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The Navigator Company
Quarterly Report • Dec 6, 2024
1900_10-q_2024-12-06_97b015f5-401d-4616-9890-5462f51b1979.pdf
Quarterly Report
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REPORT — FIRST NINE MONTHS 1 | 64
| PERFORMANCE IN FIRST 9 MONTHS OF 2024 3 |
|---|
| Analysis 3rd Quarter (vs. Q2 2024 and vs. Q3 2023)3 |
| First 9 Months of 2024 vs. 9 Months 20234 |
| LEADING INDICATORS 4 |
| ANALYSIS OF RESULTS 5 |
| The printing and writing papers industry5 |
| Pulp Market6 |
| Growth and strong performance in Tissue business 7 |
| Packaging - From Fossil to Forest – investment in sustainability, innovation and transformation 8 |
| Start-up of integrated Moulded Pulp production 10 |
| Power Output of 1,085 GWh, of which 77% was from renewable energy sources 10 |
| EBITDA of € 431 million11 |
| Financial Results11 |
| Free cash flow generation 11 |
| New finance facilities reaffirm Sustainable Financial Management 11 |
| Capex of € 151 million12 |
| A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE 13 |
| A responsible business for the Climate and Nature and for Society 13 |
| MARKET OUTLOOK15 |
| FINANCIAL STATEMENTS17 |
After a first half marked by the rapid rise in the European benchmark index for pulp prices, the 3rd quarter saw a sharp correction in prices in China and a consequent adjustment in Europe, albeit more moderate. This volatility in the pulp price contrasted with the resilience in benchmark prices for printing and writing paper.
In Europe, the usual seasonal factors brought a slowdown in the pace of new orders in the 3rd quarter, as anticipated as early as May. However, although the seasonal effect was more severe than in previous years, the quarter turned out to be better than initially expected, benefiting also from the increased importance of new business segments, in particular tissue, where growth and performance have been strong.
Navigator's competitive position, anchored in efficient management of its business mix, the commercial strategy and cost control, has proved remarkably flexible in adapting to changing market dynamics, as demonstrated again this quarter.
Navigator's trademark commitment to innovation and sustainability has continued to underpin its strong performance. As part of the strategy of business diversification, this quarter saw the start-up of integrated production of moulded pulp, at the product trial and equipment acceptance stage, with the first products being offered on the market in October, designed to replace single-use plastic packaging in the food service and food packaging market. Alongside this, we successfully pressed ahead with integration of the new Tissue operation in the United Kingdom, Navigator Tissue UK.
Analysis 3rd Quarter (vs. Q2 2024 and vs. Q3 2023)
- Navigator recorded turnover of € 503 million (down 5% on Q2 2024; up 5% on Q3 2023);
- EBITDA stood at € 133 million (down 20% on Q2; up 7% on Q3 2023), reflected in an EBITDA margin of 26.3% (down 4.9 pp on Q2; up 0.7 pp on Q3 2023);
- Net income totalled € 83 million (down 13% on Q2 2024; up 30% on Q3 2023);
- Sales of printing and packaging paper totalled approximately 275 thousand tons (down 14% on Q2 2024; down 1% on Q3 2023); in a quarter marked by seasonal factors in Europe, earlier and more severe than usual, offset by growth in Overseas business; sales in value were down by 13% in relation to the 2nd quarter and up by 1% YoY;
- Pulp sales totalled 96 thousand tons (up 35% on Q2 2024; down 38% on Q3 2023), in a quarter marked by slowing demand in the European market and a reduction in pulp integrated into paper; the value of sales rose by 15% over the 2nd quarter and fell by 18% YoY;
- Tissue sales totalled 62 thousand tons (up 12% on Q2 2024; up 52% on Q3 2023), driven by dynamic demand and the new capacity at Accrol, now called Navigator Tissue UK; the value of sales grew by 15% over the second quarter and by 59% over the same period in 2023;
- The packaging sector continued to present growth in orders due essentially to consistent improvements in demand and development of new product ranges in flexible packaging, enabling Navigator to press ahead with plans to diversify its business and achieve growth in its client base and markets.
- Start-up of moulded pulp packaging production in the 3rd quarter the world's largest fully integrated eucalyptus fibre moulded pulp packaging production unit.
- Forestry Producers Club new strategic partnerships established, in order to promote and strengthen an economic environment more favourable to Portuguese businesses in the agro-forestry sector.
First 9 Months of 2024 vs. 9 Months 2023
- Turnover stood at € 1,569 million (up 7% on 9M 2023);
- EBITDA stood at € 431 million (up 15% on 9M 2023), EBITDA margin of 27.5% (up 1.7 pp on 9M 2023);
- Net income totalled € 241 million (up 20% on 9M 2023);
- • Net debt of € 643 million, impacted by acquisition of Accrol (due to payment of € 153 million for the shares and consolidation of additional debt), capex of € 151 million and distribution of € 150 million in dividends; Net Debt / EBITDA ratio of 1.16x.
| 9M | 9M | Change (8) | |
|---|---|---|---|
| Million euros | 2024 | 2023 | 9M 24/ 9M 23 |
| Total Sales | 1568,5 | 1460,6 | 7,4% |
| EBITDA (1) | 431,3 | 376,5 | 14,5% |
| Operating Profits (EBIT) | 316,6 | 277,6 | 14,1% |
| Financial Results | -9,7 | -15,7 | 38,1% |
| Net Earnings | 241,4 | 200,8 | 20,3% |
| Cash Flow | 356,1 | 299,7 | 56,4 |
| Free Cash Flow (2) | -3,3 | 32,5 | - 35,8 |
| Capex | 150,9 | 142,1 | 8,8 |
| Net Debt (3) | 643,2 | 549,7 | 93,5 |
| EBITDA/Sales | 27,5% | 25,8% | 1.7 pp |
| ROS | 20,2% | 19,0% | 1,2 pp |
| ROCE (4) | 21,9% | 21,5% | 0.4 pp |
| ROE (5) | 21,4% | 21,4% | 0,0 pp |
| Equity Ratio | 45,1% | 46,1% | -1,0 pp |
| Net Debt/EBITDA (6)(7) | 1,16 | 0,98 | 0.18 |
LEADING INDICATORS
| ОЗ | Q2 | Change (8) | Q3 | Change (8) | |
|---|---|---|---|---|---|
| Million euros | 2024 | 2024 | Q3 24/Q2 24 | 2023 | Q3 24/ Q3 23 |
| Total sales | 503,0 | 529,1 | -4,9% | 481,1 | 4,6% |
| EBITDA (1) | 132,5 | 165,2 | -19,8% | 123,5 | 7,3% |
| Operating profits | 91,0 | 127,6 | -28,7% | 90,0 | 1,2% |
| Financial results | 0,7 | - 1,6 | -145,3% | - 7,2 | -110,3% |
| Net earnings | 82,6 | 94,8 | -12,9% | 63,3 | 30,4% |
| Cash flow | 124,1 | 132,4 | - 8,3 | 96,9 | 27,2 |
| Free Cash Flow (2) | 21,3 | - 70,8 | 92,1 | 22,8 | - 1,5 |
| Capex | 57,8 | 52,3 | 5,6 | 29,5 | 28,3 |
| Net Debt (3) | 643,2 | 664,5 | 21,3 | 549,7 | 93,5 |
| EBITDA/Sales (%) | 26,3% | 31,2% | -4,9 pp | 25,7% | 0,7 pp |
| ROS | 18,1% | 24,1% | -6,0 pp | 18,7% | -0,6 pp |
| ROCE (4) | 18,9% | 26,8% | -8.1 pp |
20,9% | -2,1 pp |
| ROE (5) | 24,3% | 28,6% | -4,3 pp | 20,2% | 4,0 pp |
| Equity ratio | 45,1% | 42,9% | 2,3 pp | 46,1% | -1,0 pp |
| Net Debt/EBITDA (6)(7) | 1,16 | 1,21 | -0.05 | 0,98 | 0,18 |
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Operating profits + depreciation + provisions;
-
Variation in net debt + dividends + purchase of own shares l Q2 2024 includes impact of acquisition of Accrol
(payment of € 153 million for the shares and consolidation of additional debt)
-
Interest-bearing liabilities - liquid assets (not including effect of IFRS 16)
-
ROCE = Annualised operating income / Average Capital invested (N+(N-1))/2
-
ROE = Annualised net income / Average Shareholders' Funds last -1 months
-
(Interest-bearing liabilities - liquid assets) / EBITDA corresponding to last 12 months
-
Impact of IFRS 16: Net Debt / EBITDA of 1.36; Net Debt / EBITDA (September 2023) of 1.10;
-
Variation in figures not rounded up/down
ANALYSIS OF RESULTS
The focus on efficiency and cost management made it possible to achieve a further significant reduction in cash costs of between 4% and 12%, in relation to the same period in the previous year, in all pulp and paper segments (printing and writing, tissue and packaging); ongoing efforts to control costs have resulted in reductions in cash costs of between 20 and 30%, in relation to the peak level recorded in late 2022, although these costs are still higher than before the pandemic. The resilience of printing, packaging and tissue paper prices and the growing proportion of total business represented by new business segments - tissue and packaging - have enabled Navigator to secure strong results.
The printing and writing papers industry
Globally, apparent demand for Printing and Writing Paper grew by 2.6% (January to August) across all segments, with demand for UWF up 2.4%, and CWF papers growing by 2.4%, whilst papers with mechanical fibre (coated and uncoated) experienced growth in demand of 3.8%.
Global Demand for Printing and Writing Papers
Source: PPPC, August (2024 vs. 2023)
In Europe, apparent demand for UWF paper recorded strong growth of 11% over the first nine months, with the folio segment as the top performer, at 15%, followed by office paper (up 11%) and reels for the paper converting industry (up 9%).
Demand in the United States edged down by 1% (January to August), whilst China recorded growth of 5% (January to August), in relation to the previous year.
Capacity utilisation rates in the industry (output/capacity) adjusted downwards in the 3rd quarter in response to the usual seasonal factors, which led to a slower pace in new orders. Navigator also eased off the pace of production leading to an average capacity utilization rate in the first 9 months of 87%, as a compared to European industry-wide average of 82% for the same period.
The benchmark index for office paper prices in Europe - PIX A4 B-copy – stood at 1,109 €/ton at the end of September and has held very steady since the start of the year, with prices rising by approximately 2% since year-end 2023. Navigator's average price for printing and writing products has increased by 5% since the end of 2023.
Navigator's printing and packaging paper sales totalled 948 thousand tons in the first nine months, up by 17% on the same period in the previous year, with sales growing 7% in value. This has highlighted the strength of our business model, based on differentiation, premium products and strong brands in the various markets where we operate.
Mill brands represented approximately 78% of sales in the first nine months (vs. an average of 67% over the period 2012-2023), again pointing to the resilience of the company's branding strategy. The proportion of premium products remained high in relation to 2023, at 60% (compared to an average of 53% in the period 2012-2023). When market conditions are more difficult, mill brands and segments with greater value added offer an additional safeguard for Navigator's results.
Pulp Market
The European benchmark index for hardwood pulp – PIX BHKP in dollars – rose to an all-time high in July (1,440 USD/t), adjusting down to 1,261 USD/t at the end of September, and currently standing at 1,162 USD/t. The 3rd quarter brought a sharp correction in prices in China, with knock-on effects in Europe, albeit at a slower pace. The average pulp price in the 3rd quarter was 1,361 USD/t, still slightly up on the 2nd quarter.
In Europe, the markets for end consumers of pulp continued to perform well, especially in the printing and writing paper industry (UWF up 11% YoY January to September; Tissue up 7% YoY January to July), despite the usual seasonal slowdown observed in Europe. On the supply side, new ventures in 2023 in Chile and Uruguay and the start-up of new production capacity in 2024 in Latin America and China both led to a gradual increase in supply, especially over this period, putting downwards pressure on prices.
In this context, global demand in the first eight months fell by 1.0% for bleached chemical pulp (BCP), whilst demand for hardwood pulp (HW) grew by 0.5%, with eucalyptus pulp (EUCA) growing by 3.7% (all figures YoY). The main highlights were growth in Europe (BCP up 13.6%, HW up 18.5%, EUCA up 19.4%), and falling demand in China (BCP down 12.1%, HW down 9.5%, EUCA down 7.2%). It should be stressed that, worldwide, eucalyptus pulp represent almost half of all pulp in the market and more than 75% of hardwood pulp.
Global Demand for Pulp
Demand for EUCA has represented a growing proportion of BCP and HW
Source: PPPC, August (2024 vs. 2023)
In August, stocks at European ports stood at 1.5 million tons, in line with the historic average for the past 5 years. In China, pulp stocks stood at 1.7 million tons in September, just below the historical average for the past 5 years (1.8Mt).
As a result, pulp sales stood at 277 thousand tons, due to increased integration in paper products, down by 25% YoY, with the value of sales falling by only 13% in relation to the same period in 2023, thanks to the upward course of pulp prices.
Growth and strong performance in Tissue business
The demand for tissue paper has remained lively, with growth of 5.8% since the start of the year in Western Europe. This strong rate of growth is due essentially to recovery in consumption in the Away-from-Home segment and growing household spending power.
Healthy demand for tissue has been accompanied by growing pressure on margins, due to rising production costs, with the result that prices increases were implemented across the market.
Navigator's tissue sales totalled 155 thousand tons in the first nine months, up by 53% on the same period in 2023, with the value of sales growing by around 48%. These figures have benefited from the additional capacity provided by Navigator Tissue Ejea as from the 2nd quarter of 2023, and by Navigator Tissue UK as from 1 May 2024.
International sales in tissue business therefore accounted for 78% of turnover in this segment in the first nine months of 2024. The most important markets were the Spanish market, with 32% of total sales,
followed by the UK, with 28%, and France, which accounted for 16% of sales. Sales broke down into 97% finished products and 3% reels, representing an improvement in the mix of 3pp when compared with the same period in 2023.
In terms of client segments, At Home or Consumer (retail) business has grown in importance, currently accounting for 81% of sales, whilst Away-from-home and wholesalers account for the remaining 19%. The client portfolio remains diversified and balanced, with the largest client accounting for around 10% of total sales.
Tissue Sales1 2 in the First 9 Months of 2024 (vs. First 9 Months of 2023)
1tons 2 Q2 and Q3 2023 and first nine months of 2024 include Tissue Ejea l May to September 2024 includes Tissue UK 3Finished products and reels
Commercial performance by mill brands was again eye-catching, with Amoos ranked as the fastest growing brand in terms of penetration in Spanish households in 2023, in the household consumables sector, by Kantar Brand Footprint, which surveys the brands most popular with consumers. With penetration up by 57% in comparison with 2022, the Amoos brand has increasingly found its ways into Spanish homes. This award has consolidated the strategy of this mill brand, which has been to invest in innovation and visibility, building up its position in the Iberian market and continuing to grow alongside its consumers. The company's mill brands grew by 38% in relation to 2023, including figures from Navigator Tissue UK.
Packaging - From Fossil to Forest – investment in sustainability, innovation and transformation
Demand levels in 2024 had pointed to recovery and a return to normal for the packaging market. After a promising 1st half, the 3rd quarter confirmed the tendency for recovery and stability, with robust and consistent demand. European deliveries of Kraft MF papers (white and brown) reported by CEPI (YTD July) were up by 22% on the same period in 2023 in the European market.
The packaging segment has performed consistently over the first nine months of the year, with a gradual increase in sales. Navigator's sales volume in this segment was up by 108% over the same period in the previous year. At present, 70% of our sales are in Europe, mainly in Iberia, Italy and France, with the remaining 30% in overseas markets (where Turkey and North Africa are our leading markets).
This performance has been supported by the move into several new segments, above all in the area of Flexible Packaging. These segments were launched during 2023 and in the early months of this year, as previously reported, and are now generating more significant sales volumes.
