derivative financial instruments of economic

hedge strategy by type and broken down by

nature of the exposure

 

 

 

Reference value (notional) -
in currency of origin

 

Fair value

 

Type of derivative and 
protected risk

 

Currency

 

March
31, 2016

 

December
31, 2015

 

March
31, 2016

 

December
31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

Swap contracts - Hedge of debts

 

 

 

 

 

 

 

 

 

 

 

Asset

 

 

 

 

 

 

 

 

 

 

 

LIBOR to fixed

 

US$

 

620,995

 

622,907

 

2,119,196

 

2,308,517

 

Real CDI to USD

 

R$

 

691,521

 

698,559

 

1,069,976

 

1,058,346

 

Real TJLP to USD

 

R$

 

130,882

 

159,938

 

128,470

 

153,963

 

Real Pre to USD

 

R$

 

219,732

 

236,072

 

178,490

 

182,240

 

Liability

 

 

 

 

 

 

 

 

 

 

 

LIBOR to fixed

 

US$

 

620,995

 

622,907

 

(2,148,126

)

(2,317,419

)

Real CDI to USD

 

US$

 

354,943

 

358,607

 

(1,562,277

)

(1,706,398

)

Real TJLP to USD

 

US$

 

80,307

 

98,287

 

(286,306

)

(384,396

)

Real Pre to USD

 

US$

 

103,698

 

112,107

 

(315,078

)

(367,759

)

 

 

 

 

 

 

 

 

 

 

 

 

Total of swap contracts

 

 

 

 

 

 

 

(815,655

)

(1,072,906

)

 

 

 

 

 

 

 

 

 

 

 

 

Options - Cash flow hedge

 

 

 

 

 

 

 

 

 

 

 

Zero cost collar

 

US$

 

995,000

 

310,000

 

87,758

 

(8,627

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(727,897

)

(1,081,533

)

 

(c)           Derivative financial instruments by type of
economic hedge strategy contracts

 

 

 

Fair value

 

Value (paid) or received

 

Type of derivative

 

March
31, 2016

 

December
31, 2015

 

March
31, 2016

 

December
31, 2015

 

 

 

 

 

 

 

 

 

 

 

Operational hedge

 

 

 

 

 

 

 

 

 

Cash flow hedge of exports

 

87,758

 

(8,627

)

 

 

(125,107

)

Hedge of debts

 

 

 

 

 

 

 

 

 

Hedge of interest rates

 

(28,930

)

(8,902

)

(5,632

)

(15,333

)

Hedge of foreign currency

 

(786,725

)

(1,064,004

)

(51,529

)

(279,191

)

 

 

 

 

 

 

 

 

 

 

 

 

(727,897

)

(1,081,533

)

(57,161

)

(419,631

)

 

21



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

(d)           Fair value and counterparty by maturity

date of economic hedge strategy contracts

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

2016

 

(148,542

)

(281,423

)

2017

 

(250,692

)

(396,982

)

2018

 

(226,265

)

(280,340

)

2019

 

(64,562

)

(76,408

)

2020

 

(37,836

)

(46,380

)

 

 

 

 

 

 

 

 

(727,897

)

(1,081,533

)

 

Fair value does not necessarily represent the cash required to immediately settle each contract, as such disbursement will only be made on the date of maturity of each transaction, when the final settlement amount will be determined.

 

The outstanding contracts at March 31, 2016 are not subject to margin calls or anticipated liquidation clauses resulting from mark-to-market variations. All operations are over-the-counter and registered at CETIP (a clearing house).

 

10           Trade accounts receivable

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Domestic customers

 

93,099

 

75,281

 

Export customers

 

544,247

 

674,224

 

 

 

 

 

 

 

 

 

637,346

 

749,505

 

 

 

 

 

 

 

Allowance for doubtful accounts

 

(7,093

)

(7,153

)

 

 

 

 

 

 

 

 

630,253

 

742,352

 

 

In the three-month period ended March 31, 2016, we made some credit assignment without recourse for certain customers’ receivables, in the amount of R$ 1,491,364 (R$ 1,788,970 at December 31, 2015), that were derecognized from accounts receivable in the balance sheet.

 

22



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

11           Inventory

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Finished goods at plants/warehouses

 

 

 

 

 

Brazil

 

209,742

 

155,286

 

Abroad

 

796,140

 

731,498

 

Work in process

 

16,228

 

12,935

 

Raw materials

 

530,459

 

520,445

 

Supplies

 

143,882

 

150,838

 

Imports in transit

 

1,276

 

144

 

 

 

 

 

 

 

 

 

1,697,727

 

1,571,146

 

 

12           Recoverable taxes

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Withholding tax and prepaid Income Tax (IRPJ) and Social Contribution (CSLL)

 

855,174

 

762,743

 

Value-added Tax on Sales and Services (ICMS) on purchases of property, plant and equipment

 

23,643

 

26,235

 

