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Form 6-K Fibria Celulose S.A. For: Oct 31

October 31, 2016 6:14 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 October 31, 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 September 30, 2016

and Report on Review of Interim

Financial Information

 



 

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 September 30, 2016, comprising the balance sheet at that date, the statements of income and comprehensive income for the quarter and nine-month period then ended, the statements of changes in equity and cash flows for the nine-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.

 

2



 

Prior year and period corresponding balances

 

The amounts corresponding to the financial statements for the year ended December 31, 2015, and to the interim accounting information for the quarter ended on September 30, 2015, presented for comparison purposes, were audited by other auditors who issued reports dated January 27, 2016 and October 22, 2015, respectively, without qualification.

 

São Paulo, October 25, 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

 

3



 

Fibria Celulose S.A.

 

Unaudited consolidated interim balance sheet at

In thousands of Reais

 

Assets

 

September 30,
2016

 

December 31, 
2015

 

 

 

 

 

 

 

Current

 

 

 

 

 

Cash and cash equivalents (Note 7)

 

1,133,852

 

1,077,651

 

Marketable securities (Note 8)

 

2,371,858

 

1,411,864

 

Derivative financial instruments (Note 9)

 

199,836

 

26,795

 

Trade accounts receivable, net (Note 10)

 

474,778

 

742,352

 

Inventory (Note 11)

 

1,787,650

 

1,571,146

 

Recoverable taxes (Note 12)

 

224,069

 

462,487

 

Other assets

 

190,703

 

168,283

 

 

 

 

 

 

 

 

 

6,382,746

 

5,460,578

 

 

 

 

 

 

 

Non-current

 

 

 

 

 

Marketable securities (Note 8)

 

70,661

 

68,142

 

Derivative financial instruments (Note 9)

 

315,248

 

273,694

 

Related parties receivables (Note 14)

 

9,739

 

11,714

 

Recoverable taxes (Note 12)

 

1,610,412

 

1,511,971

 

Advances to suppliers

 

640,747

 

630,562

 

Judicial deposits

 

192,156

 

195,344

 

Deferred taxes (Note 13)

 

1,122,895

 

2,399,213

 

Assets held for sale (Note 1(b))

 

598,257

 

598,257

 

Other assets

 

108,218

 

92,714

 

 

 

 

 

 

 

Investments (Note 15)

 

117,170

 

137,771

 

Biological assets (Note 16)

 

4,323,741

 

4,114,998

 

Property, plant and equipment (Note 17)

 

11,990,534

 

9,433,386

 

Intangible assets (Note 18)

 

4,584,105

 

4,505,634

 

 

 

 

 

 

 

 

 

25,683,883

 

23,973,400

 

 

 

 

 

 

 

Total assets

 

32,066,629

 

29,433,978

 

 

4



 

Fibria Celulose S.A.

 

Unaudited consolidated interim balance sheet at

 

In thousands of Reais

(continued)

 

Liabilities and shareholders’ equity

 

September 30,
2016

 

December 31,
 2015

 

 

 

 

 

 

 

Current

 

 

 

 

 

Loans and financing (Note 19)

 

1,509,772

 

1,072,877

 

Derivative financial instruments (Note 9)

 

250,750

 

302,787

 

Trade payables (Note 20)

 

1,342,709

 

668,017

 

Payroll, profit sharing and related charges

 

155,964

 

170,656

 

Taxes payable

 

137,944

 

564,439

 

Dividends payable

 

4,126

 

86,288

 

Other payables

 

113,058

 

90,235

 

 

 

 

 

 

 

 

 

3,514,323

 

2,955,299

 

 

 

 

 

 

 

Non-current

 

 

 

 

 

Loans and financing (Note 19)

 

12,682,567

 

11,670,955

 

Derivative financial instruments (Note 9)

 

268,410

 

825,663

 

Deferred taxes (Note 13)

 

371,522

 

270,996

 

Provision for legal proceeds (Note 21)

 

185,753

 

165,325

 

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

 

477,000

 

477,000

 

Other payables

 

237,574

 

253,420

 

 

 

 

 

 

 

 

 

14,222,826

 

13,663,359

 

 

 

 

 

 

 

Total liabilities

 

17,737,149

 

16,618,658

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

Share capital

 

9,729,006

 

9,729,006

 

Share capital reserve

 

10,186

 

15,474

 

Treasury shares

 

(10,378

)

(10,378

)

Statutory reserves

 

1,625,977

 

1,639,901

 

Other reserves

 

1,159,634

 

1,378,365

 

Retained earnings

 

1,747,103

 

 

 

 

 

 

 

 

 

Equity attributable to shareholders of the Company

 

14,261,528

 

12,752,368

 

 

 

 

 

 

 

Equity attributable to non-controlling interests

 

67,952

 

62,952

 

 

 

 

 

 

 

Total shareholders’ equity

 

14,329,480

 

12,815,320

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

32,066,629

 

29,433,978

 

 

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

 

5



 

Fibria Celulose S.A.

 

Unaudited consolidated interim statement of profit or loss

In thousands of Reais, except for the earnings per share

 

 

 

2016

 

2015

 

 

 

July 1 to
September 30,
(three months)

 

September 30,
(nine months)

 

July 1 to
September 30,
(three months)

 

September 30,
(nine months)

 

 

 

 

 

 

 

 

 

 

 

Revenues (Note 22)

 

2,299,846

 

7,081,010

 

2,789,667

 

7,096,052

 

Cost of sales (Note 24)

 

(1,849,485

)

(5,016,556

)

(1,533,244

)

(4,246,565

)

 

 

 

 

 

 

 

 

 

 

Gross profit

 

450,361

 

2,064,454

 

1,256,423

 

2,849,487

 

 

 

 

 

 

 

 

 

 

 

Selling expenses (Note 24)

 

(114,549

)

(345,528

)

(110,590

)

(312,558

)

General and administrative (Note 24)

 

(68,285

)

(201,507

)

(65,805

)

(194,807

)

Equity in results of joint-venture

 

31

 

(758

)

(6

)

744

 

Other operating income and expense, net (Note 24)

 

(27,574

)

(175,854

)

(43,935

)

(83,070

)

 

 

 

 

 

 

 

 

 

 

 

 

(210,377

)

(723,647

)

(220,336

)

(589,691

)

 

 

 

 

 

 

 

 

 

 

Income before financial income and expenses

 

239,984

 

1,340,807

 

1,036,087

 

2,259,796

 

 

 

 

 

 

 

 

 

 

 

Financial income (Note 23)

 

88,573

 

189,557

 

51,191

 

132,182

 

Financial expenses (Note 23)

 

(211,157

)

(534,503

)

(150,827

)

(397,946

)

Result of derivative financial instruments, net (Note 23)

 

(31,492

)

683,334

 

(570,507

)

(889,479

)

Foreign exchange loss and indexation charges, net (Note 23)

 

(49,271

)

1,475,123

 

(1,687,242

)

(2,627,044

)

 

 

 

 

 

 

 

 

 

 

 

 

(203,347

)

1,813,511

 

(2,357,385

)

(3,782,287

)

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

36,637

 

3,154,318

 

(1,321,298

)

(1,522,491

)

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

 

 

 

 

 

 

 

Current (Note 13)

 

(13,765

)

(36,076

)

(68,501

)

(147,102

)

Deferred (Note 13)

 

8,794

 

(1,363,108

)

788,373

 

1,116,594

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) for the period

 

31,666

 

1,755,134

 

(601,426

)

(552,999

)

 

 

 

 

 

 

 

 

 

 

Attributable to

 

 

 

 

 

 

 

 

 

Shareholders of the Company

 

28,637

 

1,747,103

 

(605,674

)

(563,286

)

 

 

 

 

 

 

 

 

 

 

Non-controlling interest

 

3,029

 

8,031

 

4,248

 

10,287

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) for the period

 

31,666

 

1,755,134

 

(601,426

)

(552,999

)

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share (in Reais) (Note 25(a))

 

0.05

 

3.16

 

(1.09

)

(1.02

)

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share (in Reais) (Note 25(b))

 

0.05

 

3.15

 

(1.09

)

(1.02

)

 

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

 

6



 

Fibria Celulose S.A.