Indeed, looking at the breakdown of sales by segments, since 2023, we have successfully reduced the segment's dependence on bags, strategically increasing sales in the Flexible Packaging and Box (rigid packaging) segments. This change has enabled us to diversify our portfolio and position ourselves more strongly on the market. The FLEX segment has expanded significantly, and currently tops sales at 47%, whilst the bag segment (gKRAFT BAG) has declined as a proportion of total sales by more than 20% since the start of 2023, to 46% at present, despite recording strong growth in the sales volume (up by 50% vs 9M 2023).
The fastest growth was in the Box segment, although this remains a minor part of the total sales mix. This segment focuses on niche sectors, producing added value products, such as pizza boxes for Italy, where public health rules prohibit the use of recycled paper in contact with food, as well as perfume and cosmetics boxes for France and Iberia.
Sales Breakdown by Segments (YTD September)
Navigator has therefore continued to broaden its customer base, which already numbers close to 300 clients in a sales operation 100% based on its own brand - gKraft™.
Our packaging paper offering is based on three gKraft™ macro segments: BAG, FLEX and BOX, which subdivide into 12 segments for different applications, catering for the bag, flexible packaging and box markets. The innovative introduction of the properties of eucalyptus fibre has been crucial in securing the growing acceptance and recognition that these products already enjoy in the market.
Start-up of integrated Moulded Pulp production
The 3rd quarter saw the start-up of production at the new industrial unit in Aveiro for moulded pulp products.
This new avenue for growth falls within our responsible business strategy, whereby we are seeking to contribute to a more decarbonised society, harnessing the crucial role of well-managed planted forests in the transition from a linear fossil model, with no future, to a circular bioeconomy model, which is carbon neutral and nature-friendly.
Production started up with three product lines for single-use applications in the food sector, 100% recyclable and/or compostable. The launch will be based around 7 products for the food sector: a 22cm plate, a 17cm plate (dessert), a 500ml bowl, 1 litre take-away packaging, a laminated tray for raw protein (beef, pork and chicken), a fruit basket and an espresso coffee cup.
These 7 products offer production flexibility and scalability for exploiting the various opportunities opening up for substituting single use plastics and aluminium. Alongside this, work has proceeded on developing new products, in partnership with national and international clients, and on researching and developing new sustainable barrier property solutions, as well as trials of commercial products.
The first moulded pulp items by The Navigator Company have reached the market this month (October).
Power Output of 1,085 GWh, of which 77% was from renewable energy sources
In the first nine months of 2021, electricity sales totalled € 96 million, representing a reduction of approximately 26% in relation to the same period in the previous year.
This reduction is explained essentially by the fact that the combined-cycle natural gas power station in Setúbal is operating with only one generator set for in-house consumption, with the sale of surplus power to the national grid, when last year all its power output was sold.
These lower sales figures for energy business, operating on a self-consumption basis, are matched on the other hand by lower acquisition costs for electrical power for the purchase volume indexed to OMIE. We should also stress the lower cost of electricity for the purchasing volume indexed to the market, as a result of the lower OMIE price from January to September (52.7€/MWh in 2024 vs. 93.1€/MWh in 2023).
The Group's industrial units continue to participate in the Regulation Reserve Band Market, a system service provided to the operator of the power grid by qualified major power consumers, designed to contribute to the fundamental aim of safeguarding the security of supply in the National Electrical System, which has already proved to be decisive for protecting domestic consumers and critical users.
EBITDA of € 431 million
The focus on efficiency and cost management, combined with the resilience of benchmark prices for printing, packaging and tissue paper and higher pulp prices, enabled us to achieve strong results.
In comparison with the previous quarter, there was again a significant reduction in cash costs this quarter, of between 2% and 10% in all pulp and paper segments (printing and writing, tissue and packaging), with the first nine months presenting an accumulated YoY reduction of between 4% and 12% in all pulp and paper segments.
Total fixed costs ended the period at a higher level than in the same period in 2023, due to the inclusion of the Navigator Tissue Ejea unit and Navigator Tissue UK, employee profit sharing, increased compensation payments under the rejuvenation scheme and non-recurrent costs related to the acquisition of Accrol.
In this context, Navigator achieved EBITDA of € 431 million in the first nine months (vs. € 377 million in the same period in 2023), with an EBITDA margin of 27.5% (up 1.7 p.p. year-on-year).
Financial Results
Financial results showed a loss of € 9.7 million (as compared to € -15.7 million in the same period in 2023), reflecting an improvement of € 6.0 million YoY, mainly as a result of improved foreign exchange results.
Financing costs rose slightly, but the average financing rate remained at a competitive level (average rate in September of 2.3%), benefiting from the policy of hedging interest rate risk.
Earnings from financial investments remained at a similar level to the same period in 2023, thanks to optimised management of cash surpluses.
Pre-tax profits totalled € 307 million (vs. € 262 million in the same period in 2023) and the corporation tax burden for the period was € 66 million (vs. 61 million in 9M 2023), with a tax rate for the period of 21% (vs. 23%). Net income stood at € 241 million (vs. € 201 million in the same period in 2022).
Free cash flow generation
Free cash flow generation has remained at a high level, although it was affected by acquisition of Accrol, now called Navigator Tissue UK, standing at € -3 million in the first nine months of the year (€ 150 million, excluding the effect of the acquisition), in a context of a substantial volume of capital expenditure over the period (€ 151 million).
New finance facilities reaffirm Sustainable Financial Management
Net debt grew by € 153 million in relation to year-end 2023, representing only one third of the main flows in the last 9 months: the payment of € 153 million (acquisition of Accrol), distribution of € 150 million in dividends and the level of capex (€ 151 million). Even so, the Interest-Bearing Net Debt/EBITDA ratio stood at 1.16, further consolidating the financial strength displayed by the Group.
Over the first nine months of the year, Navigator repaid debt of € 102 million, whilst also contracting a significant volume of new long-term finance. Navigator contracted: i) a long-term loan (7 years), of € 55 million, of which € 30 million has been issued and the remaining € 25 million is available for issue up to March 2025; ii) three new long-term finance facilities – maturing in 5, 6 and 7 years with a value of € 300 million, two of which are bond issues with a value of € 50 million each, maturing in 5 and 7 years (bullet),
respectively, and were issued at a floating rate, although derivatives have been contracted to hedge the interest rate risk. The remaining finance facilities, with a value of € 200 million, will be issued in the 4th quarter.
Navigator also has long term finance available from the European Investment Bank (EIB) with a value of 115 million euros, which can be drawn in 3 tranches over a period of 18 months after signing (in December 2023), with maturities of up to 12 years. Lastly, there are commercial paper programmes (more than one year), contracted but unused, with a value of € 128 million.
As a result, Navigator continues to enjoy ample liquidity, with € 468 million in long term facilities available, an appropriate level of average debt maturity, with rationally staggered repayments, and approximately 60% of total debt tied to sustainability (vs. 40% 9M 2023) and 93% of total debt issued on a fixed rate basis, directly or via hedging instruments, enabling us to maintain low financing costs in a scenario of sharply rising interest rates.
It should be noted that, despite the new facilities contracted, incorporating higher market interest rates, our average cost of financing at the end of September remained low, at approximately 2.3%.
Navigator is committed to carrying on its business in full compliance with principles and best practices related to the Environment, Society and Governance issues (ESG) and has established this Sustainability-Linked Finance Framework to support the financing and/or refinancing of its activities in general, through bond issues or loans indexed to sustainability indicators. These sustainability-linked financial instruments are effective tools for securing the funding for its operations, and at the same time bolster its commitment to sustainable practices.
Capex of € 151 million
In the first nine months of 2024, capital expenditure totalled € 151 million (compared to € 142 million 9M 2023), of which approximately € 81 million was classified as environmental or sustainability investment (ESG), accounting for 53% of total.
Capital expenditure consisted mostly of projects aimed at environmental and decarbonisation projects, maintaining production capacity, modernising plant and achieving efficiency gains, as well as structural and
safety projects. The most significant capex projects include the new high efficiency Recovery Boiler in Setúbal, Moulded Pulp in Aveiro, the new biomass-fuelled lime kiln in Figueira, conversion of the Setúbal lime kiln to burning biomass and the new solar facilities in Figueira da Foz and Vila Velha de Ródão.
Navigator has moved ahead with projects under the Recovery and Resilience Plan (RRP), and these projects are proceeding to plan. For eligible investments under the RRP, an incentive rate of around 40% is anticipated, corresponding to close to € 100 million, and the company received approximately € 21 million in 2023 and € 18 million in the first 9 Months of 2024.
A BIOINDUSTRY ON THE RIGHT SIDE OF THE FUTURE
A responsible business for the Climate and Nature and for Society
The 3rd quarter brought Earth Overshoot Day, on 1st of August, the date on which the planet goes into an ecological deficit, i.e. when mankind is consuming more natural resources and environmental services than the planet's ecosystems are able to regenerate, and which should only start to be used the following year. The fact that this date falls ever earlier in the year is a clear sign of the urgent need to speed up joint efforts to achieve efficiency and reduce our use of natural resources, and to strive for carbon neutrality and a lowcarbon circular bioeconomy.
Navigator remains committed to responsible management of the natural resources which underpin its business. The company managers approximately 109 thousand hectares across Portugal, enabling it to respond to the growing demand for wood and new bioproducts, which result in goods and services valued by the market, but also in the positive externalities made possible by sustainable management, such as carbon sequestration and production of oxygen, regulation of the hydrological cycle and promotion of biodiversity.
Aware of the need to manage natural resources responsibly, Navigator has made remarkable strides in its contribution to management of Portugal's forests, in particularly by setting up the Forestry Producers Club.
The Navigator Forestry Producers Club is a pioneering and unique scheme for strengthening relations with its partners and making an important contribution to a significant increase in Portugal's forestry yields and wood output, by disseminating sustainable and active management practices in the country's woodlands. With the slogan "Working Together for the Forest", the Navigator Forestry Producers Club sets out to support our forestry sector partners, on a collaborative basis, in implementing active and responsible forestry management. An online platform is used for providing solutions for: bringing actors in the sector up to speed, access to a purchasing hub and a varied range of benefits. The Club also offers direct access to programmes that support production, provision of forest management tools, as well as training and co-investment opportunities. By increasing the area of land in Portugal on which best forestry practices are applied and all certification requirements are complied with, the project will bring benefits that extend well beyond a stronger eucalyptus sector. It will also contribute to lower fire risks, less CO2 emissions, increased biodiversity, with more conservation areas, and to a more dynamic economy in inland regions of Portugal.
As part of these cooperative efforts, Navigator has this quarter established partnerships with Crédito Agrícola, Galp and Interprev, in order to promote and strengthen an economic environment more favourable to Portuguese businesses in the agro-forestry sector. With these agreements, members of Navigator's Forestry Producers Club will have access to: (i) preferential financing terms; (ii) exclusive discounts for refuelling at Galp filling stations and (iii) a package of occupational health and safety solutions, available exclusively to members, helping to reduce their operating and financial costs. This collaborative
venture seeks not only to modernise actors in the sectors, but above all to promote economic development, financial resilience and growth in the business of forestry operators, helping to boost the vitality of rural communities in Portugal and to combat desertification.
Having started up in November 2023, the Forestry Producers Club already has 326 members, representing combined turnover of approximately € 437 million and a workforce of 2,233.
We accordingly pay keen attention to global developments, seeking to consolidate our strategy and our ability to steer our operations, successfully and sustainably, through an uncertain future, building partnerships with various stakeholder groups and seeking to cooperate with organisations that share our values, creating a positive impact on Society, the Climate and Nature.
Support for Forestry Producers affected by fires
Regrettably, the 3rd quarter was also marked by forest fires.
Navigator feels deeply for the families and populations affected by the major fires which ravaged parts of Portugal. It also wishes to acknowledge the work of all those who helped to combat the fires - the civil protection authorities, the security forces, firemen, civil society, Afocelca's team and all our employees who have been on the ground all summer supporting prevention, coordination and combat.
We should remember that the majority of fires of known origin are preventable, as they are the result of carelessness, negligence or intent, accounting for around 80% of cases, half of which are intentional fires. Fires cause significant damage to the country and increase costs for industry, which is forced to resort to importing wood.
Professional management of forest areas has proved to be the most effective solution for preventing fires, as demonstrated by the fact that the areas managed by the industry accounted for only around 2 per cent of the total area affected, a proportion 5 to 10 times lower than unmanaged stands of eucalyptus, pine or even other hardwoods.
Aware of the impact of the fires on forestry production in the region, Navigator has designed a series of measures to mitigate the consequences for producers in the regions affected.
- Implementing means of support so that it is possible to select and segregate wood without any traces of charcoal, thus valorising it;
- The company will continue, as it always has, to pay for wood from the regions devastated by the tragic fires at market price, while also assuming a price premium to support debarking that eliminates any possible traces of charcoal, in order to fulfil the demanding quality criteria defined in the reception conditions of our mills and allow it to be used for pulp production - the industrial use that values it most. It will thus combat any possible attempt at speculative profiteering that could seek to capitalise on the situation, further harming the forestry producers affected;
- In furtherance of receiving wood under the above conditions, aid for the purchase of forestry equipment will be reinforced and cash advances will be made available to our suppliers and partners affected by this scourge;
- In addition, for burnt wood or wood with traces of charcoal that cannot be recovered for industrial purposes, its use as a source of crushed biomass for renewable energy production will be accepted, and it will also be paid for at market prices.
Navigator is known for its constant and systematic support for its forestry partners, and we are eager to do even more at this especially challenging time.
External recognition of our commitment to sustainability
Navigator recognised as the forestry sector's most sustainable company worldwide
Our commitment to improving ESG performance, backed up by investment, has also been reflected in positive assessments from independent rating agencies.
Navigator was again classified as a low-risk company for investors and an "ESG Industry Top Rated Company" in Sustainalytics' ESG Risk Rating published in July. The company was awarded a score of 11.6, in its last evaluation reaching 1st place of 85 global companies in the Paper & Forestry industries cluster, and also ranked first in the sub-group of 63 companies in the Paper & Pulp cluster, listed in the top 5% of more than 16,200 companies in all industries worldwide.
MARKET OUTLOOK
The 4th quarter got off to a turbulent start, with rising geopolitical tensions, most notably the escalation of the conflict in the Middle East, and also disappointing macroeconomic data. Another aggravating factor was the announcement of strikes at US ports, which have disrupted supply chains, with knock-on effect on economic flows. At the same time, the polarisation and uncertainty surrounding the US elections have serious implications for global stability and significantly hinder short-term forecasting. Nonetheless, macroeconomic forecasts remain cautiously optimistic.
In our sector, and in particular in pulp business, prices are expected to recover in China, after bottoming out. In combination with the post-summer season of higher demand, this could lead to a degree of recovery in the 4th quarter. Elsewhere, a player in Latin America has announced a 4% cut in output, and 8 production lines in the region will have maintenance shutdowns in the 4th quarter. These events could exert positive pressure on market prices, since, in total, is estimated, that the capacity in the 4th quarter will be brought down by approximately 670 thousand tons. In Latin America, another player has announced plans to switch from production of hardwood pulp to dissolving pulp in the 1st quarter of 2025, which will remove a further 300 thousand tons of paper pulp from the market.
In the paper segment, the pace of order book growth is expected to accelerate in the 4th quarter, and this has been felt since September, seasonally the strongest time of year worldwide. On the supply side, there is the potential for further temporary or permanent reductions in capacity in the paper sector. In Europe, capacity was cut by close to 200 thousand tons in the 1st quarter, followed by the closure of mill in the US in June, eliminating UWF production capacity of approximately 170 thousand tons. A further closure was announced in Germany in the 2nd quarter, due to take place by the end of 2024, which will remove more another 280 thousand tons a year from the market, and in the 3rd quarter an Italian mill also announced its closure, removing around 130 thousand tons of UWF capacity from the market.