Value-added Tax on Sales and Services (ICMS and IPI) on purchases of raw materials and supplies

 

990,376

 

978,399

 

Federal tax credits

 

 

 

356,058

 

Credit related to Reintegra Program

 

91,845

 

91,145

 

Social Integration Program (PIS) and Social Contribution on Revenue (COFINS) Recoverable

 

598,435

 

727,210

 

Provision for the impairment of ICMS credits

 

(984,600

)

(967,332

)

 

 

 

 

 

 

 

 

1,574,873

 

1,974,458

 

 

 

 

 

 

 

Current

 

807,112

 

462,487

 

 

 

 

 

 

 

Non-current

 

767,761

 

1,511,971

 

 

During the three-month period ended March 31, 2016, there were no relevant changes to our expectations regarding the recoverability of the tax credits presented in this note and the Note 14 to the most recent annual financial statements.

 

13           Income taxes

 

The Company and the subsidiaries located in Brazil are taxed based on their taxable income. The subsidiaries located outside of Brazil use methods established by the respective local jurisdictions. Income taxes have been calculated and recorded considering the applicable statutory tax rates enacted at the balance sheet date.

 

The Company still believes in the previsions of the International Double Taxation Treaties signed by Brazil. However, as the final decision regarding its applicability is still pending on the Supreme Court (Supremo Tribunal Federal — STF), nowadays the Company taxes the foreign profits according to the Law 12,973/14.

 

23



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

The Law 12,973/14 revoked the article 74 of Provisional Measure 2,158/01. The law determines that the adjustment in the value of the investment, in the direct or indirect controlled company, domiciled abroad, equivalent to its profits before tax, except for the foreign exchange, must be computed in the taxation basis of the corporate income tax and social contribution over profits of  the controller company domiciled in Brazil, at the end of the fiscal year. The repatriation of these profits in subsequent years will not be subject to taxation in Brazil. The Company has provisions regarding the Corporate Income Tax of the subsidiaries on an accrual basis.

 

(a)           Deferred taxes

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Tax loss carryforwards (i)

 

60,531

 

54,888

 

Provision for legal proceeds

 

125,505

 

119,924

 

Sundry provisions (impairment, operational and other)

 

570,943

 

637,176

 

Results of derivative contracts - payable on a cash basis for tax purposes

 

166,055

 

281,507

 

Exchange losses (net) - payable on a cash basis for tax purposes

 

1,992,283

 

2,396,243

 

Tax amortization of the assets acquired in the business combination - Aracruz

 

98,781

 

99,196

 

Actuarial gains on medical assistance plan (SEPACO)

 

3,743

 

3,743

 

Income tax and social contribution from foreign-domiciled subsidiaries under IFRS

 

(411,487

)

(338,315

)

Tax accelerated depreciation

 

(14,663

)

(7,324

)

Reforestation costs already deducted for tax purposes

 

(400,441

)

(387,568

)

Fair values of biological assets

 

(165,974

)

(174,450

)

Tax benefit of goodwill - goodwill not amortized for accounting purposes

 

(559,116

)

(536,752

)

Other provisions

 

(26,419

)

(20,051

)

 

 

 

 

 

 

Total deferred taxes asset, net

 

1,439,741

 

2,128,217

 

 

 

 

 

 

 

Deferred taxes - asset (net by entity)

 

1,685,042

 

2,399,213

 

 

 

 

 

 

 

Deferred taxes - liability (net by entity)

 

245,301

 

270,996

 

 


(i)

The balance as at March 31, 2016 is presented net of R$ 332,348 (R$ 346,291 as at December 31, 2015) related to the provision for impairment for foreign tax losses.

 

24



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

Changes in the net balance of deferred income tax are as follows:

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

At the beginning of the period

 

2,128,217

 

924,308

 

Tax loss carryforwards

 

5,643

 

(137,759

)

Temporary differences from provisions

 

(60,652

)

198,028

 

Provision for tax on investments in foreign-domiciled subsidiaries

 

(73,172

)

(312,338

)

Derivative financial instruments taxed on a cash basis

 

(115,452

)

139,569

 

Amortization of goodwill

 

(22,779

)

(92,598

)

Reforestation costs

 

(20,212

)

(36,605

)

Exchange losses (net) taxed on a cash basis

 

(403,960

)

1,483,024

 

Fair value of biological assets

 

8,476

 

(21,430

)

Actuarial losses on medical assistance plan (SEPACO)(*)

 

 

 

(2,866

)

Other

 

(6,368

)

(13,116

)

 

 

 

 

 

 

At the end of the period

 

1,439,741

 

2,128,217

 

 


(*) Deferred taxes related to the other comprehensive income.