 

Unaudited consolidated interim statement of comprehensive income

In thousands of Reais

 

 

 

2016

 

2015

 

 

 

July 1 to
September 30,
(three months)

 

September 30,
(nine months)

 

July 1 to
September 30,
(three months)

 

September 30,
(nine months)

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) for the period

 

31,666

 

1,755,134

 

(601,426

)

(552,999

)

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

Items that may be subsequently reclassified to profit or loss

 

 

 

 

 

 

 

 

 

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

 

1,166

 

(21,096

)

22,194

 

33,577

 

Tax effect thereon

 

(397

)

7,172

 

(7,546

)

(11,416

)

 

 

 

 

 

 

 

 

 

 

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

 

769

 

(13,924

)

14,648

 

22,161

 

 

 

 

 

 

 

 

 

 

 

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

 

32,435

 

1,741,210

 

(586,778

)

(530,838

)

 

 

 

 

 

 

 

 

 

 

Attributable to

 

 

 

 

 

 

 

 

 

Shareholders of the Company

 

29,406

 

1,733,179

 

(591,026

)

(541,125

)

Non-controlling interest

 

3,029

 

8,031

 

4,248

 

10,287

 

 

 

 

 

 

 

 

 

 

 

 

 

32,435

 

1,741,210

 

(586,778

)

(530,838

)

 

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

 

7



 

Fibria Celulose S.A.

 

Unaudited interim statement of changes in shareholders’ equity

In thousands of Reais

 

 

 

Capital

 

 

 

 

 

Other reserves

 

Statutory reserves

 

 

 

 

 

 

 

 

 

 

 

Capital

 

Share
issuance
costs

 

Capital
reserve

 

Treasury
shares

 

Other
comprehensive
income

 

Legal

 

Investments

 

Additional
dividends
proposed

 

Retained
earnings
(accumulated
losses)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(563,286

)

(563,286

)

10,287

 

(552,999

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

22,161

 

 

 

 

 

 

 

 

 

22,161

 

 

 

22,161

 

 

 

 

 

 

 

 

 

 

 

22,161

 

 

 

 

 

 

 

(563,286

)

(541,125

)

10,287

 

(530,838

)

Transactions with shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares

 

 

 

 

 

 

 

(32

)

 

 

 

 

 

 

 

 

 

 

(32

)

 

 

(32

)

Dividends distributed

 

 

 

 

 

 

 

 

 

 

 

 

 

(110,854

)

 

 

 

 

(110,854

)

 

 

(110,854

)

Stock option program

 

 

 

 

 

7,909

 

 

 

 

 

 

 

 

 

 

 

 

 

7,909

 

 

 

7,909

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at September 30, 2015

 

9,740,777

 

(11,771

)

11,829

 

(10,378

)

1,635,473

 

311,579

 

2,805,712

 

 

 

(563,286

)

13,919,935

 

61,955

 

13,981,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,747,103

 

1,747,103

 

8,031

 

1,755,134

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

(13,924

)

 

 

 

 

 

 

 

 

(13,924

)

 

 

(13,924

)

 

 

 

 

 

 

 

 

 

 

(13,924

)

 

 

 

 

 

 

1,747,103

 

1,733,179

 

8,031

 

1,741,210

 

Transactions with shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends distributed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(218,731

)

 

 

(218,731

)

 

 

(218,731

)

Stock option program

 

 

 

 

 

(5,288

)

 

 

 

 

 

 

 

 

 

 

 

 

(5,288

)

 

 

(5,288

)

Additional dividends declared - non-controlling interest - Portocel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,031

)

(3,031

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at September 30, 2016

 

9,740,777

 

(11,771

)

10,186

 

(10,378

)

1,625,977

 

328,689

 

830,945

 

 

 

1,747,103

 

14,261,528

 

67,952

 

14,329,480

 

 

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

 

8



 

Fibria Celulose S.A.

 

Unaudited consolidated interim statement of cash flows

In thousands of Reais

 

 

 

September 30,
2016

 

September 30,
2015

 

 

 

 

 

 

 

Income (loss) before income taxes

 

3,154,318

 

(1,522,491

)

 

 

 

 

 

 

Adjusted by

 

 

 

 

 

Depreciation, depletion and amortization

 

1,359,388

 

1,361,642

 

Depletion of timber resources from forestry partnership programs

 

43,462

 

48,714

 

Foreign exchange (gains) losses, net

 

(1,475,123

)

2,627,044

 

Change in fair value of derivative financial instruments

 

(683,334

)

889,479

 

Equity in results of joint-venture

 

758

 

(744

)

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

 

22,127

 

15,665

 

Interest and gain/losses from marketable securities

 

(118,494

)

(64,406

)

Interest expense

 

426,776

 

329,689

 

Change in fair value of biological assets

 

108,014

 

(29,831

)

Impairment of recoverable taxes - ICMS, net

 

74,701

 

61,084

 

Stock option program

 

(5,288

)

7,909

 

Tax credits

 

(8,962

)

 

 

Amortization of transaction costs and other

 

14,883

 

4,126

 

 

 

 

 

 

 

Decrease (increase) in assets

 

 

 

 

 

Trade accounts receivable

 

168,033

 

209,153

 

Inventory

 

(141,419

)

(220,193

)

Recoverable taxes

 

85,574

 

(260,544

)

Other assets/advances to suppliers

 

(68,721

)

(49,458

)

 

 

 

 

 

 

Increase (decrease) in liabilities

 

 

 

 

 

Trade payables

 

705,831

 

(43,305

)

Taxes payable

 

(366,602

)

8,551

 

Payroll, profit sharing and related charges

 

(14,693

)

12,739

 

Other payables

 

25,670

 

34,449

 

 

 

 

 

 

 

Cash provided by operating activities

 

3,306,899

 

3,419,272

 

 

 

 

 

 

 

Interest received

 

109,669

 

59,064

 

Interest paid

 

(359,539

)

(264,469

)

Income taxes paid

 

(90,804

)

(50,941

)

 

 

 

 

 

 

Net cash provided by operating activities

 

2,966,225

 

3,162,926

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

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

 

(4,380,310

)

(1,253,489

)

Advances for acquisition of timber from forestry partnership program

 

(53,724

)

(22,299

)

Subsidiary incorporation - Fibria Innovations

 

 

 

(11,630

)

Marketable securities, net

 

(953,688

)

(602,294

)

Capital increase on joint-venture

 

(3,267

)

 

 

Proceeds from sale of property, plant and equipment

 

8,798

 

32,084

 

Derivative transactions settled (Note 9(c))

 

(140,553

)

(305,890

)

Others

 

 

 

(8

)

 

 

 

 

 

 

Net cash used in investing activities

 

(5,522,744

)

(2,163,526

)

 

9



 

Fibria Celulose S.A.

 

 

 

Unaudited consolidated interim statement of cash flows

 

In thousands of Reais

(continued)

 

 

 

 

September 30,
2016

 

September 30,
2015

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Borrowings

 

5,225,097

 

1,965,416

 

Repayments of principal

 

(2,175,817

)

(1,095,233

)

Dividends paid

 

(303,926

)

(149,350

)

Others

 

(3,660

)

(1,190

)

 

 

 

 

 

 

Net cash provided by financing activities

 

2,741,694

 

719,643

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(128,974

)

417,016

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

56,201

 

2,136,059

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

1,077,651

 

461,067

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

1,133,852

 

2,597,126

 

 

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

 

10



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 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 Eunápolis (State of Bahia) (Veracel Celulose S.A. (“Veracel”), a 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. On September 29, 2016, we signed the instrument of investiture of the terminal.

 

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 established by the Company for the administration of Macuco Terminal, recognized on March 2016, 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.

 

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.

 

11



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

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

 

In May 2016, we started the acquisition of hardwood pulp produced by Klabin S.A. (“Klabin”), at its plant located in the city of Ortigueira, in the state of Paraná, as supply agreement signed between the parties and subject of disclosure to the market on May 4, 2015.

 

The agreement term is six years from the beginning of the plant operations (which may be extended upon agreement between the parties), being four years at a minimum volume of 900,000 tons of short fiber pulp (except if otherwise agreed between the parties) and two years of a gradual reduction of volume (phase out), equivalents to, respectively, 75% and 50% of the volume delivered in the fourth year of the agreement. The purchase price of the volume from Klabin will be based on the average net price charged by the Company and the volume acquired might be sold for countries outside South America.

 

(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.