These changes, combined with a level of cash costs which, despite coming down, are still higher than before the pandemic, will continue to sustain price levels in Europe and the international markets in which we operate.
In the tissue segment, demand continues to be lively, and estimates suggest it will remain healthy, with growth in Europe of 3.2% in 2024. The Group has moved to create synergies and economies of scale driven by business growth, in particular with the acquisition of Navigator Tissue Ejea in 2023 and that of Navigator Tissue UK in 2024.
Navigator remains focused on operational efficiency, managing its fixed and variable costs across its ventures, and also on building up productivity and energy efficiency, ensuring the sustainability of its operations. At the same time, business diversification and the development of new products remain our main priorities, especially in the Tissue and Packaging segments. The Tissue segment will benefit from synergies from the integration of the new unit in the United Kingdom, which will also bring new product lines, and in the Packaging segment we remain committed to innovation and developing new products, as well as launching sales of moulded pulp products as from the 4th quarter.
Navigator's product range, the quality of our brands and distinctive products, our sustainable business approach, the scale of our operations and our sound finances have all supported a resilient business model, enabling us to present consistent results, in changing market conditions.
Lisbon, 24 October 2024
Conference Call and Webcast for Analysts and Investors
Date: Wednesday, 30 October 2024
Time: 12:00 WET (Western European Time, GMT)
Link to the Conference Call webcast:
https://streamstudio.world-television.com/1076-1695-40687/en
Link for advance registration for telephone access to Conference Call:
https://aiti.capitalaudiohub.com/navigator/reg.html
FINANCIAL STATEMENTS
Condensed interim consolidated income statement
For the periods ended 30 September 2024 and 2023
| 9 months | 9 months | ||
|---|---|---|---|
| Amounts in Euro | Note | 30-09-2024 | 30-09-2023 |
| Revenue | 2.1 | 1,568,542,386 | 1,460,559,742 |
| Other operating income | 2.2 | 60,945,543 | 46,487,975 |
| Changes in the fair value of biological assets | 3.7 | 2,105,380 | (1,629,153) |
| Costs of goods sold and materials consumed | 4.1 | (666,463,752) | (658,202,460) |
| Changes in production | 4.1 | 8,256,760 | 2,038,370 |
| External services and supplies | 2.3 | (347,636,622) | (307,223,688) |
| Payroll costs | 7.1 | (152,971,921) | (128,189,117) |
| Other operating expenses | 2.3 | (41,522,340) | (37,307,648) |
| Net provisions | 9.1 | (104,902) | (1,289,652) |
| Depreciation, amortisation and impairment losses in non-financial assets | 3.6 | (114,516,135) | (97,637,432) |
| Operating profit/(loss) | 316,634,397 | 277,606,937 | |
| Financial income and gains | 5.8 | 16,154,626 | 9,769,797 |
| Financial expenses and losses | 5.8 | (25,862,786) | (25,462,742) |
| Financial profit/(loss) | (9,708,160) | (15,692,945) | |
| Profit before income tax | 306,926,237 | 261,913,992 | |
| Income tax | 6.1 | (65,461,060) | (61,121,814) |
| Net profit for the period | 241,465,177 | 200,792,178 | |
| Attributable to Navigator's equity holders | 241,444,011 | 200,755,870 | |
| Attributable to non-controlling interests | 5.4 | 21,166 | 36,308 |
| Earnings per share | |||
| Basic earnings per share, Eur | 5.2 | 0.339 | 0.282 |
| Diluted earnings per share, Euro | 5.2 | 0.339 | 0.282 |
Condensed interim consolidated statement of comprehensive income
For the periods ended 30 September 2024 and 2023
| 9 months | 9 months | ||
|---|---|---|---|
| Amounts in Euro | Note | 30-09-2024 | 30-09-2023 |
| Net profit for the period | |||
| before non-controlling interests | 241,465,177 | 200,792,178 | |
| Items that may be reclassified to the income statement | |||
| Hedging derivative financial instruments | |||
| Changes in fair value | 8.1 | 6,759,473 | (18,918,283) |
| Tax effect | (1,848,854) | 5,202,528 | |
| Currency translation differences | (1,736,320) | 4,853,186 | |
| Tax on conventional capital remuneration | - | (38,500) | |
| Items that may not be reclassified to the income statement | |||
| Remeasurements of post-employment benefits | |||
| Remeasurement | 1,105,858 | (5,590,825) | |
| Tax effect | (95,126) | (13,337) | |
| Comprehensive income of associates and joint ventures | - | (1,630,774) | |
| Total other comprehensive income net of taxes | 4,185,031 | (16,136,005) | |
| Total comprehensive income | 245,650,208 | 184,656,173 | |
| Attributable to: | |||
| Navigator's equity holders | 245,630,060 | 184,655,780 | |
| Non-controlling interests | 20,148 | 394 | |
| 245,650,208 | 184,656,174 |
Condensed interim consolidated statement of financial position
As at 30 September 2024 and 31 December 2023
| Amounts in Euro | Note | 30-09-2024 | 31-12-2023 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 3.1 | 484,106,675 | 381,496,008 |
| Intangible assets | 3.2 | 61,620,749 | 46,198,240 |
| Property, plant and equipment | 3.3 | 1,342,515,677 | 1,233,223,791 |
| Right-of-use assets | 3.5 | 105,234,827 | 65,044,454 |
| Biological assets | 3.7 | 117,697,359 | 115,591,979 |
| Investment properties | 3.4 | 363,350 | 463,404 |
| Other financial assets | 7.2 | 1,881,090 | - |
| Non-current receivables | 4.2 | 18,857,727 | 44,399,506 |
| Deferred tax assets | 6.2 | 61,189,775 | 23,653,501 |
| 2,193,467,229 | 1,910,070,883 | ||
| Current assets | |||
| Inventories | 4.1 | 320,858,460 | 286,490,362 |
| Current receivables | 4.2 | 520,425,569 | 424,740,973 |
| Income tax | 6.1 | 24,605,327 | 18,385,534 |
| Cash and cash equivalents | 5.7 | 65,359,479 | 169,464,967 |
| 931,248,835 | 899,081,836 | ||
| Total assets | 3,124,716,064 | 2,809,152,719 | |
| EQUITY AND LIABILITIES | |||
| Capital and Reserves | |||
| Share capital | 5.1 | 500,000,000 | 500,000,000 |
| Currency translation reserve | 3,433,054 | 5,309,023 | |
| Fair value reserves | 17,809,385 | 12,898,767 | |
| Legal reserve | 100,000,000 | 100,000,000 | |
| Other reserves | (5,960,836) | 3,481,014 | |
| Retained earnings | 549,700,052 | 418,633,191 | |
| Net profit for the period | 241,444,011 | 274,923,820 | |
| Equity attributable to Navigator's Shareholders | 1,406,425,666 | 1,315,245,815 | |
| Non-controlling interests | 5.4 | 347,165 | 327,018 |
| Total Equity | 1,406,772,831 | 1,315,572,833 | |
| Non-current liabilities | |||
| Interest-bearing liabilities | 5.5 | 566,553,764 | 560,085,341 |
| Lease liabilities | 5.6 | 101,079,686 | 62,848,761 |
| Deferred tax liabilities | 6.2 | 124,575,125 | 95,856,013 |
| Provisions | 9.1 | 28,318,304 | 27,837,286 |
| Non-current payables | 4.3 | 118,445,576 | 114,670,790 |
| 938,972,455 | 861,298,191 | ||
| Current liabilities | |||
| Interest-bearing liabilities | 5.5 | 141,995,750 | 99,259,122 |
| Lease liabilities | 5.6 | 12,114,117 | 7,148,060 |
| Current payables | 4.3 | 556,399,462 | 503,046,782 |
| Income tax | 6.1 | 68,461,449 | 22,827,731 |
| 778,970,778 | 632,281,695 | ||
| Total liabilities | 1,717,943,233 | 1,493,579,886 | |
| Total Equity and Liabilities | 3,124,716,064 | 2,809,152,719 |
Condensed interim consolidated statement of changes in equity
For the periods ended 30 September 2024 and 2023
| Amounts in Euro | Share capital | Currency translation reserve |
Fair value reserves |
Legal reserves Other reserves Retained | earnings | Net profit for the period |
Total | Non controlling interests |
Total | |
|---|---|---|---|---|---|---|---|---|---|---|
| Equity as at 1 January 2024 | 500,000,000 | 5,309,023 | 12,898,767 100,000,000 | 3,481,014 418,633,191 | 274,923,820 1,315,245,815 | 327,018 1,315,572,833 | ||||
| Net profit for the period | - | - | - | - | - | - | 241,444,011 | 241,444,011 | 21,166 | 241,465,177 |
| Other comprehensive income (net of taxes) | - | (1,736,320) | 4,910,618 | - | - | 1,011,751 | - | 4,186,049 | (1,018) | 4,185,031 |
| Total comprehensive income for the period | - | (1,736,320) | 4,910,618 | - | - | 1,011,751 | 241,444,011 | 245,630,060 | 20,148 | 245,650,208 |
| Appropriation of 2023 net profit for the period: | ||||||||||
| - Dividends paid | - | - | - | - | - | (149,995,621) | - | (149,995,621) | - | (149,995,621) |
| - Appropriation of prior period's net profit | - | - | - | - | - | 288,923,820 | (274,923,820) | 14,000,000 | - | 14,000,000 |
| - Bonus to employees | - | - | - | - | - | (14,000,000) | - | (14,000,000) | - | (14,000,000) |
| Transactions with non-controlling interests (Note 5.4) | - | - | - | - | (9,441,850) | 4,987,262 | - | (4,454,588) | - | (4,454,588) |
| Other changes | - | (139,649) | - | - | - | 139,649 | - | - | - | - |
| Total transactions with shareholders | - | (139,649) | - | - | (9,441,850) 130,055,110 | (274,923,820) | (154,450,209) | - | (154,450,209) | |
| Equity as at 30 September 2024 | 500,000,000 | 3,433,054 | 17,809,385 100,000,000 | (5,960,836) 549,700,052 | 241,444,011 1,406,425,666 | 347,165 1,406,772,831 |
| Amounts in Euro | Share capital | Currency translation reserve |
Fair value reserves |
Legal reserves Other reserves Retained | earnings | Net profit for the period |
Total | Non controlling interests |
Total | |
|---|---|---|---|---|---|---|---|---|---|---|
| Equity as at 1 January 2023 | 500,000,000 | 5,343,706 | 33,997,828 100,000,000 | 3,481,014 224,049,919 | 392,537,070 1,259,409,537 | 297,977 1,259,707,514 | ||||
| Net profit for the period | - | - | - | - | - | - | 200,755,870 | 200,755,870 | 36,308 | 200,792,178 |
| Other comprehensive income (net of taxes) | - | 4,853,186 | (13,715,755) | - | - | (7,273,829) | - | (16,136,398) | 394 | (16,136,004) |
| Total comprehensive income for the period | - | 4,853,186 (13,715,755) | - | - | (7,273,829) | 200,755,870 | 184,619,472 | 36,702 | 184,656,174 | |
| Appropriation of 2022 net profit for the period: | ||||||||||
| - Dividends paid | - | - | - | - | - | (199,984,679) | - | (199,984,679) | - | (199,984,679) |
| - Appropriation of prior period's net profit | - | - | - | - | - | 426,537,070 | (392,537,070) | 34,000,000 | - | 34,000,000 |
| - Bonus to employees | - | - | - | - | - | (34,000,000) | - | (34,000,000) | - | (34,000,000) |
| Total transactions with shareholders | - | - | - | - | - 192,552,391 | (392,537,070) | (199,984,679) | - | (199,984,679) | |
| Equity as at 30 September 2023 | 500,000,000 | 10,196,892 | 20,282,073 100,000,000 | 3,481,014 409,328,481 | 200,755,870 1,244,044,330 | 334,679 1,244,379,009 |
Condensed interim consolidated cash flow statement
For the periods ended 30 September 2024 and 2023
| 9 months | 9 months | ||
|---|---|---|---|
| Amounts in Euro | Notes | 30-09-2024 | 30-09-2023 |
| OPERATING ACTIVITIES | |||
| Receipts from customers | 1,539,636,397 | 1,595,035,644 | |
| Payments to suppliers | (995,643,196) | (1,173,940,912) | |
| Payments to employees | (116,612,577) | (113,691,314) | |
| Cash flow from operations | 427,380,624 | 307,403,418 | |
| Income tax received/ (paid) | 6.1 | (35,294,824) | (121,516,355) |
| Other receipts / (payments) relating to operating activities | (90,667,605) | 97,715,333 | |
| Cash flows from operating activities (1) | 301,418,195 | 283,602,396 | |
| INVESTING ACTIVITIES | |||
| Inflows: | |||
| Property, plant and equipment | 46,153 | 262,484 | |
| 46,153 | 262,484 | ||
| Outflows: | |||
| Property, plant and equipment | (137,329,504) | (157,119,606) | |
| Intangible assets | - | (2,805,215) | |
| Investments in subsidiaries | 1.2 | (150,779,060) | (60,951,811) |
| (288,108,564) | (220,876,633) | ||
| Cash flows from investing activities (2) | (288,062,411) | (220,614,149) | |
| FINANCING ACTIVITIES | |||
| Inflows: | |||
| Interest-bearing liabilities | 5.5 | 151,314,010 | - |
| Government grants | 31,501,104 | 6,730,905 | |
| 182,815,114 | 6,730,905 | ||
| Outflows: | |||
| Interest-bearing liabilities | 5.5 | (117,050,173) | (97,858,784) |
| Amortisation of lease agreements | 3.5 | (12,170,998) | (7,958,047) |
| Interest and similar expense | (17,333,698) | (3,693,256) | |
| Distribution of dividends | 5.3 | (149,995,621) | (199,984,679) |
| Repayable grants | (3,609,720) | (3,226,260) | |
| (300,160,210) | (312,721,026) | ||
| Cash flows from financing activities (3) | (117,345,096) | (305,990,120) | |
| CHANGES IN CASH AND CASH EQUIVALENTS (1)+(2)+(3) | (103,989,312) | (243,001,873) | |
| Change in the consolidation perimeter | - | 5,741,210 | |
| Effect of exchange rate differences | (116,176) | 532,462 | |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD Effects on assets held for sale |
5.7 | 169,464,967 | 343,083,788 |
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 5.7 | 65,359,479 | 106,355,587 |
CONTENTS Condensed Interim Consolidated Financial Statements
| 1. | Introduction | 24 |
|---|---|---|
| 1.1. | The Group | 24 |
| 1.2. | Acquisition of Accrol Group's UK consumer tissue business | 25 |
| 1.3. 1.4. |
Subsequent events Basis for preparation |
26 27 |
| 1.5. | Significant accounting estimates and judgements | 27 |
| 2.Operational performance | 29 | |
| 2.1 | Revenue and segment reporting | 29 |
| 2.2 | Other operating income | 32 |
| 2.3 | Other operating expenses | 33 |
| 3.Investments | 34 | |
| 3.1. | Goodwill | 34 |
| 3.2. | Intangible assets | 36 |
| 3.3. | Property, plant and equipment | 37 |
| 3.4. | Investment properties | 38 |
| 3.5. | Right-of-use assets | 39 |
| 3.6. | Depreciation, amortisation and impairment losses | 40 |
| 3.7. | Biological assets | 40 |
| 4.Working capital | 41 | |
| 4.1. | Inventories | 41 |
| 4.2. | Receivables | 42 |
| 4.3. | Payables | 44 |
| 5.Capital Structure | 45 | |
| 5.1. | Share Capital and Treasury Shares | 45 |
| 5.2. | Earnings per Share | 45 |
| 5.3. | Dividends distributed | 46 |
| 5.4. | Non-controlling interests | 46 |
| 5.5. | Interest-bearing liabilities | 47 |
| 5.6. | Lease liabilities | 49 |
| 5.7. | Cash and cash equivalents | 50 |
| 5.8. | Net financial results | 50 |
| 6.Income tax | 51 | |
| 6.1. | Income tax for the period | 51 |
| 6.2. | Deferred taxes | 54 |
| 7.Payroll | 54 | |
| 7.1. | Payroll costs | 54 |
| 7.2. | Employee benefits | 55 |
| 8.Financial instruments | 57 | |
|---|---|---|
| 8.1. | Derivative financial instruments | 57 |
| 9.Provisions, commitments and contingencies | 59 | |
| 9.1. | Provisions | 59 |
| 9.2. | Commitments | 59 |
| 10. | Group structure | 61 |
| 10.1. | Companies included in the consolidation perimeter | 61 |
| 10.2. | Changes in the consolidation perimeter | 62 |
| 10.3. | Transactions with related parties | 62 |
| 11. | Explanation added for translation | 63 |
1. Introduction
1.1. The Group
The Navigator Group (Group) is comprised by The Navigator Company, S.A., whose name remained unchanged during the period, (until 2015 designated as Portucel, S.A.) and its subsidiaries.