 

(b)           Reconciliation of taxes on income

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Income (loss) before tax

 

1,711,638

 

(1,208,913

)

 

 

 

 

 

 

Income tax and social contribution benefit (expense) at statutory nominal rate - 34%

 

(581,957

)

411,030

 

 

 

 

 

 

 

Reconciliation to effective expense:

 

 

 

 

 

Equity in results of joint-venture

 

(172

)

269

 

Credit from Reintegra Program

 

507

 

8,400

 

Benefits to directors

 

(7,726

)

(5,587

)

Difference in tax rates of foreign subsidiaries

 

 

 

32

 

Foreign exchange effects on foreign subsidiaries (i)

 

(138,221

)

225,182

 

Other, mainly non-deductible provisions

 

(6,057

)

3,594

 

 

 

 

 

 

 

Income tax and social contribution benefit (expense) for the period

 

(733,626

)

642,920

 

 

 

 

 

 

 

Effective rate - %

 

42.9

 

53.2

 

 


(i)

Relates to net foreign exchange gains recognized by our foreign subsidiaries that use the real as the functional currency. As the real is not used for tax purposes in the foreign country this net foreign exchange gain is not recognized for tax purposes in the foreign country nor will it ever be subject to tax in Brazil.

 

14           Significant transactions and balances with related parties

 

(a)           Related parties

 

The Company is governed by a Shareholders Agreement entered into between Votorantim S.A., which holds 29.42% of our shares, and BNDES Participações S.A. (“BNDESPAR”), which holds 29.08% of our

 

25



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

shares (together the “Controlling Shareholders”). The Company’s commercial and financial transactions with its subsidiaries, companies of the Votorantim Group and other related parties are carried out at normal market prices and conditions, based on usual terms and rates applicable to third parties.

 

In the three-month period ended March 31, 2016, there were no significant changes in the terms of the contracts, agreements and transactions, and there were no new contracts, agreements or transactions with distinct nature between the Company and its related parties when compared to the transactions disclosed in Note 16 to the most recent financial statements as at December 31, 2015.

 

(i)            Balances recognized in assets and liabilities

 

 

 

Balances receivable (payable)

 

 

 

Nature

 

March
31, 2016

 

December 
31, 2015

 

 

 

 

 

 

 

 

 

Transactions with controlling shareholders

 

 

 

 

 

 

 

Votorantim S.A.

 

Rendering of services

 

 

 

(9

)

Votorantim S.A.

 

Land leases

 

 

 

(851

)

BNDES

 

Financing

 

(1,725,007

)

(1,851,408

)

 

 

 

 

 

 

 

 

 

 

 

 

(1,725,007

)

(1,852,268

)

 

 

 

 

 

 

 

 

Transactions with Votorantim Group companies

 

 

 

 

 

 

 

Votorantim S.A.

 

Financing

 

10,677

 

11,714

 

Votener - Votorantim Comercializadora e Energia

 

Energy supplier

 

777

 

6,937

 

Banco Votorantim S.A.

 

Investments

 

 

 

32,806

 

Banco Votorantim S.A.

 

Financial instruments

 

2,109

 

(1,066

)

Votorantim Cimentos S.A.

 

Energy supplier

 

 

 

517

 

Votorantim Cimentos S.A.

 

Input supplier

 

(3

)

(50

)

Polimix Concreto Ltda.

 

Input supplier

 

 

 

(143

)

Votorantim Siderurgia

 

Standing wood supplier

 

(416

)

(4,164

)

Pedreira Pedra Negra

 

Input supplier

 

(13

)

(21

)

Votorantim Metais Ltda.

 

Chemical products supplier

 

(1,000

)

(277

)

Companhia Brasileira de Alumínio - CBA

 

Land leases

 

(695

)

(695

)

 

 

 

 

 

 

 

 

 

 

 

 

11,436

 

45,558

 

 

 

 

 

 

 

 

 

Net

 

 

 

(1,713,571

)

(1,806,710

)

 

 

 

 

 

 

 

 

Presented in the following lines

 

 

 

 

 

 

 

In assets

 

 

 

 

 

 

 

Marketable securities (Note 8)

 

 

 

 

 

32,806

 

Derivative financial instruments (Note 9)

 

 

 

2,109

 

 

 

Related parties - non-current

 

 

 

10,677

 

11,714

 

Other assets - current

 

 

 

777

 

7,454

 

In liabilities

 

 

 

 

 

 

 

Loans and financing (Note 19)

 

 

 

(1,725,007

)

(1,851,408

)

Derivative financial instruments (Note 9)

 

 

 

 

 

(1,066

)

Suppliers

 

 

 

(2,127

)

(6,210

)

 

 

 

 

 

 

 

 

 

 

 

 

(1,713,571

)

(1,806,710

)

 

26



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

(ii)          Amounts transacted in the period

 

 

 

Nature

 

March
31, 2016

 

March
31, 2015

 

 

 

 

 

 

 

 

 

Transactions with controlling shareholders

 

 

 

 

 

 

 

Votorantim S.A.