 

The amount of R$ 477 million was received in advance the amount of R$ 477 million, recognized under “Liabilities related to the 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. Management’s best estimate is 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 September 30, 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 nine-month period ended September 30, 2016 and 2015, since that at this moment, the result of the transaction has not been recognized.

 

(c)                                 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.

 

12



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

The construction of Horizonte 2 Project has already started and consists of a new bleached eucalyptus pulp production line with a capacity of 1.95 million tons per year and an estimated investment of US$2.3 billion. The startup of the line is projected for the fourth quarter of 2017 and the physical execution is approximately 60% concluded.

 

The Project is being financed from the Company’s operating cash flows and financing agreements negotiated 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 derivative instruments) measured at fair value.

 

(a)                                Accounting policies adopted

 

The consolidated interim financial information have 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 consolidated 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 item 2.2.1 below and 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 unaudited consolidated interim financial information were approved by the Board of Directors on October 25, 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

 

13



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

circumstances. Accounting estimates will, by definition, seldom match the actual results. In the nine-month period ended September 30, 2016, except for the item 2.2.1 below, there were no significant changes in the critical 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.

 

2.2.1                    Changing on critical accounting estimates and assumptions

 

(a)                                Biological assets

 

The Company reviewed the assumptions used in the calculating of the fair value of biological assets and concluded as appropriate changing, from 2016, the assumption called “actual planted area”, so that the immature forests (up to two years from the date of planting) are maintained at historical cost, as a result of the Management’s understanding that during this period, the historical cost of biological assets approximates of their fair value. The purpose of this change is reflect the experience acquired in the measurement process of biological assets and the alignment of the calculation methodology to the Company’s forest management, which considers continuous forest inventories with the purpose of estimate the volume of timber stock or future production projections, represented by the average annual growth (“IMA”), from the third year of planting.

 

The assumption regarding the “net average sale price” of biological assets (measured in R$/m³) is now supported only in market prices research, in order to maximize the usage of external and independent data to measure the fair value of the forests.

 

If the aforementioned changes would not have been made, the fair value adjustment of biological assets would have generated a lower expense of R$ 30,471 in relation to the amount recognized in the nine-month period ended September 30, 2016.

 

The other assumptions used by the Company to calculate the fair value of biological assets have not changed. See details about the biological assets in Note 16.

 

14



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

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.

 

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 expects to have a material impact on the Company’s financial position and results of operations.

 

15



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

4                                        Risk management

 

On July 28, 2016, the Board of Directors approved the revision of the finance policy, with effective date as from August 2016, which main changes are related to the following risk factors:

 

Cash flow and fair value interest rate risk

 

The Company shall evaluate on an annual basis the optimal percentage between fixed-rate debts and debts with floating rates. This review will be made by the Treasury department and Governance, Risks and Compliance (“GRC”) department, who will report annually the results to the Finance Committee.

 

The Finance and Investor Relations Director is responsible for evaluating the hedging strategy of interest rate and inflation, considering the results of evaluation of the optimal percentage and market factors.

 

Banks and financial institutions

 

i)            if the Company decides working with private issuers that have more than one rating assessment, the median of the rating classifications will be considered if three risks rating are available and, the lower rating classification if two credit rating are available, issued by the following rating agencies: Fitch, Moody’s and Standard & Poor’s.

 

ii)         the rating required for the counterparties at the local level (Brazil), is “A” (or “A2”) or “BBB+” (or “Baa1) at the global level.

 

iii)      any private counterpart must have lonely concentration of, more than 25% of the resources under management for the Company and its Brazilians subsidiaries and, more than 27.5% for the foreign subsidiaries.

 

The rest of the policies disclosed in the annual financial statements (Note 4) as at December 31, 2015 has no 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 were 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.

 

16



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 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 September 30, 2016

 

 

 

 

 

 

 

 

 

Loans and financing

 

2,454,930

 

3,563,903

 

9,986,441

 

4,821,846

 

Derivative financial instruments

 

235,041

 

206,924

 

161,225

 

 

 

Trade and other payables

 

1,455,767

 

50,210

 

37,328

 

25,912

 

 

 

 

 

 

 

 

 

 

 

 

 

4,145,738

 

3,821,037

 

10,184,994

 

4,847,758

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2015

 

 

 

 

 

 

 

 

 

Loans and financing

 

1,358,138

 

4,451,707

 

7,326,394

 

2,817,802

 

Derivative financial 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

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Assets in foreign currency

 

 

 

 

 

Cash and cash equivalents (Note 7)

 

890,165

 

1,068,180

 

Trade accounts receivable (Note 10)

 

392,690

 

674,224

 

 

 

 

 

 

 

 

 

1,282,855

 

1,742,404

 

 

 

 

 

 

 

Liabilities in foreign currency

 

 

 

 

 

Loans and financing (Note 19)

 

(9,300,200

)

(10,215,115

)

Trade payables

 

(232,010

)

(76,304

)

Derivative financial instruments (Note 9(a))

 

(231,335

)

(1,081,533

)

 

 

 

 

 

 

 

 

(9,763,545

)

(11,372,952

)

 

 

 

 

 

 

Liability exposure

 

(8,480,690

)

(9,630,548

)

 

17



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

5                                        Sensitivity analysis

 

Sensitivity analysis of changes in foreign currency

 

The probable scenario is the closing exchange rate at the date of these consolidated interim financial information (R$ x USD = 3.2462). 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 U.S. Dollar is deemed to appreciate/depreciate by 25% and 50%, before tax, when compared to the “Probable” scenario:

 

 

 

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

 

 

 

Possible (25%)

 

Remote (50%)

 

 

 

 

 

 

 

Derivative financial instruments

 

768,171

 

1,574,280

 

Loans and financing

 

2,183,685

 

4,367,370

 

Cash and cash equivalents

 

207,121

 

414,241

 

 

Sensitivity analysis in changes in interest rate

 

We adopted as the probable scenario the fair value considering the market yield as at September 30, 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 increase/decrease of the interest rate on
the fair value - absolute amounts

 

 

 

Possible (25%)

 

Remote (50%)

 

 

 

 

 

 

 

Loans and financing

 

 

 

 

 

LIBOR

 

1,303

 

2,507

 

Currency basket

 

1,735

 

3,466

 

TJLP

 

1,622

 

3,221

 

Interbank Deposit Certificate (CDI)

 

5,103

 

10,067

 

 

 

 

 

 

 

Derivative financial instruments

 

 

 

 

 

LIBOR

 

9,897

 

18,140

 

TJLP

 

2,286

 

2,913

 

Interbank Deposit Certificate (CDI)

 

53,596

 

101,659

 

 

 

 

 

 

 

Marketable securities (a)

 

 

 

 

 

Interbank Deposit Certificate (CDI)

 

2,512

 

4,848

 

 


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

 

18



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

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 September 30, 2016. The “Probable” scenario was stressed considering an additional increase/decrease of 25% and 50% in the US-CPI for the definition of the scenarios “Possible” and “Remote”, respectively.

 

 

 

Impact of 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

 

109,137

 

224,254

 

 

6                                        Fair value estimates

 

In the nine-month period ended September 30, 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. There were no transfers between levels 1, 2 and 3 during the periods presented.