The Navigator Group was created in 1953, when a group of technicians from "Companhia Portuguesa de Celulose de Cacia" made this company the first in the world to produce bleached eucalyptus sulphate pulp.
In 1976, Portucel E.P. was created as a result of the nationalisation of the cellulose industry which, through the merger of CPC – Companhia de Celulose, S.A.R.L. (Cacia), Socel – Sociedade Industrial de Celulose, S.A.R.L. (Setúbal), Celtejo – Celulose do Tejo, S.A.R.L. (Vila Velha de Ródão), Celnorte – Celulose do Norte, S.A.R.L. (Viana do Castelo) and Celuloses do Guadiana, S.A.R.L. (Mourão) incorporated Portucel - Empresa de Celulose e Papel de Portugal, E.P., converted into a Public Limited Company of mainly public capital by Decree-Law 405/90, of 21 December.
Years after, as a result of the restructuring of Portucel – Empresa de Celulose e Papel de Portugal, S.A., which was renamed Portucel, SGPS, S.A., towards its privatisation, Portucel S.A. was created, on 31 May 1993, through Decree-law 39/93, of 13 February, with the former assets of the two main companies, based in Aveiro and Setúbal.
In 1995, the Company was privatised, and became a publicly traded company.
Aiming to restructure the paper industry in Portugal, Portucel acquired Papéis Inapa, S.A. (Setúbal), in 2000, and Soporcel – Sociedade Portuguesa de Papel, S.A. (Figueira da Foz), in 2001. Those key strategic decisions resulted in the Portucel Soporcel Group (currently Navigator Group), which is currently the largest European and one of the world's largest producers of bleached eucalyptus pulp and the largest European producer of uncoated wood-free paper (UWF), with a capacity of 1.6 and 1.6 millions of tonnes, respectively, and it sells approximately 462 thousand tonnes of pulp (31 December 2023), annually, integrating the remainder in the production of UWF paper and Tissue paper.
In June 2004, the Portuguese State sold 30% of Portucel's equity, which was acquired by Semapa Group. In September of the same year, Semapa launched a public acquisition offer tending to assure the Group's control, which was accomplished by guaranteeing a 67.1% stake of Portucel's equity.
In November 2006, the Portuguese State concluded the third and final stage of the sale with Parpública, SGPS, S.A. (formerly Portucel, SGPS, S.A.) selling the remaining 25.72% it still held, thus increasing the free-float.
From 2009 to June 2015, more than 75% of the Company's share capital was held directly and indirectly by Semapa – Sociedade de Investimento e Gestão SGPS, S.A. (excluding treasury shares) having the percentage of voting rights been reduced to 70% following the conclusion of the offer for the acquisition, in the form of an exchange offer, of the ordinary shares of Semapa in July 2015. The voting rights currently amount to 70.03%.
In February 2015, the Group started its activity in the Tissue segment with the acquisition of AMS-BR Star Paper, S.A. (currently denominated Navigator Tissue Ródão, S.A.), a Company that holds and explores a tissue paper mill, located in Vila Velha de Ródão. A new industrial facility was built in Aveiro, in August 2018, being operated by Navigator Tissue Aveiro, S.A., which is currently the largest Portuguese producer with a production and transformation capacity of 130 thousand tonnes and 120 thousand tonnes, respectively.
On 31 March 2023 the acquisition of the Gomà-Camps Group's consumer Tissue business in Spain was concluded, with a view to strengthening the Group's presence in this business segment. The integration of this new mill has elevated Navigator to the position of second largest Iberian tissue producer, with a production and converting capacity of 180 thousand tonnes.
In May 2024, The Navigator Company acquired all the shares representing the share capital of Accrol Group Holdings plc ("Accrol"), a leader in the tissue paper converting segment in the United Kingdom, producing private label toilet rolls, kitchen rolls and facial tissues for most of the main UK retailers, bringing total converting capacity to 311,000 tonnes.
The Group's main business is the production and sale of writing and printing thin paper (UWF) and domestic consumption paper (Tissue), and it is present in the entire value-added chain, from research and development of forestry and agricultural production, to the purchase and sale of wood and the production and sale of bleached eucalyptus kraft pulp – BEKP – and electric and thermal energy, as well as its commercialisation.
The Navigator Company, S.A. (hereafter referred to as The Navigator Company or Company) is a publicly traded company, listed in Euronext Lisbon, with its share capital represented by nominal shares.
Company: The Navigator Company, S.A.
Head Office: Mitrena – Apartado 55 | 2901-861 Setúbal | Portugal
Legal Form: Public Limited Company
Share Capital: Euro 500,000,000
TIN: 503 025 798
1.2. Acquisition of Accrol Group's UK consumer tissue business
On 24 May 2024, the Navigator Group concluded a Initial Public Offering, in the form of a "Recommended Firm Cash Offer", for the entire share capital of Accrol Group Holdings Plc, a company based in Blackburn, England, which holds 9 subsidiaries, 3 of which operational.
As part of its diversification and growth strategy, the acquisition of the Accrol Group, a leading player in the UK tissue market (4th in the ranking), provided additional capacity to the tissue business segment, with a production and converting capacity of 131 thousand tonnes based on 5 sites: Blackburn (rolls and facial tissue); Leicester (rolls); Leyland (rolls); Flint (wet wipes) and Bridgewater (wet wipes).
Following the entry into the British market through the acquisition of the main independent Group in the tissue paper processing sector, whose competitive advantages and values are aligned with those of the Navigator Group, sales volume and EBITDA in the third quarter benefited from the integration of Accrol on 1 May 2024.
With this acquisition, the Navigator Group expects a number of synergies in the Tissue segment, as well as an increase in its market share by accessing the Accrol Group's customer portfolio, namely in markets where it intends to strengthen its presence, as well as a reduction in costs through economies of scale.
In the 5 months following the acquisition up to 30 September 2024, the Accrol Group made sales contributions in the amount of Euro 87,272,388. If the acquisition had taken place on 1 January 2024, management estimates that consolidated sales would have amounted to Euro 1,642,224,736. When determining these amounts, the Board assumed that any provisionally determined fair value adjustments arising on the acquisition date would be the same if the acquisition date was 1 January 2024.
Transferred consideration
As part of the acquisition of Accrol Group Holdings Ltd, the consideration transferred amounted to Euro 153,765,150 (GBP 130,823,389) and was paid entirely in cash and cash equivalents, with no contingent consideration associated with this acquisition.
Identification of assets and liabilities acquired and goodwill
As at this date, the Group is carrying out the necessary procedures to recognise and measure the identifiable assets acquired, the liabilities assumed and consequently the calculation of the goodwill, in accordance with IFRS 3. This evaluation will be carried out by external specialised and independent evaluators. In addition, the Group is assessing the tax deductibility of the goodwill arising from this transaction.
Should new information be obtained up to one year after the acquisition regarding facts and circumstances that existed on the acquisition date, this will be considered in the fair value allocation process.
In accordance with IFRS 3, the identification, allocation and accounting of fair value of assets, liabilities and contingent liabilities acquired must take place within twelve months of the acquisition date. The assets acquired and liabilities incurred on the date of acquisition are as follows:
| Amounts in Euro | Accrol Group |
|---|---|
| Non-current assets | |
| Other intangible assets | 22,274,833 |
| Property, plant and equipment | 60,111,246 |
| Right-of-use assets | 41,915,115 |
| Deferred tax assets | 14,212,297 |
| Other non-current assets | 2,758,802 |
| Current assets | |
| Inventories | 24,641,130 |
| Current receivables | 31,379,588 |
| Cash and cash equivalents | 2,986,092 |
| Non-current liabilities | |
| Lease liabilities | (36,390,296) |
| Deferred tax liabilities | (13,715,118) |
| Current liabilities | |
| Interest-bearing liabilities | (18,941,046) |
| Lease liabilities | (9,270,587) |
| Current payables | (68,883,897) |
| Income tax | (69,976) |
| Total identifiable assets and liabilities | 53,008,183 |
| Initial goodwill | 100,756,969 |
| Total acquisition amount | 153,765,152 |
| Cash and cash equivalents | (2,986,092) |
| Net effect on cash and cash equivalents | 150,779,060 |
Acquisition-related costs
The Group incurred costs related to this acquisition amounting to Euro 3,499,552, related to legal fees incurred in the Public Takeover Bid process and other due diligence costs. These costs are recognised as external services and supplies in the Consolidated income statement and Consolidated statement of comprehensive income.
1.3. Subsequent events
There were no events that resulted in additional adjustments or disclosures in the Group's consolidated financial statements in the nine-month period ended 30 September 2024.
1.4. Basis for preparation
1.4.1. Authorisation to issue condensed interim consolidated financial statements
These condensed interim consolidated financial statements were approved by the Board of Directors and authorised for issue on 24 October 2024.
1.4.2. Basis for presentation
The Condensed interim consolidated financial statements for the nine-month period ended 30 September 2024 were prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting.
The following Notes were selected in order to contribute to the understanding of the most significant changes in the Group's consolidated financial position and its performance in relation to the last reporting date. In this context, these condensed interim consolidated financial statements should be read together with the Navigator Group's consolidated financial statements for the period ended 31 December 2023.
The accounting policies adopted are consistent with those of the previous period and the corresponding interim reporting period.
1.4.5. Basis for measurement
The accompanying condensed interim consolidated financial statements have been prepared on the going concern basis from the accounting books and records of the companies included in the consolidation (Note 10.1), and under the historical cost convention, except for biological assets (Note 3.7), and for financial instruments measured at fair value through profit or loss or at fair value through other comprehensive income in which derivative financial instruments are included. The liability related to responsibilities for defined benefits is recognised at its present value deducted from the respective asset.
The condensed interim consolidated financial statements have been prepared in Euro, except if mentioned otherwise.
1.4.6. Comparability
On May 2024, the acquisition of the Accrol Group's consumer Tissue business in the UK was concluded, with a view to strengthening the Group's presence in this business segment. Accordingly, the Financial Statements for the nine-month period ended 30 September 2024 include 5 months of operation of the acquired business (Note 1.2).
Notwithstanding the aforementioned acquisition, these financial statements are comparable in all material respects with those of the comparative periods.
1.5. Significant accounting estimates and judgements
The preparation of consolidated financial statements requires that the Group's Board of Directors make judgements and estimates that affect the amount of revenue, costs, assets, liabilities and disclosures at the date of the consolidated statement of financial position. To that effect, the Group's Board of Directors are based on:
- i) the best information and knowledge of current events and in certain cases on the reports of independent experts, and
- ii) the actions that the Group considers it may have to take in the future.
On the date on which the operations take place, the outcome could differ from those estimates.
More significant estimates and judgements are presented below:
| Estimates and judgements | Notes |
|---|---|
| Business combinations | 1.2 – Acquisition of Acroll Group's UK consumer tissue business |
| Recoverability of Goodwill | 3.1 – Goodwill |
| Recoverability, useful life and depreciation of property, plant and equipment | 3.3 – Property, plant and equipment |
| Fair value of biological assets | 3.7 – Biological assets |
| 6.1 - Income tax for the period | |
| Uncertainty over income tax treatments | 6.2 - Deferred taxes |
| Actuarial assumptions | 7.2 – Employee benefits |
| Recognition of provisions | 9.1 - Provisions |
2. Operational performance
2.1 Revenue and segment reporting
Financial information by operating segment in 2024 and 2023
| 30-09-2024 | |||||||
|---|---|---|---|---|---|---|---|
| Amounts in Euro | MARKET | * | |||||
| PULP | UWF PAPER | TISSUE PAPER | ENERGY | SUPPORT | CANCELLATIONS | TOTAL | |
| Revenue | |||||||
| Sales and services - external | 174,004,595 | 978,999,858 | 319,887,345 | 95,650,588 | - | - | 1,568,542,386 |
| Sales and services – intersegment | 2,075,050 | - | - | 43,011,972 | 426,653,234 | (471,740,256) | - |
| Total revenue | 176,079,645 | 978,999,858 | 319,887,345 | 138,662,560 | 426,653,234 | (471,740,256) | 1,568,542,386 |
| PROFIT/ (LOSS) | |||||||
| Operating income (1) | 30,309,275 | 249,230,565 | 61,474,023 | 19,529,914 | (43,909,380) | - | 316,634,397 |
| Financial profit/(loss) | - | - | - | - | (9,708,160) | - | (9,708,160) |
| Income tax | - | - | - | - | (65,461,060) | - | (65,461,060) |
| Net profit for the period | 241,465,177 | ||||||
| Non-controlling interests | - | - | - | - | (21,166) | - | (21,166) |
| Profit/ (loss) attributable to equity holders | - | - | - | - | - | - | 241,444,011 |
| OTHER INFORMATION | |||||||
| Acquisitions of fixed capital | 24,103,061 | 110,173,253 | 12,909,234 | 1,093,773 | 3,643,136 | - | 151,922,457 |
| Depreciation and impairment | (13,741,981) | (59,651,244) | (20,609,414) | (14,137,984) | (6,375,512) | - | (114,516,135) |
| Provisions ((increases) / reversal) | - | 79,198 | 1,500 | - | (185,600) | - | (104,902) |
| OTHER INFORMATION | |||||||
| SEGMENT ASSETS | |||||||
| Goodwill | - | 376,756,383 | 107,350,292 | - | - | - | 484,106,675 |
| Property, plant and equipment | 148,258,201 | 772,529,152 | 283,962,183 | 133,317,007 | 4,449,134 | - | 1,342,515,677 |
| Right-of-use assets | 13,832,230 | 49,877,763 | 39,735,722 | - | 1,789,112 | - | 105,234,827 |
| Biological assets | 29,424,340 | 88,273,019 | - | - | - | - | 117,697,359 |
| Non-current receivables | 1,835,877 | 11,807,160 | 3,991,833 | - | 1,222,857 | - | 18,857,727 |
| Inventories | 27,809,194 | 222,302,172 | 68,623,507 | 989,992 | 1,133,595 | - | 320,858,460 |
| Trade receivables | 31,347,781 | 165,061,177 | 108,329,764 | 1,546,040 | 6,131,576 | - | 312,416,338 |
| Other current receivables | 18,594,845 | 71,088,514 | 23,944,529 | 1,169,647 | 93,211,696 | - | 208,009,231 |
| Other assets | 8,537,503 | 67,637,347 | 42,511,310 | 6,243 | 96,327,367 | - | 215,019,770 |
| Total Assets | 279,639,971 | 1,825,332,687 | 678,449,140 | 137,028,929 | 204,265,337 | - | 3,124,716,064 |
| SEGMENT LIABILITIES | |||||||
| Interest-bearing liabilities | - | 415,573 | 47,463,458 | - | 660,670,483 | - | 708,549,514 |
| Lease liabilities | 15,174,255 | 54,180,728 | 41,939,577 | - | 1,899,243 | - | 113,193,803 |
| Other payables | 38,879,187 | 234,989,618 | 84,013,169 | 874,831 | 197,642,657 | - | 556,399,462 |
| Other liabilities | 33,606,609 | 145,929,769 | 54,741,665 | 7,387,974 | 98,134,437 | - | 339,800,454 |
| Total Liabilities | 87,660,051 | 435,515,688 | 228,157,869 | 8,262,805 | 958,346,820 | - | 1,717,943,233 |
* Cancellation of intersegment operations. Consolidation adjustments related to inter-segmental transactions are considered not significant.
