Bio Pappel reports increased profits in Q2 2018

Mexico City-based Bio Pappel S.A.B. de C.V. has reported an EBITDA (earnings before interest, tax, depreciation and amortization) figure of 1.24 billion pesos ($66.4 million) during its 2018 second quarter. The firm says the figure “represents a margin of 17.7 percent on sales and [earnings] growth of 31 percent.”

Bio Pappel’s sales in the second quarter increased 15 percent compared with the second quarter of 2017.  The company cites a 7 percent increase in the volume shipped compared to the second quarter of 2017 combined with a 7 percent increase in the average unit price of the paper, corrugated packaging and notebooks it produces.

The greater volume also helped lead to an 11 percent increase in the company’s cost of sales. Bio Pappel also points to acquiring “a mixture of fibers of higher cost to manufacture higher value-added products such as notebooks.”

Miguel Rincón Arredondo, Bio Pappel executive president and CEO, comments, “The operational strategies and capex investments made are translating into operational efficiencies.” He also points to “a better mix of higher value products, [helping] the company increase its EBITDA by 20 percent in the first half of 2018 compared to that obtained in 2017, reaching a margin over sales of 17 percent.”

During the first half of 2018, Bio Pappel says it invested 594 million pesos ($31.9 million) in capital expenditures intended to increase its capacity to produce corrugated cardboard boxes. About 43 percent of those expenditures were made with what the firm calls long-term financing provided by machinery suppliers.