 

 

 

September 30, 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)

 

 

 

515,084

 

 

 

515,084

 

Warrant to acquire Ensyn’s shares (Note 15)

 

 

 

 

 

9,933

 

9,933

 

Marketable securities (Note 8)

 

58,821

 

2,306,479

 

 

 

2,365,300

 

 

 

 

 

 

 

 

 

 

 

Available for sale financial assets

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

103,977

 

103,977

 

 

 

 

 

 

 

 

 

 

 

Biological asset (Note 16)

 

 

 

 

 

4,323,741

 

4,323,741

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

58,821

 

2,821,563

 

4,437,651

 

7,318,035

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

At fair value through profit and loss

 

 

 

 

 

 

 

 

 

Derivative financial instruments (Note 9)

 

 

 

(519,160

)

 

 

(519,160

)

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 

(519,160

)

 

 

(519,160

)

 

19



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

 

 

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

)

 

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:

 

20



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

 

 

Yield used
to discount (*)

 

September
30, 2016

 

December
31, 2015

 

 

 

 

 

 

 

 

 

Quoted in the secondary market

 

 

 

 

 

 

 

In foreign currency

 

 

 

 

 

 

 

Bonds - VOTO IV

 

 

 

340,259

 

387,939

 

Bonds - Fibria Overseas

 

 

 

2,052,410

 

2,237,193

 

Estimated based on discounted cash flow

 

 

 

 

 

 

 

In foreign currency

 

 

 

 

 

 

 

Export credits (Pre-payments)

 

LIBOR USD

 

5,088,307

 

6,831,364

 

Finnvera

 

LIBOR USD

 

847,418

 

 

 

Export credits (ACC/ACE)

 

DDI

 

454,517

 

46,445

 

In local currency

 

 

 

 

 

 

 

BNDES — TJLP

 

Brazilian interbank rate (DI 1)

 

797,293

 

809,793

 

BNDES — Fixed rate

 

Brazilian interbank rate (DI 1)

 

111,379

 

107,797

 

BNDES — Selic

 

Brazilian interbank rate (DI 1)

 

22,436

 

11,110

 

Currency basket

 

Brazilian interbank rate (DI 1)

 

498,557

 

549,246

 

CRA

 

Brazilian interbank rate (DI 1)

 

2,633,647

 

658,573

 

FINEP

 

Brazilian interbank rate (DI 1)

 

1,803

 

2,063

 

FINAME

 

Brazilian interbank rate (DI 1)

 

2,735

 

4,951

 

NCE in Reais

 

Brazilian interbank rate (DI 1)

 

653,137

 

694,859

 

FCO

 

Brazilian interbank rate (DI 1)

 

13,832

 

21,303

 

FDCO

 

Brazilian interbank rate (DI 1)

 

355,043

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,872,773

 

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. The 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.

 

21



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

·             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 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 September 30, 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

 

14.03

 

1M

 

0.55

 

1M

 

(6.17

)

6M

 

13.33

 

6M

 

0.91

 

6M

 

0.54

 

1Y

 

12.48

 

1Y

 

0.94

 

1Y

 

1.39

 

2Y

 

11.73

 

2Y

 

1.01

 

2Y

 

2.09

 

3Y

 

11.58

 

3Y

 

1.07

 

3Y

 

2.49

 

5Y

 

11.60

 

5Y

 

1.18

 

5Y

 

3.37

 

10Y

 

11.78

 

10Y

 

1.47

 

10Y

 

3.93

 

 

7                                        Cash and cash equivalents

 

 

 

Average yield p.a. - %

 

September 30, 2016

 

December 31, 2015

 

 

 

 

 

 

 

 

 

Cash and banks

 

 

 

101,788

 

196,274

 

Fixed-term deposits

 

 

 

 

 

 

 

Local currency

 

101.69 of CDI

 

203,583

 

3,985

 

Foreign currency (i)

 

0.47

 

828,481

 

877,392

 

 

 

 

 

 

 

 

 

 

 

 

 

1,133,852

 

1,077,651

 

 


(i) Mainly Time Deposit maturing within 90 days.

 

22



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

8                                        Marketable securities

 

 

 

Average
yield p.a.- %

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

 

 

In local currency

 

 

 

 

 

 

 

Brazilian Federal provision fund

 

77 of CDI

 

9

 

250

 

Brazilian Federal Government securities

 

 

 

 

 

 

 

At fair value through profit and loss

 

79.80 of CDI

 

58,821

 

40,364

 

Held to maturity (i)

 

6 and 79.80 of CDI

 

77,210

 

73,914

 

Private securities (repurchase agreements)

 

100.43 of CDI

 

2,306,479

 

1,365,478

 

 

 

 

 

 

 

 

 

Marketable securities

 

 

 

2,442,519

 

1,480,006

 

 

 

 

 

 

 

 

 

Current

 

 

 

2,371,858

 

1,411,864

 

 

 

 

 

 

 

 

 

Non-Current

 

 

 

70,661

 

68,142

 

 


(i)        The yield of 79.80% of CDI refers to the investment fund — Pulp and the yield of 6% p.a. refers to the agrarian debt bonds.

 

The increase of R$ 962,513 in the nine-month period ended September 30, 2016 refers, mainly, to the funds raised in the period, as detailed in Note 19.

 

23



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

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

 

September
30, 2016

 

December
31, 2015

 

September
30, 2016

 

December
31, 2015

 

 

 

 

 

 

 

 

 

 

 

Instruments contracted of economic hedge strategy

 

 

 

 

 

 

 

 

 

Operational hedge

 

 

 

 

 

 

 

 

 

Cash flow hedges of exports

 

 

 

 

 

 

 

 

 

Zero cost collar

 

1,475,000

 

310,000

 

249,134

 

(8,627

)

 

 

 

 

 

 

 

 

 

 

Hedges of debts

 

 

 

 

 

 

 

 

 

Hedges of interest rates

 

 

 

 

 

 

 

 

 

Swap LIBOR x Fixed (USD)

 

604,670

 

622,907

 

(17,133

)

(8,902

)

 

 

 

 

 

 

 

 

 

 

Hedges of foreign currency

 

 

 

 

 

 

 

 

 

Swap DI x US$ (USD)

 

318,828

 

358,607

 

(293,686

)

(648,052

)

Swap TJLP x US$ (USD)

 

49,284

 

98,287

 

(80,431

)

(230,433

)

Swap Pre x US$ (USD)

 

89,144

 

112,107

 

(89,219

)

(185,519

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(231,335

)

(1,081,533

)

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Swap of US-CPI

 

824,293

 

857,710

 

227,259

 

253,572

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,076

)

(827,961

)

 

 

 

 

 

 

 

 

 

 

Classified

 

 

 

 

 

 

 

 

 

In current assets

 

 

 

 

 

199,836

 

26,795

 

In non-current assets

 

 

 

 

 

315,248

 

273,694

 

In current liabilities

 

 

 

 

 

(250,750

)

(302,787

)

In non-current liabilities

 

 

 

 

 

(268,410

)

(825,663

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,076

)

(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.

 

24



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 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

 

September
30, 2016

 

December
31, 2015

 

September
30, 2016

 

December
31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

Swap contracts - Hedge of debts

 

 

 

 

 

 

 

 

 

 

 

Asset

 

 

 

 

 

 

 

 

 

 

 

LIBOR to fixed

 

US$

 

604,670

 

622,907

 

1,911,706

 

2,308,517

 

Real CDI to USD

 

R$

 

622,134

 

698,559

 

1,006,536

 

1,058,346

 

Real TJLP to USD

 

R$

 

80,519

 

159,938

 

79,875

 

153,963

 

Real Pre to USD

 

R$

 

191,666

 

236,072

 

164,467

 

182,240

 

Liability

 

 

 

 

 

 

 

 

 

 

 

LIBOR to fixed

 

US$

 

604,670

 

622,907

 

(1,928,839

)

(2,317,419

)

Real CDI to USD

 

US$

 

318,828

 

358,607

 

(1,300,222

)

(1,706,398

)

Real TJLP to USD

 

US$

 

49,284

 

98,287

 

(160,306

)

(384,396

)

Real Pre to USD

 

US$

 

89,144

 

112,107

 

(253,686

)

(367,759

)

 

 

 

 

 

 

 

 

 

 

 

 

Total of swap contracts

 

 

 

 

 

 

 

(480,469

)

(1,072,906

)

 

 

 

 

 

 

 

 

 

 

 

 

Options - Cash flow hedge

 

 

 

 

 

 

 

 

 

 

 

Zero cost collar

 

US$

 

1,475,000

 

310,000

 

249,134

 

(8,627

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(231,335

)

(1,081,533

)

 

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

 

 

 

Fair value

 

Value (paid) or received

 

Type of derivative

 

September
30, 2016

 

December
31, 2015

 

September
30, 2016

 

December
31, 2015

 

 

 

 

 

 

 

 

 

 

 

Operational hedge

 

 

 

 

 

 

 

 

 

Cash flow hedge of exports

 

249,134

 

(8,627

)

10,804

 

(125,107

)

Hedge of debts

 

 

 

 

 

 

 

 

 

Hedge of interest rates

 

(17,133

)

(8,902

)

(14,205

)

(15,333

)

Hedge of foreign currency

 

(463,336

)

(1,064,004

)

(137,152

)

(279,191

)

 

 

 

 

 

 

 

 

 

 

 

 

(231,335

)

(1,081,533

)

(140,553

)

(419,631

)

 

25



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

(d)                                Fair value and counterparty by maturity date of economic hedge strategy contracts

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

2016

 

7,575

 

(281,423

)

2017

 

(34,417

)

(396,982

)

2018

 

(121,735

)

(280,340

)

2019

 

(51,623

)

(76,408

)

2020

 

(31,135

)

(46,380

)

 

 

 

 

 

 

 

 

(231,335

)

(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 September 30, 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

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Domestic customers

 

88,921

 

75,281

 

Export customers

 

392,690

 

674,224

 

 

 

 

 

 

 

 

 

481,611

 

749,505

 

 

 

 

 

 

 

Allowance for doubtful accounts

 

(6,833

)

(7,153

)

 

 

 

 

 

 

 

 

474,778

 

742,352

 

 

In the nine-month period ended September 30, 2016, we made some credit assignment without recourse for certain customers’ receivables, in the amount of R$ 1,794,735 (R$ 1,788,970 at December 31, 2015), that were derecognized from accounts receivable in the balance sheet. The amounts regarding to these credit assignment were received by us.