 

Rendering of services

 

(2,650

)

(2,747

)

BNDES

 

Financing

 

15,460

 

(136,336

)

 

 

 

 

 

 

 

 

 

 

 

 

12,810

 

(139,083

)

 

 

 

 

 

 

 

 

Transactions with Votorantim Group Companies

 

 

 

 

 

 

 

Votorantim S.A.

 

Financing

 

(1,037

)

1,655

 

Votener - Votorantim Comercializadora de Energia

 

Energy supplier

 

3,004

 

28,586

 

Banco Votorantim S.A.

 

Investments

 

951

 

10

 

Banco Votorantim S.A.

 

Financial instruments

 

2,062

 

(4,513

)

Votorantim Cimentos S.A.

 

Energy supplier

 

1,923

 

1,425

 

Votorantim Cimentos S.A.

 

Input supplier

 

(23

)

(32

)

Votorantim Cimentos S.A.

 

Sales of wood

 

 

 

848

 

Sitrel Siderurgia Três Lagoas

 

Energy supplier

 

1,599

 

 

 

Pedreira Pedra Negra

 

Input supplier

 

(57

)

(89

)

Votorantim Metais Ltda.

 

Chemical products supplier

 

(3,151

)

(1,058

)

Votorantim Metais Ltda.

 

Land leases

 

 

 

(2,318

)

Companhia Brasileira de Alumínio (CBA)

 

Land leases

 

(128

)

(117

)

 

 

 

 

 

 

 

 

 

 

 

 

5,143

 

24,397

 

 

(b)           Key management compensation

 

The remuneration expenses of the Fibria’s officers and directors, including all benefits, are summarized as follows:

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Benefits to officers and directors (i)

 

1,234

 

9,536

 

Benefit program - Phantom Stock Options and Stock Options plans

 

(10,794

)

2,208

 

 

 

 

 

 

 

 

 

(9,560

)

11,744

 

 


(i)

Benefits to officers and directors include fixed compensation, social charges, profit sharing program and the variable compensation program.

 

The amount of R$ 9,560 in the three-month period ended March 31, 2016, was impacted by the change in the Company’s stock price, which is considered for the valuation of the variable compensation program and benefit program (Phantom Stock Options and Stock Options plans) existing.

 

Benefits to key management do not include the compensation for the Statutory Audit Committee, Finance, Compensation and Sustainability Committees’ members of R$ 247 for the three-month period ended March 31, 2016 (R$ 248 for the three-month period ended March 31, 2015).

 

27



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

The Company does not have any other post-employment plans and does not offer any other benefits, such as additional paid leave for time of service.

 

The balances to be paid to the Company’s officers and directors are recorded as follows:

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Current liability

 

 

 

 

 

Payroll, profit sharing and related charges

 

12,862

 

37,563

 

 

 

 

 

 

 

Non-current liability

 

 

 

 

 

Other payables

 

5,689

 

9,401

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

Capital reserve

 

3,454

 

9,329

 

 

 

 

 

 

 

 

 

22,005

 

56,293

 

 

15           Investments

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Investment in joint-venture - equity method

 

2,865

 

751

 

Other investments - at fair value (i)

 

124,774

 

137,020

 

 

 

 

 

 

 

 

 

127,639

 

137,771

 

 


(i)

Fair value change in our interest in Ensyn was not significant in the three-month period ended March 31, 2016. The decrease in the balance refers to the foreign currency effect on the investment.

 

None of the subsidiaries and jointly-operated entities has publicly traded shares.

 

The provisions and contingent liabilities related to the entities of the Company are described in Note 20.

 

Additionally, the Company does not have any significant restriction or commitments with regards to its associates and joint-venture.

 

28



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

16           Biological assets

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

At the beginning of the period

 

4,114,998

 

3,707,845

 

 

 

 

 

 

 

Additions

 

291,390

 

1,344,355

 

Harvests in the year (depletion)

 

(251,969

)

(1,102,725

)

Change in fair value - step up

 

 

 

184,583

 

Disposals / provision for disposals

 

 

 

(19,063

)

Transfer (i)

 

 

 

3

 

 

 

 

 

 

 

At the end of the period

 

4,154,419

 

4,114,998

 

 


(i) Includes transfers between biological assets and property, plant and equipment.