(1 ) Includes the effects of hedging derivatives of Euro 2,229,273 and Euro 1,886,568 in the Pulp and UWF Paper segments, respectively.
In the nine-month period ended 30 September 2024, The Navigator Group recorded turnover in the amount of Euro 1,568,542,386, with paper sales accounting for approximately 62% of turnover (vs. 63%), pulp sales 11% (vs. 14%), tissue sales 20% (vs. 15%) and energy sales 6% (vs. 9%).
The global apparent demand for Printing and Writing Papers grew by 2.6% (January to August) in all segments, with demand for UWF paper growing by +2.4%, CWF papers growing by 2.4%, while mechanical fibre paper (coated and uncoated) grew by 3.8%.
In Europe, apparent demand for UWF paper recorded strong growth of 11% during the first 9 months of the year, with the paper segment for the printing industry recording the highest growth (15%), followed by office paper (11%) and reels for the paper processing industry (9%).
The United States recorded a slight decrease in demand of 1% (January to August), while China recorded growth of 5% (January to August) compared to the previous year.
In the Pulp segment, the benchmark index for short fibre (hardwood) pulp in Europe - PIX BHKP in US dollars, reached an all-time high at the beginning of July (1,440 USD/t), correcting to 1,261 USD/t at the end of September, currently at 1,162
USD/t. In the third quarter there was a strong price correction in China, and consequently in Europe, albeit more slowly. The average pulp price in the third quarter was 1,361 USD/t, a slight increase compared to the second quarter.
In Europe, the performance of the pulp end-user markets continued to be positive, particularly in the printing and writing paper industry (UWF +11% vs. the same period in January to September; Tissue +7% vs. the same period in January to July), despite the usual seasonal slowdown observed in Europe. On the supply side, the gradual increase in supply, particularly during this period, as a result of the 2023 projects in Chile and Uruguay, as well as the new production capacity that started up in 2024 in Latin America and China, put negative pressure on price levels.
The tissue paper segment continues to perform well, with demand growing by 5.8% since the beginning of the year in Western Europe. This sturdy growth rate is essentially the result of the recovery in consumption in the Away-from-Home segment and the increase in household purchasing power.
During the first nine months, Navigator's Tissue sales volume reached 155 thousand tonnes, an increase of 53% on the same period last year, with a growth in sales value of around 48%. This development benefited from the entry of Navigator Tissue Ejea's capacity in the second quarter of 2023, and Navigator Tissue UK's capacity as at 1 May 2024.
In the Packaging business line, 2024 began with demand levels showing signs of recovery and a return to normal market operations. After a promising first quarter, the third quarter confirmed the recovery and stability trend with robust and consistent demand. European deliveries of Kraft MF paper (white and brown) reported by CEPI (up to July) grew by +22% compared to the same period in 2023.
Sales in Navigator's Packaging segment grew by 108% year-on-year. The Navigator Group has implemented price increases in all its markets justified by rising production costs and improved market performance.
This good performance is guaranteed by the entry into several new segments, primarily in the Flexible Packaging area, in which the Group invested in 2023 and launched commercially in the first few months of the year, and which is now materialising in more significant volumes.
In the first nine months of the year, the sale of electricity amounted to Euro 95,650,588 compared to Euro 130,028,533 in the same period last year, which represents a reduction of approximately 26%. This reduction stems chiefly from the fact that the Setúbal natural gas combined cycle power station is operating with only one group on a self-consumption basis with the sale of surpluses to the national grid, whereas last year it operated on a total sale basis (i.e., without self-consumption). On the other hand, this lower sale of electricity for self-consumption corresponds to a lower cost of purchasing electricity for the volume of purchases indexed to the OMIE. Also noteworthy is the lower cost of purchasing electricity for the volume of purchases indexed to the market, due to the fall in the OMIE price between January and September (Euro 52.7/MWh in 2024 vs. Euro 93.1/MWh in 2023).
The fixed capital expenditure in 30 September 2024 stood at Euro 151,922,457, compared with Euro 141,894,041 in the previous period. This amount includes mainly investments aimed at decarbonisation, maintenance of production capacity, upgrading of equipment and improvement of efficiency, structural and safety projects. Nearly 53% of the total investment is environment-related, with the following projects being of particular note: the new high-efficiency recovery boiler in Setúbal; the moulded cellulose plant in Aveiro; the new biomass lime kiln in Figueira da Foz; the conversion of the lime kiln in Setúbal to burn biomass and the new photovoltaic plants in Figueira da Foz and Vila Velha de Rodão.
The Navigator Group continues to move forward with projects under the Recovery and Resilience Plan (RRP), particularly projects aimed at the Energy/Climate Transition and Digital Transition. For eligible investments under the RRP, an incentive rate of about 40% is expected, which corresponds to close to Euro 100 million, with the company receiving approximately Euro 21 million in 2023 and Euro 18 million in the first nine months of 2024.
30-09-2023
| Amounts in Euro | MARKET | * | ||||||
|---|---|---|---|---|---|---|---|---|
| PULP | UWF PAPER TISSUE PAPER | ENERGY | SUPPORT | CANCELLATIONS | TOTAL | |||
| REVENUE Sales and services - external |
||||||||
| 198,867,800 | 915,557,593 | 216,105,816 | 130,028,533 | - | - | 1,460,559,742 | ||
| Sales and services – intersegment | 1,964,980 | - | - | 22,905,666 | 481,859,549 | (506,730,195) | - | |
| Total revenue | 200,832,780 | 915,557,593 | 216,105,816 | 152,934,199 | 481,859,549 | (506,730,195) | 1,460,559,742 | |
| PROFIT/ (LOSS) | ||||||||
| Operating income (1) | 7,165,739 | 218,844,180 | 45,777,038 | 47,134,040 | (41,314,060) | - | 277,606,937 | |
| Financial profit/(loss) | - | - | - | - | (15,692,945) | - | (15,692,945) | |
| Income tax | - | - | - | - | (61,121,814) | - | (61,121,814) | |
| Net profit for the period | - | - | - | - | 200,792,178 | |||
| Non-controlling interests | - | - | - | - | (36,308) | - | (36,308) | |
| Profit/ (loss) attributable to equity holders | - | - | - | - | - | - | 200,755,870 | |
| OTHER INFORMATION | ||||||||
| Acquisitions of fixed capital | 22,443,979 | 106,814,115 | 6,009,156 | 3,219,527 | 3,407,265 | - | 141,894,041 | |
| Depreciation and impairment | (11,658,733) | (59,689,108) | (8,974,828) | (12,574,321) | (4,740,442) | - | (97,637,432) | |
| Provisions ((increases) / reversal) | - | - | - | - | (1,289,652) | - | (1,289,652) | |
| OTHER INFORMATION | ||||||||
| SEGMENT ASSETS | ||||||||
| Goodwill | - | 376,756,383 | 34,620,225 | - | - | - | 411,376,608 | |
| Property, plant and equipment | 144,286,679 | 717,380,954 | 184,028,028 | 137,231,835 | 4,744,429 | - | 1,187,671,925 | |
| Right-of-use assets | 12,999,583 | 46,929,622 | - | - | 2,022,928 | - | 61,952,133 | |
| Biological assets | 30,217,680 | 90,653,041 | - | - | - | - | 120,870,721 | |
| Non-current receivables | 6,089,342 | 15,262,811 | 2,559,554 | - | 7,999,310 | - | 31,911,017 | |
| Inventories | 28,960,750 | 256,964,316 | 31,186,302 | 460,643 | 1,294,281 | - | 318,866,292 | |
| Trade receivables | 52,585,909 | 180,437,764 | 37,050,018 | - | 10,260,919 | 280,334,610 | ||
| Other current receivables | 16,963,156 | 32,197,453 | 6,305,406 | 2,179,659 | 52,593,987 | - | 110,239,661 | |
| Other assets | 3,640,886 | 55,371,841 | 4,765,607 | - | 128,385,411 | - | 192,163,745 | |
| Total Assets | 295,743,985 | 1,771,954,185 | 300,515,140 | 139,872,137 | 207,301,265 | - | 2,715,386,712 | |
| Interest-bearing liabilities | - | 415,573 | 37,201,475 | - | 618,470,486 | - | 656,087,534 | |
| Lease liabilities | 14,041,539 | 50,084,984 | - | - | 2,148,365 | - | 66,274,888 | |
| Other current payables | 60,175,582 | 309,598,415 | 32,810,428 | 2,455,506 | 117,353,194 | - | 522,393,125 | |
| Other liabilities | 16,019,164 | 97,870,065 | 15,920,106 | 7,783,413 | 88,659,408 | - | 226,252,156 | |
| Total Liabilities | 90,236,285 | 457,969,037 | 85,932,009 | 10,238,919 | 826,631,453 | - | 1,471,007,703 |
Revenue by business segment, by geographic area and by recognition pattern
| 30-09-2024 | ||||||
|---|---|---|---|---|---|---|
| Amounts in Euro | Pulp | UWF Paper | Tissue Paper | Energy | Total Amount |
Total % |
| Portugal | 9,676,351 | 51,945,775 | 67,706,532 | 95,650,588 | 224,979,246 | 14.34% |
| Rest of Europe | 108,962,277 | 567,190,730 | 250,177,084 | - | 926,330,091 | 59.06% |
| North America | 3,956,325 | 66,958,865 | 458,808 | - | 71,373,998 | 4.55% |
| Latin America | 1,588,463 | 63,365,500 | 414,828 | - | 65,368,791 | 4.17% |
| Africa | 23,964,248 | 140,729,115 | 1,130,093 | - | 165,823,456 | 10.57% |
| Asia | 25,856,931 | 88,600,066 | - | - | 114,456,997 | 7.30% |
| Oceania | - | 209,807 | - | - | 209,807 | 0.01% |
| 174,004,595 | 978,999,858 | 319,887,345 | 95,650,588 | 1,568,542,386 | 100.00% | |
| Recognition pattern | ||||||
| At a certain moment in time | 174,004,595 | 978,999,858 | 319,887,345 | 95,650,588 | 1,568,542,386 | 100.00% |
| Over time | - | - | - | - | - | 0.00% |
| 30-09-2023 | ||||||
|---|---|---|---|---|---|---|
| Amounts in Euro | Total | Total | ||||
| Pulp | UWF Paper | Tissue Paper | Energy | Amount | % | |
| Portugal | 1,898,490 | 52,060,405 | 65,961,010 | 130,028,533 | 249,948,438 | 17.11% |
| Rest of Europe | 69,138,341 | 572,437,321 | 145,250,274 | - | 786,825,936 | 53.87% |
| USA | - | 35,241,109 | 1,205,906 | - | 36,447,015 | 2.50% |
| North America - Other | 515,998 | 1,667,083 | 400,321 | - | 2,583,402 | 0.18% |
| Latin America | 789,099 | 37,203,188 | - | - | 37,992,287 | 2.60% |
| Africa | 20,681,213 | 115,958,048 | 3,237,783 | - | 139,877,044 | 9.58% |
| Asia | 105,844,659 | 100,857,389 | 50,522 | - | 206,752,570 | 14.16% |
| Oceania | - | 133,050 | - | - | 133,050 | 0.01% |
| 198,867,800 | 915,557,593 | 216,105,816 | 130,028,533 | 1,460,559,742 | 100.00% | |
| Recognition pattern | ||||||
| At a certain moment in time | 198,867,800 | 915,557,593 | 216,105,816 | 130,028,533 | 1,460,559,742 | 100.00% |
| Over time | - | - | - | - | - | 0.00% |
Group's revenue distribution by geographic area
In 2024 and 2023, no single Customer accounted for 10% or more of the Group's total revenues.
2.2 Other operating income
For the nine-month periods ended 30 September 2024 and 2023, Other operating income is detailed as follows:
| 9 months | 9 months | |
|---|---|---|
| Amounts in Euro | 30-09-2024 | 30-09-2023 |
| Gains on disposal of non-current assets | 94,782 | 245,793 |
| Grants - CO2 emission allowances | 26,631,681 | 28,073,421 |
| Supplementary gains | 1,005,694 | 769,906 |
| Operating grants | 8,001,085 | 3,609,181 |
| Impairment reversal on receivables (Note 4.1.2) | 4,163,129 | 1,474,249 |
| Impairment reversal on inventories | 4,799,350 | 112,683 |
| Scrap sales | - | 527,923 |
| Gains on inventories | 395,613 | 527,922 |
| Own work capitalised | 2,228,229 | 761,416 |
| Compensations | 403,395 | 1,420,920 |
| Other operating income | 13,222,585 | 8,964,561 |
| 60,945,543 | 46,487,975 |
Gains on CO2 emission allowances correspond to the recognition of free allocation of allowances for 480,955 tonnes of CO2, at the average price of Euro 73.83 (473,314 tonnes of CO2, at the average price of Euro 83.85 as at 30 September 2023) (Note 3.2).
Operating grants include Euro 5,750,000 relating to the specialisation of grants awarded under the Environmental Fund and Euro 2,050,008 (Euro 1,478,656 in 2023) relating to grants awarded under the Recovery and Resilience Plan (RRP). This caption also includes grants awarded for research and development projects carried out by the RAIZ institute.
The caption Impairment reversal on receivables includes the amount of Euro 1,227,079 related to the impairment reversal on Trade receivables from Egypt. This caption also includes the Mozambique impairment, which until June was recognised in retained earnings at Euro 3,087,032.
The caption Reversal of impairment losses on inventories essentially refers to the reversal of impairment losses on waste and damaged stocks.
Other operating income includes Euro 11,438,476 (Euro 5,200,855 in 2023) relating to the sale of UWF paper and tissue waste.
2.3 Other operating expenses
| 9 months | 9 months | |
|---|---|---|
| Amounts in Euro | 30-09-2024 | 30-09-2023 |
| Cost of goods sold and materials consumed (Note 4.1.2) | 666,463,752 | 658,202,460 |
| External services and supplies | ||
| Energy and fluids | 96,086,186 | 64,460,472 |
| Transportation of Goods | 100,882,351 | 100,833,759 |
| Specialised work | 72,705,121 | 69,831,869 |
| Maintenance and repair | 27,461,741 | 26,867,284 |
| Rentals | 5,788,184 | 6,816,081 |
| Advertising and marketing | 9,588,759 | 8,296,116 |
| Insurance | 9,310,315 | 8,307,521 |
| Travel and accommodation | 3,786,575 | 3,611,482 |
| Fees | 5,123,619 | 3,579,254 |
| Subcontracts | 2,501,031 | 2,470,676 |
| Materials | 2,564,242 | 1,963,308 |
| Communications | 999,516 | 950,766 |
| Other | 10,838,982 | 9,235,100 |
| 347,636,622 | 307,223,688 | |
| Variation in production (Note 4.1.3) | (8,256,760) | (2,038,370) |
| Payroll costs (Note 7.1) | 152,971,921 | 128,189,117 |
| Other operating expenses | ||
| Costs with CO2 emission allowances | 24,378,495 | 26,315,371 |
| Impairment losses on receivables (Note 8.1.4) | 131,983 | (95,196) |
| Impairment losses on inventories (Note 4.1.4) | 6,928,622 | 1,870,183 |
| Other inventory losses | 3,829,121 | 3,079,501 |
| Indirect taxes | 2,379,758 | 1,846,087 |
| Losses on disposal of non-current assets | 3,492 | 2,007 |
| Water resource fee | 1,350,156 | 1,328,828 |
| Other operating expenses | 2,520,713 | 2,960,867 |
| 41,522,340 | 37,307,648 | |
| Net provisions (Note 9.1) | 104,902 | 1,289,652 |
| Total operating expenses | 1,200,442,777 | 1,130,174,195 |
During the nine-month period ended 30 September 2024, there was an increase in energy and fluid costs, mainly due to an increase in the purchase price of electricity compared to the same period of the previous year.