 

26



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

11                                 Inventory

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Finished goods at plants/warehouses

 

 

 

 

 

Brazil

 

266,235

 

155,286

 

Abroad

 

870,902

 

731,498

 

Work in progress

 

20,578

 

12,935

 

Raw materials

 

462,198

 

520,445

 

Supplies

 

164,949

 

150,838

 

Imports in transit

 

2,788

 

144

 

 

 

 

 

 

 

 

 

1,787,650

 

1,571,146

 

 

12                                 Recoverable taxes

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

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

 

1,022,289

 

762,743

 

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

 

24,964

 

26,235

 

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

 

1,035,677

 

978,399

 

Federal tax credits

 

 

 

356,058

 

Credit related to Reintegra Program

 

85,744

 

91,145

 

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

 

706,672

 

727,210

 

Provision for the impairment of ICMS credits

 

(1,040,865

)

(967,332

)

 

 

 

 

 

 

 

 

1,834,481

 

1,974,458

 

 

 

 

 

 

 

Current

 

224,069

 

462,487

 

 

 

 

 

 

 

Non-current

 

1,610,412

 

1,511,971

 

 

During the nine-month period ended September 30, 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 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.

 

27



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 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

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Tax loss carryforwards (i)

 

421,686

 

54,888

 

Provision for legal proceeds

 

133,693

 

119,924

 

Sundry provisions (impairment, operational and other)

 

537,457

 

637,176

 

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

 

1,386

 

281,507

 

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

 

1,425,504

 

2,396,243

 

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

 

97,872

 

99,196

 

Actuarial gains on medical assistance plan (SEPACO)

 

3,743

 

3,743

 

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

 

(609,881

)

(338,315

)

Tax accelerated depreciation

 

(14,111

)

(7,324

)

Reforestation costs already deducted for tax purposes

 

(449,425

)

(387,568

)

Fair values of biological assets

 

(121,733

)

(174,450

)

Tax benefit of goodwill - goodwill not amortized for accounting purposes

 

(603,846

)

(536,752

)

Transaction costs and capitalized financing costs

 

(63,438

)

(5,347

)

Other provisions

 

(7,534

)

(14,704

)

 

 

 

 

 

 

Total deferred taxes asset, net

 

751,373

 

2,128,217

 

 

 

 

 

 

 

Deferred taxes - asset (net by entity)

 

1,122,895

 

2,399,213

 

 

 

 

 

 

 

Deferred taxes - liability (net by entity)

 

371,522

 

270,996

 

 


(i)        The balance as at September 30, 2016 is presented net of R$ 304,227 (R$ 346,291 as at December 31, 2015) related to the provision for impairment for foreign tax losses.

 

28



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

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

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

At the beginning of the period

 

2,128,217

 

924,308

 

Tax loss carryforwards

 

366,798

 

(137,759

)

Temporary differences from provisions

 

(85,950

)

198,028

 

Provision for tax on investments in foreign-domiciled subsidiaries

 

(271,566

)

(312,338

)

Derivative financial instruments taxed on a cash basis

 

(280,121

)

139,569

 

Amortization of goodwill

 

(68,418

)

(92,598

)

Reforestation costs

 

(68,644

)

(36,605

)

Exchange losses (net) taxed on a cash basis

 

(970,739

)

1,483,024

 

Fair value of biological assets

 

52,717

 

(21,430

)

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

 

 

 

(2,866

)

Transaction costs and capitalized financing costs

 

(58,091

)

(5,347

)

Other

 

7,170

 

(7,769

)

 

 

 

 

 

 

At the end of the period

 

751,373

 

2,128,217

 

 


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

 

(b)                                Reconciliation of taxes on income

 

 

 

September 30,
2016

 

September 30,
2015

 

 

 

 

 

 

 

Income (loss) before tax

 

3,154,318

 

(1,522,491

)

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

 

(1,072,468

)

517,647

 

 

 

 

 

 

 

Reconciliation to effective expense:

 

 

 

 

 

Equity in results of joint-venture

 

(258

)

253

 

Credit from Reintegra Program

 

1,372

 

18,604

 

Benefits to directors

 

(10,538

)

(6,292

)

Foreign exchange effects on foreign subsidiaries (i)

 

(294,983

)

452,174

 

Other, mainly non-deductible provisions

 

(22,309

)

(12,894

)

 

 

 

 

 

 

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

 

(1,399,184

)

969,492

 

 

 

 

 

 

 

Effective rate - %

 

44.4

 

63.7

 

 


(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.

 

29



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

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 shares (together the “Controlling Shareholders”). The Company’s commercial and financial transactions with its subsidiaries, Votorantim Group’s entities 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 nine-month period ended September 30, 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.

 

30



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

(i)                                   Balances recognized in assets and liabilities

 

 

 

Balances receivable (payable)

 

 

 

Nature

 

September
30, 2016

 

December
31, 2015

 

 

 

 

 

 

 

 

 

Transactions with controlling shareholders

 

 

 

 

 

 

 

Votorantim S.A.

 

Rendering of services

 

(418

)

(9

)

Votorantim S.A.

 

Land leases

 

 

 

(851

)

BNDES

 

Financing

 

(1,573,654

)

(1,851,408

)

 

 

 

 

 

 

 

 

 

 

 

 

(1,574,072

)

(1,852,268

)

 

 

 

 

 

 

 

 

Transactions with Votorantim Group’ entities

 

 

 

 

 

 

 

Votorantim S.A.

 

Financing

 

9,739

 

11,714

 

Votener - Votorantim Comercializadora e Energia

 

Energy supplier

 

1,171

 

6,937

 

Banco Votorantim S.A.

 

Investments

 

187,273

 

32,806

 

Banco Votorantim S.A.

 

Financial instruments

 

2,751

 

(1,066

)

Votorantim Cimentos S.A.

 

Energy supplier

 

 

 

517

 

Votorantim Cimentos S.A.

 

Input supplier

 

(51

)

(50

)

Polimix Concreto Ltda.

 

Input supplier

 

 

 

(143

)

Votorantim Siderurgia

 

Standing wood supplier

 

(2,176

)

(4,164

)

Sitrel Siderurgia Três Lagoas

 

Land leases

 

(10

)

 

 

Pedreira Pedra Negra

 

Input supplier

 

 

 

(21

)

Votorantim Metais Ltda.

 

Chemical products supplier

 

(491

)

(277

)

Companhia Brasileira de Alumínio - CBA

 

Land leases

 

(699

)

(695

)

 

 

 

 

 

 

 

 

 

 

 

 

197,507

 

45,558

 

Net

 

 

 

(1,376,565

)

(1,806,710

)

 

 

 

 

 

 

 

 

Presented in the following lines

 

 

 

 

 

 

 

In assets

 

 

 

 

 

 

 

Marketable securities (Note 8)

 

 

 

187,273

 

32,806

 

Derivative financial instruments (Note 9)

 

 

 

2,751

 

 

 

Related parties - non-current

 

 

 

9,739

 

11,714

 

Other assets - current

 

 

 

1,171

 

7,454

 

In liabilities

 

 

 

 

 

 

 

Loans and financing (Note 19)

 

 

 

(1,573,654

)

(1,851,408

)

Derivative financial instruments (Note 9)

 

 

 

 

 

(1,066

)

Suppliers

 

 

 

(3,845

)

(6,210

)

 

 

 

 

(1,376,565

)

(1,806,710

)

 

31



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

(ii)                               Amounts transacted in the period

 

 

 

Nature

 

September
30, 2016

 

September
30, 2015

 

 

 

 

 

 

 

 

 

Transactions with controlling shareholders

 

 

 

 

 

 

 

Votorantim S.A.