 

29



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

17                                  Property, plant and equipment

 

 

 

Land

 

Buildings

 

Machinery,
equipment
and facilities

 

Property, plant
and equipment
in progress (i)

 

Other

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2014

 

1,200,512

 

1,358,716

 

6,457,787

 

217,627

 

18,091

 

9,252,733

 

Additions

 

453,775

 

335

 

3,640

 

553,291

 

1,903

 

1,012,944

 

Disposals

 

(17,367

)

(6,056

)

(16,005

)

 

 

(887

)

(40,315

)

Depreciation

 

 

 

(112,005

)

(653,595

)

 

 

(14,368

)

(779,968

)

Acquisition of assets - Fibria Innovations

 

 

 

 

 

4,212

 

 

 

 

 

4,212

 

Transfers and others (ii)

 

 

 

50,294

 

184,508

 

(303,900

)

52,878

 

(16,220

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2015

 

1,636,920

 

1,291,284

 

5,980,547

 

467,018

 

57,617

 

9,433,386

 

Additions

 

 

 

245

 

147

 

995,782

 

573

 

996,747

 

Disposals

 

 

 

(1,169

)

(4,067

)

 

 

(215

)

(5,451

)

Depreciation

 

 

 

(29,974

)

(163,167

)

 

 

(4,166

)

(197,307

)

Transfers and others (ii)

 

 

 

24,065

 

48,212

 

(67,385

)

1,118

 

6,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2015

 

1,636,920

 

1,284,451

 

5,861,672

 

1,395,415

 

54,927

 

10,233,385

 

 


(i)        Includes the amount of R$ 1,184,143 regarding the Horizonte 2 Project.

 

(ii)     Includes transfers between property, plant and equipment, biological assets, intangible assets and inventory.

 

30



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim
 financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

18                                 Intangible assets

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

At the beginning of the period

 

4,505,634

 

4,552,103

 

Additions

 

115,072

 

8

 

Amortization

 

(17,030

)

(76,021

)

Disposals

 

(98

)

(67

)

Transfers and others (*)

 

9,299

 

29,611

 

 

 

 

 

 

 

At the end of the period

 

4,612,877

 

4,505,634

 

 

 

 

 

 

 

Composed by

 

 

 

 

 

Goodwill — Aracruz

 

4,230,450

 

4,230,450

 

Systems development and deployment

 

35,693

 

28,677

 

Concession right — Macuco Terminal (Note 1(a))

 

115,047

 

 

 

Acquired from business combination

 

 

 

 

 

Databases

 

125,400

 

136,800

 

Relationships with suppliers

 

90,235

 

92,812

 

Chemical products

 

 

 

 

 

Other

 

16,052

 

16,895

 

 

 

 

 

 

 

 

 

4,612,877

 

4,505,634

 

 


(*)    Includes transfers between property, plant and equipment and intangible assets.

 

31



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim

financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

19                                 Loans and financing

 

(a)                                Breakdown of the balance by type of loan

 

 

 

 

 

Average
annual

 

Current

 

Non-current

 

Total

 

Type/purpose

 

Interest
rate

 

interest
rate - %

 

March 31,
2016

 

December 31,
2015

 

March 31,
2016

 

December 31,
2015

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In foreign currency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BNDES - currency basket

 

UMBNDES

 

6.4

 

69,915

 

78,632

 

588,795

 

652,610

 

658,710

 

731,242

 

Bonds - US$

 

Fixed

 

5.6

 

49,076

 

15,801

 

2,449,207

 

2,686,105

 

2,498,283

 

2,701,906

 

Export credits (prepayment)

 

LIBOR

 

2.4

 

316,463

 

595,795

 

5,526,307

 

6,141,049

 

5,842,770

 

6,736,844

 

Export credits (ACC/ACE)

 

Fixed

 

2.8

 

 

 

45,123

 

 

 

 

 

 

 

45,123

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

435,454

 

735,351

 

8,564,309

 

9,479,764

 

8,999,763

 

10,215,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Reais

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BNDES

 

TJLP

 

10.3

 

176,302

 

186,937

 

739,559

 

776,421

 

915,861

 

963,358

 

BNDES

 

Fixed

 

5.5

 

30,079

 

29,745

 

92,791

 

100,460

 

122,870

 

130,205

 

BNDES

 

Selic

 

7,8

 

29

 

18

 

27,537

 

26,585

 

27,566

 

26,603

 

FINAME

 

TJLP/Fixed

 

3.5

 

2,550

 

3,236

 

1,671

 

2,226

 

4,221

 

5,462

 

CRA

 

CDI

 

13.8

 

36,253

 

16,687

 

662,639

 

659,275

 

698,892

 

675,962

 

NCE

 

CDI

 

14.4

 

84,843

 

88,855

 

622,280

 

613,177

 

707,123

 

702,032

 

Midwest Region Fund (FCO and FINEP)

 

Fixed

 

8.0

 

12,030

 

12,048

 

10,074

 

13,047

 

22,104

 

25,095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

342,086

 

337,526

 

2,156,551

 

2,191,191

 

2,498,637

 

2,528,717

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

777,540

 

1,072,877

 

10,720,860

 

11,670,955

 

11,498,400

 

12,743,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

 

 

 

139,198

 

94,172

 

123,163

 

109,658

 

262,361

 

203,830

 

Short-term borrowing

 

 

 

 

 

 

 

44,905

 

 

 

 

 

 

 

44,905

 

Long-term borrowing

 

 

 

 

 

638,342

 

933,800

 

10,597,697

 

11,561,297

 

11,236,039

 

12,495,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

777,540

 

1,072,877

 

10,720,860

 

11,670,955

 

11,498,400

 

12,743,832

 

 

The average rates were calculated based on the forward yield curve of benchmark rates to which the loans are indexed, weighted through the maturity date for each installment, including the issuing/contracting costs, when applicable.