The expenses with CO2 correspond to the emission of 351,658 tonnes of CO21 (30 September 2023: 334,725 tonnes).
Impairment losses on receivables corresponds to the amount of impairment losses on trade receivables in Egypt.
In 2024, the caption Impairment losses on inventories includes the recognition of an impairment on Navigator North America's Slow Movers in the amount of Euro 1,669,406.
In the nine-month period ended 30 September 2024, the increase in Other inventory losses resulted mainly from wood inventory losses (Euro 1,834,035).
1 CO2 emissions from assets in factories, Scope 1 - EU ETS basis.
3. Investments
3.1. Goodwill
Goodwill – net amount
Goodwill is attributed to the Group's cash generating units (CGU's), as follows:
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| CGU of UWF paper production on Figueira da Foz site (goodwill resulting from the acquisition of Navigator Brands, S.A.) |
376,756,383 | 376,756,383 |
| CGU of Tissue paper production on Vila Velha de Ródão site (goodwill resulting from the acquisition of Navigator Tissue Ródão, S.A.) |
583,083 | 583,083 |
| CGU of the production and sale of Tissue paper in Ejea and France | ||
| (goodwill resulting from the acquisition of Navigator Tissue Ejea, SL. and Navigator Tissue France, EURL) |
4,156,542 | 4,156,542 |
| CGU of the production and sale of Tissue paper in the United Kingdom | ||
| (initial goodwill resulting from the acquisition of accrol Holdings Plc Group) | 102,610,667 | - |
| 484,106,675 | 381,496,008 |
Navigator Brands, S.A. / Navigator Paper Figueira, S.A.
Following the acquisition of 100% of the former Soporcel - Sociedade Portuguesa de Papel, S.A. (currently Navigator Brands, S.A.), for Euro 1,154,842,000, Goodwill amounting to Euro 428,132,254 was determined.
The Goodwill generated on the acquisition of Navigator Paper Figueira was deemed to be allocable to the integrated paper production in Figueira da Foz Industrial Complex cash generating unit.
The book value of Goodwill amounts to Euro 376,756,383 for having been subject to annual amortisations until 31 December 2003 (date of transition to IFRS: 1 January 2004), and amortisation, as from that date, the accumulated amount of which was Euro 51,375,871, has ceased. Since that date, annual tests have been carried out to determine any impairment losses.
Navigator Tissue Ródão, S.A.
On 6 February 2015 the procedures and agreements for the acquisition of AMS-BR Star Paper, S.A. (later merged into Navigator Tissue Ródão, S.A.) were concluded, with the authorisation to conclude this transaction being formalised on 17 April 2015.
To the initial acquisition difference, of Euro 21,337,916, was deducted the AICEP's investment grant and the fair value of the acquired property, plant and equipment, with a goodwill amounting to Euro 583,083.
Navigator Tissue Ejea, S.L.U.
On 31 March 2023, the Navigator Group acquired all the shares representing the share capital of Gomà-Camps Consumer, S.L.U., based in Zaragoza, Spain, which in turn holds the entire share capital of Gomà-Camps France SAS, based in Castres, France. These companies have been renamed Navigator Tissue Ejea, S.L.U. and Navigator Tissue France SAS, respectively.
The Enterprise Value of this acquisition amounted to Euro 60,951,811 and was realised entirely in cash and cash equivalents, with no contingent consideration associated with this acquisition.
The initial acquisition difference of Euro 34,037,142 was deducted from the fair value attributed to property, plant and equipment and intangible assets acquired in the amount of Euro 38,240,800 and Euro 1,600,000, respectively, resulting in final goodwill of Euro 4,156,542.
The valuation techniques used to determine the fair value of the assets acquired were as follows:
| Customer portfolio | The multi-period excess earnings method (MPEEM) was used to determine the fair value of the customer portfolio, considering the present value of the portfolio's expected net cash flows |
|---|---|
| Property, plant and equipment |
The fair value of property, plant and equipment acquired, namely land, buildings and factory equipment, was determined in accordance with the replacement cost method, which consists of identifying the replacement value of the assets acquired adjusted for depreciation, in accordance with the useful life of the assets at the date of purchase. According to the study, the following useful lives were considered: - Buildings and other constructions - 40 years; - Industrial equipment - between 25 and 30 years |
Navigator Tissue UK
On 24 May 2024, the Navigator Group concluded a Initial Public Offer, in the form of a "Recommended Firm Cash Offer", for the entire share capital of Accrol Group Holdings Plc (Accrol), a company based in Blackburn, England, which holds 9 subsidiaries, 3 of which operational. Accrol Group is a leader in the tissue paper converting segment in the United Kingdom, producing private label toilet rolls, kitchen rolls and facial tissues for most of the main retailers in the UK.
As part of this acquisition, the consideration transferred amounted to Euro 153,765,150 (GBP 130,823,389) and an initial goodwill of Euro 100,756,969 (GBP 85,724,029) was recorded. On 30 September, goodwill amounted to Euro 102,610,667 as a result of the exchange rate update at the rate of 0.83543.
As at this date, the Group is carrying out the necessary procedures to recognise and measure the identifiable assets acquired, the liabilities assumed and consequently the calculation of the goodwill or gain resulting from the operation, in accordance with IFRS 3. This evaluation will be carried out by external specialised and independent evaluators.
3.2. Intangible assets
Movements in intangible assets
| Amounts in Euro | Industrial property and other rights |
CO2 emission allowances |
Other intangible assets |
Intangible assets in progress |
Total |
|---|---|---|---|---|---|
| Gross amount | |||||
| Balance as at 01 January 2023 | 70,983 | 44,781,151 | - | - | 44,852,134 |
| Allocations | - | 39,687,379 | - | - | 39,687,379 |
| Changes in the perimeter | 1,755,429 | - | - | - | 1,755,429 |
| Acquisitions | 2,400,000 | - | - | 513,498 | 2,913,498 |
| Adjustments, transfers and write-offs | 513,498 | (42,966,321) | - | (513,498) | (42,966,321) |
| Balance as at 30 September 2023 | 4,739,910 | 41,502,209 | - | - | 46,242,119 |
| Changes in the perimeter | (1,755,429) | - | 3,346,282 | - | 1,590,853 |
| Adjustments, transfers and write-offs | (265,262) | - | - | - | (265,262) |
| Balance as at 31 December 2023 | 2,719,219 | 41,502,209 | 3,346,282 | - | 47,567,710 |
| Changes in the perimeter (Note 1.2) | 8,033,211 | - | 50,628,820 | 509,175 | 59,171,206 |
| Allocations | - | 35,508,908 | - | - | 35,508,908 |
| Adjustments, transfers and write-offs | 3,346,282 | (38,411,618) | (3,346,282) | - | (38,411,618) |
| Exchange rate adjustment | 147,793 | - | 931,454 | 9,368 | 1,088,615 |
| Balance as at 30 September 2024 | 14,246,505 | 38,599,499 | 51,560,274 | 518,543 | 104,924,821 |
| Accumulated amortisation and impairment losses | |||||
| Balance as at 1 January 2023 | (39,043) | - | - | - | (39,043) |
| Amortisation for the period (Note 3.6) | (189,222) | - | - | - | (189,222) |
| Changes in the perimeter Balance as at 30 September 2023 |
(1,341,517) (1,569,782) |
- | - | - | (1,341,517) (1,569,782) |
| Changes in the perimeter | 1,341,517 | - | - (1,341,517) |
- | |
| Amortisation for the period (Note 3.6) | (74,097) | - | - | - (74,097) |
|
| Adjustments, transfers and write-offs | 274,409 | - - |
- - |
- - |
274,409 |
| Balance as at 31 December 2023 | (27,953) | - | (1,341,517) | - | (1,369,470) |
| Changes in the perimeter (Note 1.2) | (4,325,507) | - | (32,570,866) | - | (36,896,373) |
| Amortisation for the period (Note 3.6) | (1,490,592) | - | (2,113,398) | - | (3,603,990) |
| Impairment losses for the period (Note 3.6) | (693,705) | (693,705) | |||
| Adjustments, transfers and write-offs | - (1,358,958) |
- 1,341,517 |
- | (17,441) | |
| Exchange rate adjustment | (93,330) | - | (629,763) | - | (723,093) |
| Balance as at 30 September 2024 | (7,296,340) | - (693,705) |
(35,314,027) | - - |
(43,304,072) |
| Net book value as at 1 January 2023 | 31,940 | 44,781,151 | - | - | 44,813,091 |
| Net book value as at 30 September 2023 | 3,170,128 | 41,502,209 | - | - | 44,672,337 |
| Net book value as at 31 December 2023 | 2,691,266 | 41,502,209 | 2,004,765 | - | 46,198,240 |
| Net book value as at 30 September 2024 | 6,950,165 | 37,905,794 | 16,246,247 | 518,543 | 61,620,749 |
As at 30 September 2024, there was an increase in other intangible assets as a result of the acquisition of the Accrol Group, which are under analysis as part of the procedures That Group is developing for the recognition and measurement of the identifiable assets acquired, in accordance with IFRS 3.
The increase in intellectual property and other rights and other intangible assets in 2023 corresponds to the acquisition of the tissue brands and the valuation of the customer portfolio acquired from Gomà-Camps, respectively.
CO2 allowances
| 30-09-2024 | 31-12-2023 | |
|---|---|---|
| CO2 emission allowances (units) | 517,815 | 494,850 |
| Average unit value (Euro) | 74.54 | 83.87 |
| Market quotation (Euro) | 65.03 | 78.06 |
In the third quarter of 2024, an impairment charge of Euro 693,705 was recognised.
CO2 allowances – movements in the period
| 30-09-2024 | 31-12-2023 | |||
|---|---|---|---|---|
| Amounts in Euro | Tonnes | Amount | Tonnes | Amount |
| Opening balance | 494,850 | 41,502,209 | 574,122 | 44,781,151 |
| CO2 allowances awarded free of charge (Note 2.2) | 480,955 | 35,508,908 | 473,314 | 39,687,379 |
| CO2 allowances returned to the Licensing Coordinating Entity | (457,990) | (38,411,618) | (552,586) | (42,966,321) |
| Closing balance | 517,815 | 38,599,499 | 494,850 | 41,502,209 |
3.3. Property, plant and equipment
Movements in property, plant and equipment
| Lands Buildings other tangibles construction Total Amounts in Euro Gross amount Balance as at 1 January 2023 115,774,318 544,499,868 3,727,191,728 92,156,485 4,479,622,399 Changes in the perimeter 2,763,618 18,905,954 61,489,209 74,053 83,232,834 Acquisitions 7,795,687 133,584,856 141,380,543 - - Disposals (22,489) (31,218) (53,707) - - Adjustments, transfers and write-offs 500,081 986,068 42,255,740 (46,123,082) (2,381,193) Balance as at 30 September 2023 119,015,528 564,391,890 3,838,701,146 179,692,312 4,701,800,876 Changes in the perimeter 1,130,458 12,438,973 24,669,998 38,239,429 - Acquisitions 377,216 2,192,396 39,031,298 41,600,910 - Disposals (19,354) (136,266) (326,410) (482,030) - Adjustments, transfers and write-offs 1,467,072 156,780 57,437,757 (57,969,216) 1,092,393 Balance as at 31 December 2023 121,593,704 577,228,593 3,922,674,887 160,754,394 4,782,251,578 Changes in the perimeter (Note 1.2) 90,935,683 3,122,596 94,058,279 - - Acquisitions 9,115,619 142,806,838 151,922,457 - - Disposals (2,211) (27,620) (29,831) - - Adjustments, transfers and write-offs 1,293,647 1,573,054 155,378,732 (162,909,114) (4,663,681) Effect of exchange rate variation 1,677,071 68,433 1,745,504 - - Balance as at 30 September 2024 122,885,140 578,801,647 4,179,754,372 143,843,147 5,025,284,306 Accumulated depreciation and impairment losses Balance as at 1 January 2023 (381,686,338) (2,998,246,653) (3,379,932,992) - - Changes in the perimeter (8,940,894) (31,324,474) (40,265,368) - - Depreciation for the period (Note 3.6) (10,316,568) (83,759,249) (94,075,817) - - Disposals 1,223 1,223 - - - Adjustments, transfers and write-offs (4,845,941) 4,989,945 144,004 - - Balance as at 30 September 2023 (395,953,855) (3,118,175,094) (3,514,128,950) - - Changes in the perimeter - - - - - Depreciation for the period (Note 3.6) (3,483,245) (32,622,979) (36,106,224) - - Disposals 120,107 315,200 435,307 - - Adjustments, transfers and write-offs 238,915 533,165 772,080 - - Balance as at 31 December 2023 (399,078,078) (3,149,949,708) (3,549,027,787) - - Changes in the perimeter (Note 1.2) (33,947,033) (33,947,033) - - - Depreciation for the period (Note 3.6) |
Equipment and | Assets under | |||
|---|---|---|---|---|---|
| - | (10,732,421) | (93,513,328) | (104,245,749) | ||
| Disposals 27,620 27,620 - - - |
|||||
| Adjustments, transfers and write-offs 1,495,087 3,576,009 5,071,096 - - |
|||||
| Effect of exchange rate variation (646,776) (646,776) - - - |
|||||
| Balance as at 30 September 2024 (408,315,412) (3,274,453,216) (3,682,768,629) - - |
|||||
| Net book value as at 1 January 2023 115,774,318 162,813,530 728,945,075 92,156,485 1,099,689,407 |
|||||
| Net book value as at 30 September 2023 119,015,528 168,438,035 720,526,052 179,692,312 1,187,671,926 |
|||||
| Net book value as at 31 December 2023 121,593,704 178,150,515 772,725,179 160,754,394 1,233,223,791 |
|||||
| Net book value as at 30 September 2024 122,885,140 170,486,235 905,301,156 143,843,147 1,342,515,677 |
As at 30 September 2024, Assets under construction include investments related to ongoing development projects, in particular the new recovery boiler in Setúbal (Euro 79,489,793), the collection and incineration of NCGs (Non-Condensable Gases) (Euro 8,026,290), oxygen delignification (Euro 3,204,750), the new bleaching tower in Aveiro (Euro 2,500,000), the new cogeneration plant in Aveiro (Euro 3,596,857), the new biomass boiler in Vila Velha de Rodão (Euro 1,197,164), investments in the photovoltaic plant (Euro 1,191,140), in the new cogeneration plant (Euro 1,813,673) adapting the firing process for hydrogen (Euro 1,668,688) and the new biomass lime kiln (Euro 9,554,448) in Figueira da Foz. The remainder is related to several projects for improving and optimising the production process.
Of the total investment of Euro 151,922,457, approximately 53% relates to investments classified as ESG and Euro 68,104,068 relates to investments under the Recovery and Resilience Plan (RRP).
Lands includes Euro 113,825,069 (31 December 2023: Euro 115,903,357) classified in the individual financial statements as investment properties, from which Euro 76,880,041 (31 December 2023: Euro 76,765,242) relate to forestry land and Euro 36,945,028 (31 December 2023: Euro 39,138,115) to land allocated to industrial sites.