 

Rendering of services

 

(8,357

)

(7,592

)

BNDES

 

Financing

 

15,575

 

(352,205

)

 

 

 

 

7,218

 

(359,797

)

 

 

 

 

 

 

 

 

Transactions with Votorantim Group’s entities

 

 

 

 

 

 

 

Votorantim S.A.

 

Financing

 

(1,975

)

3,950

 

Votener - Votorantim Comercializadora de Energia

 

Energy supplier

 

(13,588

)

67,125

 

Banco Votorantim S.A.

 

Investments

 

3,908

 

1,758

 

Banco Votorantim S.A.

 

Financial instruments

 

2,703

 

(1,016

)

Banco Votorantim S.A.

 

Rendering of services

 

(1,500

)

 

 

Votorantim CTVM Ltda.

 

Rendering of services

 

(119

)

 

 

Votorantim Cimentos S.A.

 

Energy supplier

 

7,892

 

4,907

 

Votorantim Cimentos S.A.

 

Input supplier

 

(224

)

(79

)

Votorantim Cimentos S.A.

 

Selling of wood

 

 

 

126

 

Votorantim Siderurgia S.A.

 

Standing wood supplier

 

(9,734

)

3,361

 

Sitrel Siderurgia Três Lagoas

 

Energy supplier

 

5,332

 

 

 

Sitrel Siderurgia Três Lagoas

 

Land leases

 

(10

)

 

 

Pedreira Pedra Negra

 

Input supplier

 

(78

)

(219

)

Votorantim Metais Ltda.

 

Chemical products supplier

 

(7,566

)

(3,155

)

Votorantim Metais Ltda.

 

Land leases

 

 

 

(2,318

)

Companhia Brasileira de Alumínio - CBA

 

Land leases

 

(399

)

(2,541

)

 

 

 

 

(15,358

)

71,899

 

 

(b)                                Key management compensation

 

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

 

 

 

September 30,
2016

 

September 30,
2015

 

 

 

 

 

 

 

Benefits to officers and directors (i)

 

12,091

 

37,347

 

Benefit program - Phantom Stock Options and Stock Options plans

 

(8,974

)

12,950

 

 

 

3,117

 

50,297

 

 


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

 

The amount of R$ 3,117 recognized as provision or reversal of provision in the nine-month period ended September 30, 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

 

32



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

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$ 954 for the nine-month period ended September 30, 2016 (R$ 713 for the nine-month period ended September 30, 2015).

 

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:

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Current liability

 

 

 

 

 

Payroll, profit sharing and related charges

 

13,444

 

37,563

 

 

 

 

 

 

 

Non-current liability

 

 

 

 

 

Other payables

 

2,100

 

9,401

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

Capital reserve

 

4,637

 

9,329

 

 

 

20,181

 

56,293

 

 

15                                 Investments

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Investment in joint-venture - equity method

 

3,260

 

751

 

Other investments - at fair value (i)

 

113,910

 

137,020

 

 

 

117,170

 

137,771

 

 


(i)        Fair value change in our interest in Ensyn was not significant in the nine-month period ended September 30, 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 21.

 

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

 

33



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

16                                 Biological assets

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

At the beginning of the period

 

4,114,998

 

3,707,845

 

 

 

 

 

 

 

Additions

 

1,115,127

 

1,344,355

 

Harvests in the year (depletion)

 

(796,600

)

(1,102,725

)

Change in fair value - step up

 

(108,014

)

184,583

 

Disposals / provision for disposals

 

(1,770

)

(19,063

)

Transfer (i)

 

 

 

3

 

At the end of the period

 

4,323,741

 

4,114,998

 

 


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

 

17                                 Property, plant and equipment

 

 

 

Land

 

Buildings

 

Machinery,
equipment
and facilities

 

Property, plant
and equipment
in progress (i)

 

Other (ii)

 

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 (iii)

 

 

 

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

 

 

 

575

 

6,704

 

3,140,594

 

1,176

 

3,149,049

 

Disposals

 

(413

)

(4,964

)

(17,916

)

 

 

(423

)

(23,716

)

Depreciation

 

 

 

(88,567

)

(489,999

)

 

 

(13,151

)

(591,717

)

Transfers and others (iii)

 

6,147

 

82,844

 

194,041

 

(336,165

)

76,665

 

23,532

 

At September 30, 2016

 

1,642,654

 

1,281,172

 

5,673,377

 

3,271,447

 

121,884

 

11,990,534

 

 


(i)        Includes the amount of R$ 3,066,300 regarding the Horizonte 2 Project.

 

(ii)     Includes vehicles, furniture, IT equipment and others.

 

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

 

34



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

18                                 Intangible assets

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

At the beginning of the period

 

4,505,634

 

4,552,103

 

Additions

 

116,134

 

8

 

Amortization

 

(50,704

)

(76,021

)

Disposals

 

(98

)

(67

)

Transfers and others (*)

 

13,139

 

29,611

 

At the end of the period

 

4,584,105

 

4,505,634

 

 

 

 

 

 

 

Composed by

 

 

 

 

 

Goodwill — Aracruz

 

4,230,450

 

4,230,450

 

Systems development and deployment

 

32,156

 

28,677

 

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

 

115,047

 

 

 

Acquired from business combination

 

 

 

 

 

Databases

 

102,600

 

136,800

 

Relationships with suppliers - chemical products

 

85,078

 

92,812

 

Other

 

18,774

 

16,895

 

 

 

4,584,105

 

4,505,634

 

 


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

 

35



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 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 - %

 

September
30, 2016

 

December
31, 2015

 

September
30, 2016

 

December
31, 2015

 

September
30, 2016

 

December
31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In foreign currency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BNDES - currency basket

 

UMBNDES

 

6.5

 

72,141

 

78,632

 

493,370

 

652,610

 

565,511

 

731,242

 

Bonds - US$

 

Fixed

 

5.6

 

44,764

 

15,801

 

2,235,918

 

2,686,105

 

2,280,682

 

2,701,906

 

Finnvera

 

LIBOR

 

2.5

 

4,389

 

 

 

831,497

 

 

 

835,886

 

 

 

Export credits (prepayment)

 

LIBOR

 

2.5

 

313,583

 

595,795

 

4,849,769

 

6,141,049

 

5,163,352

 

6,736,844

 

Export credits (ACC/ACE)

 

Fixed

 

1.6

 

454,769

 

45,123

 

 

 

 

 

454,769

 

45,123

 

 

 

 

 

 

 

889,646

 

735,351

 

8,410,554

 

9,479,764

 

9,300,200

 

10,215,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Reais

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BNDES

 

TJLP

 

6.5

 

170,651

 

186,937

 

679,324

 

776,421

 

849,975

 

963,358

 

BNDES

 

Fixed

 

5.75

 

33,069

 

29,745

 

89,213

 

100,460

 

122,282

 

130,205

 

BNDES

 

Selic

 

6.9

 

753

 

18

 

35,133

 

26,585

 

35,886

 

26,603

 

FINAME

 

TJLP/Fixed

 

3.1

 

2,226

 

3,236

 

668

 

2,226

 

2,894

 

5,462

 

CRA

 

CDI

 

11.46

 

96,941

 

16,687

 

2,676,798

 

659,275

 

2,773,739

 

675,962

 

NCE

 

CDI

 

12.39

 

304,498

 

88,855

 

365,596

 

613,177

 

670,094

 

702,032

 

FCO, FDCO and FINEP

 

Fixed

 

8.0

 

11,988

 

12,048

 

425,281

 

13,047

 

437,269

 

25,095

 

 

 

 

 

 

 

620,126

 

337,526

 

4,272,013

 

2,191,191

 

4,892,139

 

2,528,717

 

 

 

 

 

 

 

1,509,772

 

1,072,877

 

12,682,567

 

11,670,955

 

14,192,339

 

12,743,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

 

 

 

257,301

 

94,172

 

76,586

 

109,658

 

333,887

 

203,830

 

Short-term borrowing

 

 

 

 

 

454,468

 

44,905

 

 

 

 

 

454,468

 

44,905

 

Long-term borrowing

 

 

 

 

 

798,003

 

933,800

 

12,605,981

 

11,561,297

 

13,403,984

 

12,495,097

 

 

 

 

 

 

 

1,509,772

 

1,072,877

 

12,682,567

 

11,670,955

 

14,192,339

 

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.

