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Introduction & Market Context
Empresas Copec (SNSE:BCS:COPEC) presented its first quarter 2025 results on May 13, 2025, revealing a mixed performance across its business divisions. The company reported an EBITDA of $774 million, representing a 20.3% increase quarter-over-quarter but an 8.4% decrease year-over-year. Following the announcement, the stock showed a modest positive reaction, with shares trading at 6,600, up from the previous close of 6,586.9.
The quarter was characterized by divergent performance across the company’s main business segments, with the Energy division showing strong growth while the Forestry division faced headwinds from lower pulp prices and reduced volumes.
Quarterly Performance Highlights
Empresas Copec reported consolidated sales of $7.25 billion for Q1 2025, representing a 1.8% increase year-over-year and a 7.0% increase quarter-over-quarter. Net income reached $208 million, up 8.9% from the previous quarter but down 8.5% compared to the same period last year.
As shown in the following key financial results slide, the company’s performance varied significantly across business divisions:
The Energy division demonstrated robust performance, with Copec’s EBITDA increasing by 6.1% year-over-year and an impressive 57.1% quarter-over-quarter to 309,949 million Chilean pesos. Abastible showed even stronger growth, with EBITDA surging 53.2% year-over-year and 63.7% quarter-over-quarter to 63,713 million Chilean pesos.
In contrast, the Forestry division faced challenges, with Pulp EBITDA declining 30.1% year-over-year and 5.1% quarter-over-quarter to $252 million. Wood Products performed slightly better, with EBITDA increasing 2.7% year-over-year but decreasing 18.6% quarter-over-quarter to $118 million.
The following chart illustrates the EBITDA and Net Income trends over recent quarters:
Detailed Financial Analysis
Empresas Copec maintained a relatively stable financial position with a Net Financial Debt to EBITDA ratio of 2.78x, representing a 16.4% improvement year-over-year but a 7.1% increase quarter-over-quarter. The company’s debt structure remains diversified, with 66% held by Arauco, 15% by Copec, 12% by EC Holding, and the remainder split between Abastible and Igemar.
The company’s financial review slide provides a comprehensive overview of its debt structure and key ratios:
Capital expenditures for the quarter totaled $406 million, with 85% allocated to the forestry segment and 15% to energy. The company reported an EBITDA margin of 11.9% and a Return on Capital Employed (ROCE) of 7.6%.
Divisional Performance
The Forestry division, primarily through Arauco, faced significant challenges during the quarter. Arauco reported a net loss of $26 million, a decrease of $126 million compared to the previous year. The decline was attributed to lower pulp prices and decreased wood product volumes.
The following slide details Arauco’s performance:
In the pulp business, unit selling costs showed mixed trends across different product categories. The outlook for pulp prices suggests that demand in China and Europe will remain positive, though current prices remain under pressure.
The pulp price outlook is illustrated in the following slide:
The Energy division, particularly Copec in Chile, demonstrated strong performance with increased EBITDA and volumes. Copec’s gas station volumes reached 1,695 thousand cubic meters in Q1 2025, up from 1,638 thousand cubic meters in Q1 2024, while industrial channel volumes increased to 1,202 thousand cubic meters from 1,095 thousand cubic meters in the same period.
Copec’s performance highlights are shown in the following slide:
Abastible also showed strong results across all its markets, with volume increases in Colombia, Ecuador, Peru, and Chile. The company’s consolidated EBITDA reached 63,713 million Chilean pesos, representing significant growth both year-over-year and quarter-over-quarter.
Abastible’s performance is detailed in the following slide:
Strategic Initiatives
Empresas Copec announced its 2025 Investment Plan, allocating $3.014 billion in capital expenditures. The plan heavily favors the forestry sector, which will receive 79.2% of the total investment, while the energy sector will receive 19.1% and other investments 1.7%.
The investment plan is outlined in the following slide:
A key strategic initiative is the Arauco Sucuriú Project, which had its groundbreaking ceremony on April 9th. The project has achieved 5.2% physical progress with $341 million disbursed to date. Construction is underway with piling works already started and more than 3,000 workers on-site.
Details of the Sucuriú Project are presented in the following slide:
ESG Achievements
Empresas Copec highlighted several ESG milestones during the quarter. The company leads the Merco ESG ranking for the third consecutive year, underscoring its commitment to environmental, social, and governance excellence.
Arauco issued a $500 million Sustainable Bond, which generated strong investor interest with demand exceeding 4.5 times the amount offered. The funds will be used for general corporate purposes.
The sustainable bond issuance is detailed in the following slide:
Additionally, Duragas, part of the Abastible group, became the first carbon neutral company in Ecuador’s LG sector, receiving recognition for its sustainability management and environmental care.
Forward-Looking Statements
Looking ahead, Empresas Copec expects demand for pulp in China and Europe to remain positive, though market conditions vary by region. For wood products, the outlook differs by geography, with North America (53% of business) showing stability, while South & Central America (36%) and other regions (12%) face varying challenges and opportunities.
The company continues to advance its strategic projects, particularly the Sucuriú Project, which represents a significant portion of its investment plan. With a diversified business portfolio spanning forestry, energy, and mining, Empresas Copec appears positioned to navigate the mixed market conditions, leveraging the strength of its Energy division to offset challenges in Forestry.
The company’s commitment to ESG initiatives, as evidenced by its leadership in sustainability rankings and recent sustainable bond issuance, aligns with global trends toward greater environmental and social responsibility in business operations.
Full presentation:
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