3.4. Investment properties
Movements in investment properties
| Buildings and other |
|||
|---|---|---|---|
| Amounts in Euro | Land | constructions | Total |
| Gross amount | |||
| Balance as at 1 January 2023 | 424,744 | 82,307 | 507,051 |
| Acquisitions | - | - | - |
| Disposals | - | - | - |
| Balance as at 30 September 2023 | 424,744 | 82,307 | 507,051 |
| Acquisitions | - | - | - |
| Disposals | - | - | - |
| Adjustments, transfers and write-offs | 142,288 | 530,684 | 672,972 |
| Balance as at 31 December 2023 | 567,032 | 612,991 | 1,180,023 |
| Acquisitions | - | - | - |
| Disposals | (25,371) | (82,308) | (107,679) |
| Balance as at 30 September 2024 | 541,661 | 530,683 | 1,072,344 |
| Accumulated depreciation and impairment losses | |||
| Balance as at 1 January 2023 | (399,372) | (16,735) | (416,107) |
| Depreciation for the period (Note 3.6) | - | (1,235) | (1,235) |
| Balance as at 30 September 2023 | (399,372) | (17,970) | (417,342) |
| Depreciation for the period (Note 3.6) | - | (411) | (411) |
| Adjustments, transfers and write-offs | - | (298,866) | (298,866) |
| Balance as at 31 December 2023 | (399,372) | (317,247) | (716,619) |
| Depreciation for the period (Note 3.6) | - | (11,855) | (11,855) |
| Disposals | - | 19,479 | 19,479 |
| Balance as at 30 September 2024 | (399,372) | (309,623) | (708,995) |
| Net book value as at 1 January 2023 | 25,372 | 65,572 | 90,943 |
| Net book value as at 30 September 2023 | 25,372 | 64,337 | 89,709 |
| Net book value as at 31 December 2023 | 167,660 | 295,744 | 463,404 |
| Net book value as at 30 September 2024 | 142,289 | 221,060 | 363,350 |
The amount for adjustments, transfers and write-offs as at 31 December 2023 pertains to the building at Rua São José 35, 2º - A Lisboa 1150-321. The building is owned by the subsidiary Empremédia – Corretores de Seguros, S.A. It is no longer used for the Group's operational activity since the transfer of this subsidiary's employees to the Navigator building on Avenida Fontes Pereira de Melo.
These assets are not allocated to the Group's operating activity, nor do they have any future use determined.
3.5. Right-of-use assets
Movements in right-of-use assets
| Software | Other lease | |||||
|---|---|---|---|---|---|---|
| Amounts in Euro | Forestry lands | Buildings | Vehicles | licenses | assets | Total |
| Gross amount | ||||||
| Balance as at 1 January 2023 | 58,830,098 | 4,655,055 | 11,577,961 | 1,556,613 | 9,420,387 | 86,040,114 |
| Acquisitions | 8,126,220 | 10,062 | 2,028,062 | - | - | 10,164,344 |
| Adjustments, transfers and write-offs | - | (356,397) | (5,604) | - | - | (362,001) |
| Balance as at 30 September 2023 | 66,956,318 | 4,308,720 | 13,600,419 | 1,556,613 | 9,420,387 | 95,842,457 |
| Acquisitions | 2,989,857 | 43,682 | 1,041,721 | - | 1,764,073 | 5,839,333 |
| Adjustments, transfers and write-offs | - | - | (2,705,726) | (342,519) | - | (3,048,245) |
| Balance as at 31 December 2023 | 69,946,175 | 4,352,402 | 11,936,414 | 1,214,094 | 11,184,460 | 98,633,545 |
| Changes in the perimeter (Note 1.2) | - | 2,764,428 | 276,256 | 175,801 | 51,704,754 | 54,921,239 |
| Acquisitions | 4,189,667 | 117,679 | 3,017,854 | 35,253 | - | 7,360,453 |
| Disposals | - | - | (51,756) | - | (980,478) | (1,032,234) |
| Adjustments, transfers and write-offs | (1,344,968) | (7,922) | (1,290,660) | (21,632) | (2,665,182) | |
| Exchange rate adjustment | - | 50,859 | 4,791 | 3,234 | 937,084 | 995,968 |
| Balance as at 30 September 2024 | 72,790,874 | 7,277,446 | 13,892,899 | 1,428,382 | 62,824,188 | 158,213,789 |
| Accumulated depreciation and impairment losses | ||||||
| Balance as at 1 January 2023 | (12,821,763) | (2,400,948) | (7,281,667) | (1,113,577) | (4,487,317) | (28,105,272) |
| Depreciation | (2,909,790) | (385,719) | (1,471,510) | (119,721) | (1,260,311) | (6,147,051) |
| Adjustments, transfers and write-offs | - | 356,397 | 5,604 | - | - | 362,001 |
| Balance as at 30 September 2023 | (15,731,553) | (2,430,270) | (8,747,573) | (1,233,298) | (5,747,628) | (33,890,322) |
| Depreciation | (1,051,640) | (134,446) | (1,060,776) | (230,714) | (842,530) | (3,320,106) |
| Adjustments, transfers and write-offs | - | 3,235,098 | 342,519 | 43,721 | 3,621,338 | |
| Balance as at 31 December 2023 | (16,783,193) | (2,564,716) | (6,573,251) | (1,121,493) | (6,546,437) | (33,589,090) |
| Changes in the perimeter (Note 1.2) | (1,671,085) | (72,706) | (142,632) | (11,119,701) | (13,006,124) | |
| Depreciation | (3,148,465) | (455,865) | (1,801,880) | (169,737) | (3,164,757) | (8,740,704) |
| Disposals | 8,626 | - | 8,626 | |||
| Adjustments, transfers and write-offs | 1,344,968 | (2,999) | 1,237,623 | 13,952 | 21,635 | 2,615,179 |
| Exchange rate adjustment | - | (31,630) | (1,711) | (3,028) | (230,479) | (266,848) |
| Balance as at 30 September 2024 | (18,586,690) | (4,726,295) | (7,203,299) | (1,422,938) | (21,039,739) | (52,978,961) |
| Net book value as at 1 January 2023 | 46,008,335 | 2,254,107 | 4,296,294 | 443,036 | 4,933,070 | 57,934,841 |
| Net book value as at 30 September 2023 | 51,224,765 | 1,878,450 | 4,852,846 | 323,315 | 3,672,759 | 61,952,135 |
| Net book value as at 31 December 2023 | 53,162,982 | 1,787,686 | 5,363,163 | 92,601 | 4,638,023 | 65,044,454 |
| Net book value as at 30 September 2024 | 54,204,184 | 2,551,151 | 6,689,600 | 5,444 | 41,784,449 | 105,234,827 |
The caption Forestry lands relates essentially to the land use rights of existing forest exploration, whose agreements usually have a duration of 24 years, and may be cancelled in advance if the 2nd harvest takes place before the 24th year of the agreement term.
The caption Buildings refers to the lease agreement entered between The Navigator Company, S.A. e a MaxiRent - Fundo de Investimento Imobiliário Fechado for the building located at Avenida Fontes Pereira de Melo, in Lisbon, for use as an office until May 2027.
The caption Other lease assets includes the forklift truck rental contracts signed since 2020.
As at 30 September 2024, the cash flows associated with the amortisation of lease agreements correspond to financial amortisation of Euro 9,479,767 (Euro 6,150,160 as at 30 September 2023) and interest of Euro 2,691,231 (Euro 1,807,887 as at September 2023) (Note 5.6), for a total amount of Euro 12,170,998 (Euro 7,958,047 as at 30 September 2023), as disclosed in the Cash Flow Statement.
3.6. Depreciation, amortisation and impairment losses
| Amounts in Euro | 30-09-2024 | 30-09-2023 |
|---|---|---|
| Depreciation of property, plant and equipment for the period (Note 3.2) | 104,245,749 | 94,075,817 |
| Charge-off of investment grants | (2,779,868) | (2,775,893) |
| Depreciation of property, plant and equipment, net of grants charged-off | 101,465,881 | 91,299,924 |
| Amortisation of intangible assets for the period (Note 3.2) | 3,603,990 | 189,222 |
| Impairment on intangible assets – losses | 693,705 | - |
| Impairment of intangible assets for the period (Note 3.2) | 693,705 | - |
| Depreciation of right-of-use assets for the period (Note 3.5) | 8,740,704 | 6,147,051 |
| Depreciation of investment properties (Note 3.4) | 11,855 | 1,235 |
| 114,516,135 | 97,637,432 |
The Group periodically uses external and independent experts to assess its industrial assets, as well as to assess the adequacy of the estimates used in terms of the useful lives of these assets.
3.7. Biological assets
Movements in biological assets
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Opening balance | 115,591,979 | 122,499,875 |
| Logging in the period | (14,781,134) | (13,351,173) |
| Growth | 20,219,572 | 13,672,219 |
| New planted areas and replanting | 1,496,420 | 1,740,457 |
| Other changes in fair value | ||
| - changes in other species | (278,350) | (628,406) |
| - other changes in expectations | (4,551,128) | (4,330,495) |
| Total changes | 2,105,380 | (2,897,398) |
| Amount as at 30 September | 117,697,359 | 119,602,477 |
| Remaining quarters | (4,010,498) | |
| Amount as at 31 December | 115,591,979 |
The Navigator Group considers, in accordance with IAS 41, mature assets to be those that have reached the necessary specifications to obtain the maximum yield based on their profitability, supply needs and opportunity cost. Typically, the forest in Portugal reaches its maturity between 8 and 12 years, and this reference depends on the species, soil conditions, as well as edaphoclimatic conditions. Data on the forest, its condition and its future potential are measured at least twice throughout its growth cycle.
The discount rate used in the nine-month period ended 30 September 2024 was 5.19% (2023: 5.19%). Note that the Group incorporates the fire risk into the model's cash flows. If this risk was incorporated into the discount rate, it would be of 7%.
As at 30 September 2024 and 31 December 2023, biological assets, by species, are detailed as follows:
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Eucalyptus (Portugal) | 88,308,868 | 88,244,919 |
| Eucalyptus (Spain) | 2,104,051 | 1,628,022 |
| Pine (Portugal) | 5,620,095 | 5,898,445 |
| Cork oak (Portugal) | 835,149 | 835,149 |
| Other species (Portugal) | 73,107 | 73,107 |
| Eucalyptus (Mozambique) | 20,756,089 | 18,912,337 |
| 117,697,359 | 115,591,979 |
These amounts correspond to the Board of Directors' expectations of the volumes to be extracted from its woodlands in the future, as follows:
| 30-09-2024 | 31-12-2023 | |
|---|---|---|
| Eucalyptus (Portugal) – Potential future of wood extractions k m3ssc | 10,577 | 10,447 |
| Eucalyptus (Spain) - Potential future of wood extractions k m3ssc | 251 | 252 |
| Pine (Portugal) – Potential future of wood extractions k ton | 273 | 290 |
| Cork oak (Portugal) – Potential future of cork extractions k @ | 502 | 488 |
| Eucalyptus (Mozambique) – Potential future of wood extractions k m3ssc | 3,632 | 3,570 |
Concerning Eucalyptus, the most relevant biological asset in the financial statements, the Group extracted, as at 30 September 2024, 386,285 m3ssc of wood from its owned and explored forests (31 December 2023: 594,709 m3ssc).
As at 30 September 2024 and 31 December 2023, (i) there are no amounts of biological assets whose property is restricted and/or pledged as guarantee for liabilities, nor there are non-reversible commitments related to the acquisition of biological assets, and (ii) there are no government grants related to biological assets recognised in the Group's consolidated financial statements.
4. Working capital
4.1. Inventories
4.1.1. Inventories - detail by nature
Net amounts of accumulated impairment losses
| 30-09-2024 | 31-12-2023 | |||||
|---|---|---|---|---|---|---|
| Net realisable | Net realisable | |||||
| Amounts in Euro | Gross amount | Impairment | value | Gross amount | Impairment | value |
| Raw materials | 177,224,478 | (11,621,759) | 165,602,719 | 157,488,326 | (9,121,113) | 148,367,213 |
| Goods | 115,430 | (20,222) | 95,208 | 863,897 | (20,222) | 843,675 |
| Subtotal | 177,339,908 | (11,641,981) | 165,697,927 | 158,352,223 | (9,141,335) | 149,210,888 |
| Finished and intermediate products | 158,012,820 | (6,403,123) | 151,609,697 | 139,515,678 | (4,540,071) | 134,975,607 |
| Goods and work in progress | 3,544,130 | (216,052) | 3,328,078 | 2,254,788 | (252,405) | 2,002,383 |
| By-products and waste | 6,106,153 | (5,883,395) | 222,758 | 6,949,627 | (6,648,143) | 301,484 |
| Subtotal | 167,663,103 | (12,502,570) | 155,160,533 | 148,720,093 | (11,440,619) | 137,279,474 |
| Total | 345,003,011 | (24,144,551) | 320,858,460 | 307,072,316 | (20,581,954) | 286,490,362 |
4.1.2. Movements in impairment losses in inventories
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Opening balance | (20,581,954) | (16,374,423) |
| Increases (Note 2.3) | (6,928,622) | (4,562,677) |
| Reversals (Note 2.2) | 4,799,350 | 123,697 |
| Impact in profit or loss for the period | (2,129,272) | (4,438,980) |
| Charge-off | (1,433,325) | (121,597) |
| Balance as at 30 September | (24,144,551) | (20,935,000) |
| Remaining quarters | 353,046 | |
| Closing balance | (20,581,954) |
4.2. Receivables
| 30-09-2024 | 31-12-2023 | ||||||
|---|---|---|---|---|---|---|---|
| Amounts in Euro | Non-current | Current | Total | Non-current | Current | Total | |
| Trade receivables | - | 312,416,338 | 312,416,338 | - | 259,060,739 | 259,060,739 | |
| Receivables - Related companies (Note 10.3) | - | - | - | - | 102 | 102 | |
| State | - | 60,598,975 | 60,598,975 | - | 57,026,840 | 57,026,840 | |
| Grants receivable | 12,831,066 | 63,016,268 | 75,847,334 | 39,821,344 | 52,821,895 | 92,643,239 | |
| Department of Commerce (USA) | 3,417,642 | - | 3,417,642 | 2,872,289 | - | 2,872,289 | |
| Accrued income | - | 13,132,980 | 13,132,980 | - | 12,304,428 | 12,304,428 | |
| Deferred expenses | - | 24,440,583 | 24,440,583 | - | 14,955,574 | 14,955,574 | |
| Derivative financial instruments (Note 8.1.1) | - | 30,239,922 | 30,239,922 | - | 19,458,938 | 19,458,938 | |
| Other | 2,609,019 | 16,580,503 | 19,189,523 | 1,705,873 | 9,112,457 | 10,818,330 | |
| 18,857,727 | 520,425,569 | 539,283,297 | 44,399,506 | 424,740,973 | 469,140,480 |
State
State is detailed as follows:
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Value added tax - recoverable | 5,051,062 | 4,299,693 |
| Value Added Tax – repayment requests | 55,547,913 | 52,727,147 |
| 60,598,975 | 57,026,840 |
As at 30 September 2024, the amount of repayment requests comprised the following, by month and by company:
| Amounts in Euro | Aug-2024 | Sep-2024 | Total |
|---|---|---|---|
| The Navigator Company, S.A. | 24,015,047 | 14,924,237 | 38,939,284 |
| Navigator Abastecimento de Madeira, ACE | 630,000 | 700,000 | 1,330,000 |
| Navigator Paper Setúbal, S.A. | - | 5,000,000 | 5,000,000 |
| Navigator Paper Figueira, S.A. | 330,000 | 6,500,000 | 6,830,000 |
| Bosques do Atlântico, S.L. | - | 2,448,629 | 2,448,629 |
| Navigator Forest Portugal, S.A. | 470,000 | 530,000 | 1,000,000 |
| 25,445,047 | 30,102,866 | 55,547,913 |
Up to the date of issuing this report, Euro 42,166,378 of the outstanding amounts as at 30 September 2024, had already been received.