 

36



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

 

(b)                                Breakdown by maturity

 

 

 

2017

 

2018

 

2019

 

2020

 

2021

 

2022

 

2023

 

2024

 

2025

 

2026

 

2027

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In foreign currency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BNDES - currency basket

 

22,635

 

66,478

 

53,987

 

148,392

 

156,660

 

38,509

 

6,709

 

 

 

 

 

 

 

 

 

493,370

 

Bonds - US$

 

 

 

 

 

 

 

310,543

 

 

 

 

 

 

1,925,375

 

 

 

 

 

 

 

2,235,918

 

Finnvera

 

 

 

103,937

 

103,937

 

103,937

 

103,937

 

103,937

 

103,937

 

103,937

 

103,938

 

 

 

 

 

831,497

 

Export credits (prepayment)

 

154,703

 

1,153,532

 

2,450,621

 

360,859

 

730,054

 

 

 

 

 

 

 

 

 

 

 

 

 

4,849,769

 

 

 

177,338

 

1,323,947

 

2,608,545

 

923,731

 

990,651

 

142,446

 

110,646

 

2,029,312

 

103,938

 

 

 

 

 

8,410,554

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Reais

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BNDES - TJLP

 

44,351

 

121,486

 

91,517

 

157,551

 

168,857

 

56,428

 

26,666

 

12,468

 

 

 

 

 

 

 

679,324

 

BNDES - Fixed rate

 

8,533

 

33,197

 

27,093

 

15,200

 

4,791

 

399

 

 

 

 

 

 

 

 

 

 

 

89,213

 

BNDES - Selic

 

355

 

1,419

 

1,419

 

1,419

 

554

 

1,409

 

14,900

 

13,658

 

 

 

 

 

 

 

35,133

 

FINAME

 

501

 

167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

668

 

CRA

 

 

 

 

 

 

 

1,187,050

 

661,292

 

 

 

828,456

 

 

 

 

 

 

 

 

 

2,676,798

 

NCE

 

21,252

 

257,894

 

43,225

 

43,225

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

365,596

 

FCO, FDCO and FINEP

 

2,974

 

659

 

47,448

 

46,775

 

46,775

 

46,775

 

46,775

 

46,775

 

46,775

 

46,775

 

46,775

 

425,281

 

 

 

77,966

 

414,822

 

210,702

 

1,451,220

 

882,269

 

105,011

 

916,797

 

72,901

 

46,775

 

46,775

 

46,775

 

4,272,013

 

 

 

255,304

 

1,738,769

 

2,819,247

 

2,374,951

 

1,872,920

 

247,457

 

1,027,443

 

2,102,213

 

150,713

 

46,775

 

46,775

 

12,682,567

 

 

37



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

(c)                                 Breakdown by currency

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Real

 

4,856,253

 

2,502,114

 

U.S. Dollar

 

8,734,689

 

9,483,873

 

Selic

 

35,886

 

26,603

 

Currency basket

 

565,511

 

731,242

 

 

 

14,192,339

 

12,743,832

 

 

(d)                                Roll forward

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

At the beginning of period

 

12,743,832

 

8,326,519

 

Borrowings

 

5,330,223

 

3,118,475

 

Interest expense

 

497,106

 

479,287

 

Foreign exchange losses (gains)

 

(1,750,028

)

3,037,653

 

Repayments - principal amount

 

(2,175,817

)

(1,800,670

)

Interest paid

 

(359,539

)

(405,546

)

Additional transaction costs

 

(105,126

)

(30,486

)

Other (*)

 

11,688

 

18,600

 

At the end of the period

 

14,192,339

 

12,743,832

 

 


(*)    It includes amortization of transactions costs.

 

(e)                                 Relevant operations settled in the period

 

Export credits - ACC

 

During the nine-month period ended September 30, 2016, the Company paid some export contracts (ACC) in the amount of US$ 404 million (equivalent then to R$ 1,387,578), which interest rate were between 1.24% and 1.99% p.a.

 

(f)                                  Relevant operations contracted in the period

 

Export credits — ACC and ACE

 

During the nine-month period ended September 30, 2016, the Company, through its subsidiary Fibria-MS, entered into export contracts (ACC and ACE) in the amount of US$ 140 million (equivalent then to R$ 462,252), which matures through October 2016 with a fixed interest rate between 1.55% and 1.60% p.a.

 

Agribusiness Credit Receivable Certificates - CRA

 

During the nine-month period ended September 30, 2016, the Company concluded three public distributions with restrict efforts of Agribusiness Credit Receivable Certificates issued by Eco

 

38



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

Securitizadora de Direitos Creditórios do Agronegócio S.A. In the first distribution, the total amount released was R$ 1,350 million, in two tranches, being the first tranche in the amount of R$ 880 million, with maturity for the principal in 2020, payments of interest semi-annually and an interest rate of 97% of CDI and the second tranche in the amount of R$ 470 million, with maturity for the principal in 2023, payments of interest annually and an interest rate of IPCA plus 5.9844% p.a. The funds were received by the Company on June 23, 2016. In the second distribution, the total amount released was R$ 374 million, with maturity for the principal in 2023, payments of interest annually and an interest rate of IPCA plus 5.9844% p.a. The funds were received by the Company on August 15, 2016. In the third distribution, the total amount released was R$ 326 million, with maturity for the principal in 2020, payments of interest semi-annually and an interest rate of 97% of CDI. The funds were received by the Company on August 31, 2016. The events of default of the contract are reflected in the item (g) below.

 

Finnvera (Finnish Development Agency)

 

In May 2016, the Company, through its subsidiary Fibria-MS, entered into a loan agreement for the financing of imported equipment for the second pulp production line in Três Lagoas (Horizonte 2 Project). The total amount raised was U.S. Dollar equivalent to € 383,873 thousand with the financial institutions BNP Paribas, Finnish Export Credit, HSBC Bank and Nordea, totally guaranteed by Finnvera (Export Credit Agency). During the nine-month period ended September 30, 2016, the amount of US$ 275 million (equivalents then R$ 919,628) was released in three tranches of US$ 194 million, US$ 67 million and US$ 14 million, maturing in December 2025 and interest rates at semi-annual LIBOR plus 1.03% p.a. for the first tranche and semi-annual LIBOR plus 1.08% p.a. for the second and third tranches. The remaining balance not released of U.S. Dollar equivalent to € 140,120 thousand, will be released according to the payments for the suppliers of the project. The events of default of the contract are reflected in the item (g) below.

 

Middle West Development Fund (FDCO)

 

In September 2016, the Company, through its subsidiary Fibria-MS, raised R$ 423,621 from the total of R$ 831,478 contracted with Banco do Brasil, with an interest rate of 8.0% p.a., monthly payments of principal and interest as from June 2019 and final maturity in December 2027. The remaining balance of R$ 407,857 might be released until the end of 2016.

 

(g)                                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 4.5 times.

 

The Company is in full compliance with the covenants established in the financial contracts at September 30, 2016.

 

The loan and financing agreements with debt financial covenants also present the following events of default:

 

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

 

39



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

·             Inaccuracy of any declaration, guarantee or certification provided.

 

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

 

·             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.

 

·             Expropriation, confiscation or any other action affecting a significant portion of the Company’s assets;

 

·             Addiction, invalidity, ineffectiveness or unenforceability of the contract;

 

·             Extinction or termination the contract for any reason or person;

 

·             Split of the Company without the prior consent of the creditor;

 

·             Any direct or indirect controlling which does not integrate the Votorantim Group, to perform any act aimed annul, revise, cancel or repudiate by judicial or extrajudicial means the contract;

 

·             Compliance with certain environmental and social conditions on the Horizon Project 2, for Finnvera’s contract.

 

20                                 Trade payables

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

Local currency

 

 

 

 

 

Related parties

 

4,885

 

5,738

 

Third parties (i)

 

1,105,814

 

585,975

 

Foreign currency

 

 

 

 

 

Third parties

 

232,010

 

76,304

 

 

 

1,342,709

 

668,017

 

 


(i)        As mentioned in Note 1 (a), we have a long-term supply agreement of hardwood pulp with Klabin in different conditions in terms of volume, exclusivity, guarantees and payment terms up to 360 days, whose prices were practiced in market conditions, as established in the agreement.