 

32



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim

financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

(b)                                Breakdown by maturity

 

 

 

2017

 

2018

 

2019

 

2020

 

2021

 

2022

 

2023

 

2024

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In foreign currency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BNDES - currency basket

 

68,320

 

74,444

 

60,460

 

166,144

 

174,849

 

39,817

 

4,761

 

 

 

588,795

 

Bonds - US$

 

 

 

 

 

 

 

339,962

 

 

 

 

 

 

 

2,109,245

 

2,449,207

 

Export credits (prepayment)

 

381,713

 

1,264,649

 

2,686,684

 

395,619

 

797,642

 

 

 

 

 

 

 

5,526,307

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

450,033

 

1,339,093

 

2,747,144

 

901,725

 

972,491

 

39,817

 

4,761

 

2,109,245

 

8,564,309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Reais

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BNDES - TJLP

 

122,969

 

118,033

 

88,279

 

153,842

 

165,261

 

53,623

 

25,174

 

12,378

 

739,559

 

BNDES - Fixed rate

 

23,506

 

30,406

 

24,302

 

12,410

 

2,000

 

167

 

 

 

 

 

92,791

 

BNDES - Selic

 

 

 

 

 

 

 

 

 

 

 

1,165

 

13,984

 

12,388

 

27,537

 

FINAME

 

1,504

 

167

 

 

 

 

 

 

 

 

 

 

 

 

 

1,671

 

CRA

 

 

 

 

 

 

 

 

 

662,639

 

 

 

 

 

 

 

662,639

 

NCE

 

273,661

 

262,170

 

43,225

 

43,224

 

 

 

 

 

 

 

 

 

622,280

 

Midwest Region Fund (FCO and FINEP)

 

8,920

 

659

 

495

 

 

 

 

 

 

 

 

 

 

 

10,074

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

430,560

 

411,435

 

156,301

 

209,476

 

829,900

 

54,955

 

39,158

 

24,766

 

2,156,551

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

880,593

 

1,750,528

 

2,903,445

 

1,111,201

 

1,802,391

 

94,772

 

43,919

 

2,134,011

 

10,720,860

 

 

33



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim

financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

(c)                                 Breakdown by currency

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Real

 

2,471,071

 

2,502,114

 

U.S. Dollar

 

8,341,053

 

9,483,873

 

Selic

 

27,566

 

26,603

 

Currency basket

 

658,710

 

731,242

 

 

 

 

 

 

 

 

 

11,498,400

 

12,743,832

 

 

(d)                                Roll forward

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

At the beginning of period

 

12,743,832

 

8,326,519

 

Borrowings

 

398,821

 

3,118,475

 

Interest expense

 

151,266

 

479,287

 

Foreign exchange losses (gains)

 

(870,231

)

3,037,653

 

Repayments - principal amount

 

(843,078

)

(1,800,670

)

Interest paid

 

(87,421

)

(405,546

)

Additional transaction costs

 

(5

)

(30,486

)

Other (*)

 

5,216

 

18,600

 

 

 

 

 

 

 

At the end of the period

 

11,498,400

 

12,743,832

 

 


(*)    It includes amortization of transactions costs.

 

(e)                                 Covenants

 

Some of the financing agreements of the Company contain covenants establishing maximum indebtedness and leverage levels, as well as minimum coverage of outstanding amounts.

 

The Company’s debt financial covenants are measured based on consolidated information translated into U.S. Dollars. The covenants specify that indebtedness ratio (Net debt to Adjusted EBITDA, as defined (Note 4.2.2 to the most recent financial statements for the year ended December 31, 2015)) cannot exceed 4.5x.

 

The Company is in full compliance with the covenants established in the financial contracts at March 31, 2016.

 

The loan indentures with debt financial covenants also present the following events of default:

 

·             Non-payment, within the stipulated period, of the principal or interest.

 

·             Inaccuracy of any declaration, guarantee or certification provided.

 

·             Cross-default and cross-judgment default, subject to an agreed.

 

34



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim

financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

·             Subject to certain periods for resolution, breach of any obligation under the contract.

 

·             Certain events of bankruptcy or insolvency of the Company, its main subsidiaries or Veracel.