 

As at September 30, 2016, the amount of R$ 489,127 (zero as at December 31, 2015) refers to pulp purchases of the contract abovementioned.

 

40



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

21                                 Provision for contingencies

 

 

 

September 30, 2016

 

December 31, 2015

 

 

 

Judicial
deposits

 

Provision

 

Net

 

Judicial
deposits

 

Provision

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nature of claims

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax

 

105,327

 

111,359

 

6,032

 

96,997

 

106,571

 

9,574

 

Labor

 

70,746

 

229,159

 

158,413

 

64,429

 

201,561

 

137,132

 

Civil

 

21,021

 

42,329

 

21,308

 

18,918

 

37,537

 

18,619

 

 

 

197,094

 

382,847

 

185,753

 

180,344

 

345,669

 

165,325

 

 

The change in the provision for contingencies is as follows:

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

 

 

 

 

At the beginning of the period

 

345,669

 

302,144

 

Settlement

 

(1,751

)

(16,334

)

Reversal

 

(12,767

)

(38,196

)

New litigation

 

14,503

 

37,089

 

Accrual of financial charges

 

37,193

 

60,966

 

At the end of the period

 

382,847

 

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 was notified of the decision on May 25, 2016 and due to the impossibility of new resources and the consequent closure of the case at the administrative level, decided to continue the discussion with the Judiciary and the presentation of challenge is pending by the Union. The Company presented judicial guarantee, which was accepted and maintains 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 September 30, 2016 was R$ 1,646,813.

 

41



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 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 extinguished.

 

Tax assessment - IRPJ/CSLL - Fibria Overseas Holding

 

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

 

Tax assessment - IRPJ/CSLL - Newark

 

On February 3, 2016, CARF judged favorably 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 extinguished.

 

22                                 Revenue

 

(a)                                Reconciliation

 

 

 

September 30,
2016

 

September 30,
2015

 

 

 

 

 

 

 

Gross amount

 

9,067,147

 

9,018,281

 

Sales taxes

 

(173,295

)

(143,054

)

Discounts and returns (*)

 

(1,812,842

)

(1,779,175

)

Net revenues

 

7,081,010

 

7,096,052

 

 


(*)    Related mainly to trade discounts.

 

(b)                                Information about markets

 

 

 

September 30,
2016

 

September 30,
2015

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

Domestic market

 

703,044

 

564,612

 

Export market

 

6,312,661

 

6,461,801

 

Services

 

65,305

 

69,639

 

 

 

7,081,010

 

7,096,052

 

 

42



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

23                                 Financial results

 

 

 

September 30,
2016

 

September 30,
2015

 

 

 

 

 

 

 

Financial expenses

 

 

 

 

 

Interest on loans and financing (i)

 

(426,776

)

(329,689

)

Loans commissions

 

(16,329

)

(7,344

)

Others

 

(91,398

)

(60,913

)

 

 

 

 

 

 

 

 

(534,503

)

(397,946

)

 

 

 

 

 

 

Financial income

 

 

 

 

 

Financial investment earnings

 

126,127

 

65,756

 

Others (ii)

 

63,430

 

66,426

 

 

 

 

 

 

 

 

 

189,557

 

132,182

 

 

 

 

 

 

 

Gains (losses) on derivative financial instruments

 

 

 

 

 

Gains

 

1,063,671

 

480,198

 

Losses

 

(380,337

)

(1,369,677

)

 

 

 

 

 

 

 

 

683,334

 

(889,479

)

 

 

 

 

 

 

Foreign exchange losses and monetary adjustment, net

 

 

 

 

 

Loans and financing

 

1,750,028

 

(3,254,485

)

Other assets and liabilities (iii)

 

(274,905

)

627,441

 

 

 

 

 

 

 

 

 

1,475,123

 

(2,627,044

)

Net

 

1,813,511

 

(3,782,287

)

 


(i)        Does not include the amount of R$ 70,330 as at September 30, 2016 (R$ 2,438 as at September 30, 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.

 

43



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

24                                 Expenses by nature

 

 

 

September 30,
2016

 

September 30,
2015

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

Depreciation, depletion and amortization

 

(1,385,378

)

(1,390,903

)

Freight

 

(656,553

)

(656,709

)

Labor expenses

 

(406,822

)

(358,997

)

Variable costs (raw materials, miscellaneous materials and inventories for resale)

 

(2,567,803

)

(1,839,956

)

 

 

(5,016,556

)

(4,246,565

)

 

 

 

 

 

 

Selling expenses

 

 

 

 

 

Labor expenses

 

(24,492

)

(21,526

)

Selling expenses (i)

 

(293,224

)

(266,897

)

Operational leasing

 

(1,609

)

(1,340

)

Depreciation and amortization charges

 

(7,418

)

(7,398

)

Other expenses

 

(18,785

)

(15,397

)

 

 

(345,528

)

(312,558

)

 

 

 

 

 

 

General and administrative

 

 

 

 

 

Labor expenses

 

(77,922

)

(73,849

)

Third-party services

 

(77,019

)

(77,786

)

Depreciation and amortization

 

(10,054

)

(12,055

)

Taxes and contributions

 

(4,805

)

(4,837

)

Operating leases and insurance

 

(8,309

)

(6,552

)

Other expenses

 

(23,398

)

(19,728

)

 

 

(201,507

)

(194,807

)

 

 

 

 

 

 

Other operating (expenses) income

 

 

 

 

 

Programs of variable compensation (ii)

 

(42,215

)

(95,531

)

Loss on disposal of property, plant and equipment

 

(22,127

)

(15,665

)

Tax credits

 

12,282

 

2,195

 

Provision of contingencies

 

(14,129

)

(7,928

)

Changes in fair value of biological assets

 

(108,014

)

29,831

 

Others

 

(1,651

)

4,028

 

 

 

(175,854

)

(83,070

)

 


(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.

 

44



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

25                                 Earnings per share

 

(a)                                Basic

 

 

 

September 30,
2016

 

September 30,
2015

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

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

 

1,747,103

 

(563,286

)

 

 

 

 

 

 

Denominator

 

 

 

 

 

Weighted average number of common shares outstanding

 

553,590,604

 

553,591,281

 

Basic earnings (loss) per share - in Reais

 

3.16

 

(1.02

)

 

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 nine-month period ended September 30, 2016 and 2015, without considering treasury shares, for total of 344,042 shares in the nine-month period ended September 30, 2016 and 2015. In the nine-month period ended September 30, 2016 and 2015 there were no changes in the number of shares of Company.

 

(b)                                Diluted

 

 

 

September 30,
2016

 

September 30,
2015

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

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

 

1,747,103

 

(563,286

)

 

 

 

 

 

 

Denominator

 

 

 

 

 

Weighted average number of common shares outstanding

 

553,590,604

 

553,591,281

 

Dilution effect

 

 

 

 

 

Stock options

 

894,976

 

687,840

 

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

 

554,485,580

 

554,279,121

 

Diluted earnings (loss) per share (in Reais)

 

3.15

 

(1.02

)

 

45



 

Fibria Celulose S.A.

 

Notes to the unaudited consolidated interim financial information at September 30, 2016

In thousands of Reais, unless otherwise indicated

 

26                                 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 September 30, 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.

 

27                                 Subsequent event

 

On October 7, 2016, the Company approved the public distributions of Agribusiness Credit Receivable Certificates (CRA) to be issued by Eco Securitizadora de Direitos Creditórios do Agronegócio S.A., until the amount of R$ 1,700,000, in two tranches, being the first tranche with maturity for the principal in 2022 and an interest rate of 99% of CDI and the second tranche with maturity for the principal in 2023 and an interest rate indexed to NTN-B 24. The Agribusiness Credit Receivable Certificates will be backed in Export Credit Notes (“NCEs”) to be issued by the Company.

 

*         *         *

 

46



 

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: October 31st, 2016

 

 

Fibria Celulose S.A.

 

 

 

 

By:

/s/  Guilherme Perboyre Cavalcanti

 

Name:

Guilherme Perboyre Cavalcanti

 

Title:

CFO and IRO

 




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