 

20                                 Provision for contingencies

 

 

 

March 31, 2016

 

December 31, 2015

 

 

 

Judicial
deposits

 

Provision

 

Net

 

Judicial
deposits

 

Provision

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nature of claims

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax

 

97,678

 

107,883

 

10,205

 

96,997

 

106,571

 

9,574

 

Labor

 

67,317

 

213,034

 

145,717

 

64,429

 

201,561

 

137,132

 

Civil

 

19,578

 

39,473

 

19,895

 

18,918

 

37,537

 

18,619

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

184,573

 

360,390

 

175,817

 

180,344

 

345,669

 

165,325

 

 

The change in the provision for contingencies is as follows:

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

 

 

 

 

At the beginning of the period

 

345,669

 

302,144

 

Settlement

 

(273

)

(16,334

)

Reversal

 

(4,383

)

(38,196

)

New litigation

 

8,540

 

37,089

 

Accrual of financial charges

 

10,837

 

60,966

 

 

 

 

 

 

 

At the end of the period

 

360,390

 

345,669

 

 

(i)                                   Significant changes in the period

 

Tax assessment - IRPJ/CSLL - Swap of industrial and forestry assets

 

On January 19, 2016, the Tax Federal Administrative Court (CARF - Conselho Administrativo de Recursos Fiscais) rejected as per the casting vote of CARF’s President, the appeal filed by the Company in the administrative process regarding the tax assessment received on the swap of industrial and forestry assets with International Paper, as mentioned in Note 24(b)(iv) of our most recent annual financial statements as at December 31, 2015.

 

The Company is awaiting the final decision be published to evaluate the possibility of challenge the referred ruling in the administrative level. If the filing of an appeal in the administrative level is not advisable, the discussion will continue in judicial courts, with financial impact only corresponding to the payment of the required judicial guarantee. The Company maintain its position to not constitute provisions for contingencies, based on the Company’s and its external legal advisors’ opinion that the probability of loss on this case is possible. The updated amount as at March 31, 2016 was R$ 1,673,998.

 

35



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim

financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

Tax assessment - IRPJ/CSLL - Fibria Trading International

 

On February 25, 2016, the Company was notified of the decision that rejected the appeal filed by the tax authorities, in view of the favorable decision to the Company in the first administrative level. Since that there were no new appeal by the tax authorities, on March 6, 2016, the tax assessment was filed.

 

Tax assessment - IRPJ/CSLL - Fibria Overseas Holding

 

On October 21, 2015, the Company was notified of the CARF’s decision that judged favorable the appeal presented. Since that there were no new appeal by the tax authorities, on January 21, 2016, the tax assessment was filed.

 

Tax assessment - IRPJ/CSLL - Newark

 

On February 3, 2016, CARF judged favorable the appeal presented by the Company and rejected the appeal filled by the tax authorities. On March 21, 2016, the tax authorities filled petitions regarding the administrative proceedings informing they do not have interest in pursuing the discussion in the Superior Chamber of Tax Appeals, which leads the tax assessment to be filed.

 

21                                 Revenue

 

(a)                                Reconciliation

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Gross amount

 

3,141,513

 

2,535,146

 

Sales taxes

 

(64,171

)

(44,789

)

Discounts and returns (*)

 

(682,583

)

(493,291

)

 

 

 

 

 

 

Net revenues

 

2,394,759

 

1,997,066

 

 


(*)    Related mainly to trade discounts.

 

36



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim

financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

(b)                                Information about markets

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

Domestic market

 

256,311

 

170,682

 

Export market

 

2,115,858

 

1,804,663

 

Services

 

22,590

 

21,721

 

 

 

 

 

 

 

 

 

2,394,759

 

1,997,066

 

 

22                                 Financial results

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Financial expenses

 

 

 

 

 

Interest on loans and financing (i)

 

(128,594

)

(98,961

)

Loans commissions

 

(4,224

)

(2,343

)

Others

 

(37,230

)

(9,126

)

 

 

 

 

 

 

 

 

(170,048

)

(110,430

)

 

 

 

 

 

 

Financial income

 

 

 

 

 

Financial investment earnings

 

35,667

 

15,987

 

Others (ii)

 

20,608

 

20,555

 

 

 

 

 

 

 

 

 

56,275

 

36,542

 

 

 

 

 

 

 

Gains (losses) on derivative financial instruments

 

 

 

 

 

Gains

 

359,690

 

20,980

 

Losses

 

(77,287

)

(569,777

)

 

 

 

 

 

 

 

 

282,403

 

(548,797

)

 

 

 

 

 

 

Foreign exchange losses and monetary adjustment, net

 

 

 

 

 

Loans and financing

 

870,231

 

(1,301,736

)

Other assets and liabilities (iii)

 

(117,294

)

178,611

 

 

 

 

 

 

 

 

 

752,937

 

(1,123,125

)

 

 

 

 

 

 

Net

 

921,567

 

(1,745,810

)

 


(i)        Does not include the amount of R$ 22,672 as at March 31, 2016 (R$ 2,123 as at March 31, 2015), related to capitalized financing costs.

 

(ii)     Includes interest accrual of the tax credits.

 

(iii) Includes the effect of exchange foreign on cash and cash equivalents, trade accounts receivable, trade payable and others.

 

37



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim

financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

23                                 Expenses by nature

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

Depreciation, depletion and amortization

 

(436,664

)

(441,432

)

Freight

 

(194,651

)

(196,148

)

Labor expenses

 

(129,196

)

(115,535

)

Variable costs (raw materials and miscellaneous materials)

 

(659,317

)

(519,150

)

 

 

 

 

 

 

 

 

(1,419,828

)

(1,272,265

)

 

 

 

 

 

 

Selling expenses

 

 

 

 

 

Labor expenses

 

(7,721

)

(6,492

)

Selling expenses (i)

 

(91,533

)

(81,177

)

Operational leasing

 

(586

)

(417

)

Depreciation and amortization charges

 

(2,808

)

(2,529

)

Other expenses

 

(7,289

)

(4,716

)

 

 

 

 

 

 

 

 

(109,937

)

(95,331

)

 

 

 

 

 

 

General and administrative

 

 

 

 

 

Labor expenses

 

(24,248

)

(22,723

)

Third-party services

 

(25,920

)

(28,098

)

Depreciation and amortization

 

(3,529

)

(3,861

)

Taxes and contributions

 

(1,482

)

(1,996

)

Operating leases and insurance

 

(2,629

)

(1,974

)

Other expenses

 

(6,567

)

(5,452

)

 

 

 

 

 

 

 

 

(64,375

)

(64,104

)

 

 

 

 

 

 

Other operating (expenses) income

 

 

 

 

 

Programs of variable compensation (ii)

 

1,244

 

(25,637

)

Loss on disposal of property, plant and equipment

 

(5,071

)

(3,488

)

Tax credits

 

2,341

 

523

 

Provision of contingencies

 

(8,640

)

(2,486

)

Others

 

84

 

1,829

 

 

 

 

 

 

 

 

 

(10,042

)

(29,259

)

 


(i)            Includes handling expenses, storage and transportation expenses and sales commissions and others.

 

(ii)         Includes the provisions/reversals of the variable compensation program and benefit programs (Phantom Stock Options and Stock Options plans), which consider the Company’s stock price in its valuation.

 

38



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim

financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

24                                 Earnings per share

 

(a)                                Basic

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

Net income (loss) attributable to the shareholders of the Company

 

975,266

 

(569,360

)

 

 

 

 

 

 

Denominator

 

 

 

 

 

Weighted average number of common shares outstanding

 

553,590,604

 

553,591,822

 

 

 

 

 

 

 

Basic earnings (loss) per share - in Reais

 

1.76

 

(1.03

)

 

The weighted average number of shares in the presented periods is represented by a total number of shares of 553,934,646 issued and outstanding for the three-month period ended March 31, 2016 and 2015, without considering treasury shares, for total of 344,042 shares in the three-month period ended March 31, 2016 (342,824 as at March 31, 2015). In the three-month period ended March 31, 2016 and 2015 there were no changes in the number of shares of Company.

 

(b)                                Diluted

 

 

 

March 31,
2016

 

March 31,
2015

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

Net income (loss) attributable to the shareholders of the Company

 

975,266

 

(569,360

)

 

 

 

 

 

 

Denominator

 

 

 

 

 

Weighted average number of common shares outstanding

 

553,590,604

 

553,591,822

 

Dilution effect

 

 

 

 

 

Stock options

 

687,840

 

349,091

 

Weighted average number of common shares outstanding adjusted according to dilution effect

 

554,278,444

 

553,940,913

 

 

 

 

 

 

 

Diluted earnings (loss) per share (in Reais)

 

1.76

 

(1.03

)

 

39



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim

financial information at March 31, 2016

In thousands of Reais, unless otherwise indicated

 

25                                 Explanatory notes not presented

 

According to the requirements for disclosure contained in Circular-Letter CVM/SNC/SEP/No. 003/2011, we presented explanatory notes to the annual financial statements detailing the financial instruments by category (Note 7), credit quality of financial assets ( Note 8), financial and operational lease agreements (Note 21), advances to suppliers (Note 22), the tax amnesty and refinancing program (Note 25), asset retirement obligations (Note 26), long term commitments (Note 27), benefits to employees (Note 29), compensation program based on shares (Note 30), insurance (Note 34), non-current assets held for sale (Note 36) and impairment testing (Note 37), that we omitted in the March 31, 2016 consolidated interim financial information because the assumptions, operations and policies have not seen any relevant changes compared to the position presented in the financial statements as At December 31, 2015.

 

In addition, the Company no longer has reportable segments to present as at March 31, 2016, therefore the Note regarding segment information was excluded.

 

*          *          *

 

40



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: April 27, 2016

 

 

 

 

Fibria Celulose S.A.

 

 

 

By:

/s/  Guilherme Perboyre Cavalcanti

 

Name:

Guilherme Perboyre Cavalcanti

 

Title:

CFO and IRO

 

41




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