As at 31 December 2023, the amount of repayment requests comprised the following, by month and by Company:
| Amounts in Euro | Nov-2023 | Dec-2023 | Total |
|---|---|---|---|
| The Navigator Company, S.A. | 14,904,962 | 24,056,600 | 38,961,562 |
| Navigator Tissue Rodão S.A. | 1,500,000 | - | 1,500,000 |
| Navigator Paper Figueira S.A. | 9,000,000 | - | 9,000,000 |
| Bosques do Atlântico, S.L. | - | 3,265,585 | 3,265,585 |
| 25,404,962 | 27,322,185 | 52,727,147 |
All these amounts were received during the first quarter of 2024.
Grants receivable
Grants receivable are detailed as follows:
| 30-09-2024 | 31-12-2023 | |||||
|---|---|---|---|---|---|---|
| Amounts in Euro | Non-current | Current | Total | Non-current | Current | Total |
| AICEP Contracts | - | 2,407,395 | 2,407,395 | - | 9,721,792 | 9,721,792 |
| Recovery and Resilience Plan | 9,029,035 | 53,418,820 | 62,447,855 | 37,890,496 | 37,890,496 | 75,780,992 |
| Other | 3,802,031 | 7,190,053 | 10,992,084 | 1,930,848 | 5,209,607 | 7,140,455 |
| 12,831,066 | 63,016,268 | 75,847,334 | 39,821,344 | 52,821,895 | 92,643,239 |
Accrued Income and Deferred Expenses
Accrued income and deferred expenses are detailed as follows:
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Accrued income | ||
| Interest receivable | - | 570,646 |
| Energy sales | 9,516,787 | 10,280,593 |
| Other | 3,616,193 | 1,453,189 |
| 13,132,980 | 12,304,428 | |
| Deferred expenses | ||
| Insurance | 4,055,861 | 91,023 |
| Rentals | 14,206,329 | 12,587,120 |
| Other | 6,178,393 | 2,277,431 |
| 24,440,583 | 14,955,574 | |
| 37,573,563 | 27,260,002 |
Other receivables
Other current and non-current receivables consist of the following:
Other non-current receivables
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Labour Compensation Fund | - | 769,982 |
| Collateral | 49,513 | 45,707 |
| Pensions and other post-employment benefits | - | 777,147 |
| Other shareholdings (Almascience, Forestwise, Cecolab, Colab BIOREF) |
69,600 | 69,800 |
| Receivables - leasing | 2,441,405 | - |
| Other receivables | 48,501 | 43,237 |
| 2,609,019 | 1,705,873 |
Other current receivables
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Advances to personnel | 110,333 | 114,765 |
| Advances to suppliers | 11,184,752 | 7,432,928 |
| Other receivables | 5,285,418 | 1,564,764 |
| 16,580,503 | 9,112,457 |
4.3. Payables
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Trade payables - current account | 208,962,140 | 209,023,299 |
| Trade payables - invoices pending - logistics | 15,411,487 | 12,915,733 |
| Trade payables - invoices pending - other | 79,923,705 | 60,955,309 |
| Trade payables – Property, plant and equipment – current account | 26,443,598 | 14,588,147 |
| State | 50,608,495 | 47,238,622 |
| Related parties (Note 10.3) | 1,669,815 | 1,542,197 |
| Other payables - CO2 emission allowances | 25,645,029 | 39,325,970 |
| Other payables | 29,473,518 | 21,675,082 |
| Derivative financial instruments (Note 8.1) | 4,768,572 | 5,691,818 |
| Accrued expenses – payroll | 46,932,460 | 39,402,872 |
| Accrued expenses – interest payable | 3,974,657 | 4,192,903 |
| Wood suppliers bonus | 5,331,702 | 3,266,604 |
| Water resource fee | 1,245,391 | 1,570,025 |
| Rent liabilities | 19,793,623 | 18,723,772 |
| Other accrued expenses | 16,155,142 | 9,874,933 |
| Non-repayable grants | 20,060,128 | 13,059,496 |
| Payables – current | 556,399,462 | 503,046,782 |
| Non-repayment grants | 118,445,576 | 112,549,349 |
| Department of Commerce (USA) (Note 4.2) | - | 2,121,441 |
| Payables – non-current | 118,445,576 | 114,670,790 |
| 674,845,038 | 617,717,572 |
The increase in the balance of Trade payables – Property, plant and equipment is due to the greater volume of investments made in 2024, as mentioned in Note 3.3. and in the other trade payables items as a result of the change in perimeter (Note 1.2).
State - Details
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Personal income tax withhold (IRS) | 1,427,075 | 2,388,230 |
| Value Added Tax | 45,441,188 | 41,208,469 |
| Social Security contributions | 2,961,149 | 2,721,253 |
| Other | 779,083 | 920,670 |
| 50,608,495 | 47,238,622 |
As at 30 September 2024 and 31 December 2023, there were no overdue debts to the State.
Non-repayable grants - details
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Government grants | 3,463,941 | 3,352,238 |
| Grants – CO2 emission allowances (Note 3.2) | 8,877,227 | - |
| Other grants | 7,718,960 | 9,707,258 |
| Non-repayable grants - current | 20,060,128 | 13,059,496 |
| Government grants | 118,445,576 | 112,549,349 |
| Non-repayable grants – non-current | 118,445,576 | 112,549,349 |
| 138,505,704 | 125,608,845 |
As at 30 September 2024, CO2 emission allowances relate to recognition of allowances granted free of charge for 2024, the amount of Euro 8,877,227 being the proportional amount to be recognised in the fourth quarter of 2024.
5. Capital Structure
5.1. Share Capital and Treasury Shares
Navigator's Shareholders
The Navigator Company is a public Company with its shares quoted on the Euronext Lisbon.
As at 30 September 2024, The Navigator Company, S.A.'s share capital of Euro 500,000,000 was fully subscribed and paid up and is represented by 711,183,069 shares without nominal value (31 December 2023: 711,183,069 shares).
As at 30 September 2024 and 31 December 2023, the Shareholders with qualified shareholdings in the Company's capital were as follows:
| 30-09-2024 | 31-12-2023 | |||
|---|---|---|---|---|
| Entity | No. of shares | % | No. of shares | % |
| Semapa, SGPS, S.A. | 498,042,299 | 70.03% | 497,617,299 | 69.97% |
| Floating shares | 213,140,770 | 29.97% | 213,565,770 | 30.03% |
| 711,183,069 | 100.0% | 711,183,069 | 100.0% |
In June 2024, Semapa, SGPS, S.A. acquired 425,000 shares representing 0.060% of Navigator's share capital.
As at 30 September 2024 and 31 December 2023, Navigator did not hold any treasury shares.
5.2. Earnings per Share
| 30-09-2024 | 30-09-2023 | |
|---|---|---|
| Profit attributable to Navigator's shareholders (Euro) | 241,444,011 | 200,755,870 |
| Total number of shares issued | 711,183,069 | 711,183,069 |
| Weighted average number of shares | 711,183,069 | 711,183,069 |
| Basic earnings per share (Euro) | 0.339 | 0.282 |
| Diluted earnings per share (Euro) | 0.339 | 0.282 |
5.3. Dividends distributed
Dividends allocated
| Amounts in Euro | Amount approved |
Dividends per share (Euro) |
|---|---|---|
| Allocations in 2024 | ||
| Distribution of retained earnings | 149,995,621 | 0.211 |
| Allocations in 2023 | ||
| Distribution of retained earnings | 199,984,679 | 0.281 |
At the Annual Shareholders' Meeting of 24 May 2024, The Navigator Company, S.A. decided to distribute dividends in the amount of Euro 149,995,621.
At the Annual Shareholders' Meeting of 17 May 2023, The Navigator Company, S.A. decided to distribute dividends in the amount of Euro 199,984,679.
5.4. Non-controlling interests
Detail of non-controlling interests, by subsidiary
| % | Equity | Net profit | |||
|---|---|---|---|---|---|
| Amounts in Euro | held | 30-09-2024 | 31-12-2023 | 30-09-2024 | 30-09-2023 |
| Raiz - Instituto de Investigação da Floresta e Papel | 3.0% | 347,165 | 327,018 | 21,166 | 36,308 |
| Portucel Moçambique | i)- | - | - | - | |
| 347,165 | 327,018 | 21,166 | 36,308 |
Non-controlling interests are related to RAÍZ – Instituto de Investigação da Florestal e Papel, in which the Group holds 97% of the capital and voting rights. The remaining 3% are owned by external associates.
In the current period, the Group considered that the put option on the shares of the subsidiary Portucel Moçambique, S.A. to The Navigator Company, S.A. by IFC – International Finance Corporation was expected to be exercised and recorded the amount of Euro 9,441,850 relating to that transaction under Other reserves.
As at the reporting date, there are no rights of protection of non-controlling interests that significantly restrict the entity's ability to access or use assets and settle liabilities of the Group.
Movements of non-controlling interests
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Opening balance | 327,018 | 297,977 |
| Net profit for the period | 21,166 | 25,322 |
| Other comprehensive income | (1,018) | 3,719 |
| Closing balance | 347,165 | 327,018 |
5.5. Interest-bearing liabilities
| 30-09-2024 | 31-12-2023 | |||
|---|---|---|---|---|
| Amounts in Euro | Non-current | Current | Total | Non-current Current Total |
| Bond loans | 435,000,000 | 62,500,000 | 497,500,000 | 397,500,000 22,500,000 420,000,000 |
| Commercial paper | 35,000,000 | 35,000,000 | 70,000,000 | 70,000,000 35,000,000 105,000,000 |
| Bank loans | 79,940,476 | 37,276,311 | 117,216,787 | 71,972,222 34,539,683 106,511,905 |
| Charges with bond issuances | (2,732,294) | - | (2,732,294) | (2,614,750) (2,614,750) - |
| Refundable grants | 19,345,582 | 7,219,439 | 26,565,021 | 23,227,869 7,219,439 30,447,308 |
| Debt securities and bank debt | 566,553,764 | 141,995,750 | 708,549,514 | 560,085,341 99,259,122 659,344,463 |
| Average interest rate, considering charges for annual fees and hedging operations |
2.3% | 2.0% |
During the nine-month period ended 30 September 2024, the development of financing was determined by:
-
The repayments inherent in the contracted debt, resulting from the amortisation of bank loans, bond loans and commercial paper;
-
The contracting and utilisation of a new long-term bank loan and the issue of 2 bond loans, maturing in 2029 and 2031.
-
The inclusion of debt originating from the Navigator Tissue Uk Group (formerly the Accrol Group).
Interest-bearing liabilities - details
30-09-2024
| Outstanding | ||||||
|---|---|---|---|---|---|---|
| Amounts in Euro | Amount | amount | Maturity | Interest rate | Current | Non-current |
| Bond loans | ||||||
| Navigator 2022-2028 ESG | 150,000,000 | 150,000,000 | June 2028 | Variable rate indexed to Euribor, with fixed rate swap | 50,000,000 | 100,000,000 |
| Navigator 2019-2026 | 50,000,000 | 50,000,000 | January 2026 | Fixed rate | - | 50,000,000 |
| Navigator 2019-2025 | 10,000,000 | 10,000,000 | March 2025 | Variable rate indexed to Euribor, with fixed rate swap | 10,000,000 | - |
| Navigator 2021-2026 | 12,500,000 | 12,500,000 | April 2026 | Variable rate indexed to Euribor | 2,500,000 | 10,000,000 |
| Navigator 2020-2026 | 75,000,000 | 75,000,000 | December 2026 | Variable rate indexed to Euribor, with fixed rate swap | - | 75,000,000 |
| Navigator 2021-2026 ESG | 100,000,000 | 100,000,000 | August 2026 | Variable rate indexed to Euribor, with fixed rate swap | - | 100,000,000 |
| Navigator 2024-2029 ESG | 50,000,000 | 50,000,000 | June 2029 | Variable rate indexed to Euribor, with fixed rate swap | - | 50,000,000 |
| Navigator 2024-2031 ESG | 50,000,000 | 50,000,000 | June 2031 | Variable rate indexed to Euribor, with fixed rate swap | - | 50,000,000 |
| Navigator SLB 2024-2031 | 50,000,000 | - | October 2031 | Variable rate indexed to Euribor | - | - |
| Navigator 2024-2031 SLB | 100,000,000 | - | May 2031 | Variable rate indexed to Euribor | - | - |
| Fees | - | (2,732,294) | (2,732,294) | |||
| European Investment Bank (EIB) | ||||||
| EIB Loan - Energy | 3,541,667 | 3,541,667 | December 2024 | Variable rate indexed to Euribor | 3,541,667 | - |
| EIB Loan - Cacia | 11,111,111 | 11,111,111 | May 2028 | Fixed rate | 2,777,778 | 8,333,333 |
| EIB Loan - Figueira | 25,714,285 | 25,714,285 | February 2029 | Fixed rate | 5,714,285 | 20,000,000 |
| EIB Loan - Biomass Boiler (ESG) | 25,535,714 | 25,535,714 | March 2031 | Fixed rate | 3,928,571 | 21,607,143 |
| EIB Loan | 115,000,000 | - | up to 12 years after disbursement |
Indexed rate to BEI cost of funds at disbursement | - | - |
| Commercial Paper Programme | ||||||
| Commercial Paper Programme 175M | 70,000,000 | 70,000,000 | February 2026 | Fixed rate | 35,000,000 | 35,000,000 |
| Commercial Paper Programme 65M ESG | 19,500,000 | - | February 2026 | Variable rate indexed to Euribor | - | - |
| Commercial Paper Programme 75M | 75,000,000 | - | January 2026 | Variable rate indexed to Euribor | - | - |
| Commercial Paper Programme 50M | 50,000,000 | - | December 2025 | Variable rate indexed to Euribor | - | - |
| Commercial Paper Programme 50M | 50,000,000 | - | June 2026 | Variable rate indexed to Euribor | - | - |
| Loans | ||||||
| Long-term loan (ESG) | 55,000,000 | 30,000,000 | March 2031 | Variable rate indexed to Euribor | - | 30,000,000 |
| Accrol | 21,314,010 | 21,314,010 | 21,314,010 | - | ||
| Repayable grants | ||||||
| AICEP / Other | 26,565,021 | 26,565,021 | November 2027 | 7,219,439 | 19,345,582 | |
| Bank credit facilities | ||||||
| Short-term facility 20M | 20,450,714 | - | - | - | ||
| 1,216,232,522 | 708,549,514 | 141,995,750 | 566,553,764 |
31-12-2023
| Outstanding | ||||||
|---|---|---|---|---|---|---|
| Amounts in Euro | Amount | amount | Maturity | Interest rate | Current | Non-current |
| Bond loans | ||||||
| Navigator 2022-2028 ESG | 150,000,000 | 150,000,000 | June 2028 | Variable rate indexed to Euribor, with fixed rate swap | - | 150,000,000 |
| Navigator 2019-2026 | 50,000,000 | 50,000,000 | January 2026 | Fixed rate | - | 50,000,000 |
| Navigator 2019-2025 | 30,000,000 | 30,000,000 | March 2025 | Variable rate indexed to Euribor, with fixed rate swap | 20,000,000 | 10,000,000 |
| Navigator 2021-2026 | 15,000,000 | 15,000,000 | April 2026 | Variable rate indexed to Euribor | 2,500,000 | 12,500,000 |
| Navigator 2020-2026 | 75,000,000 | 75,000,000 | December 2026 | Variable rate indexed to Euribor, with fixed rate swap | - | 75,000,000 |
| Navigator 2021-2026 ESG | 100,000,000 | 100,000,000 | August 2026 | Variable rate indexed to Euribor, with fixed rate swap | - | 100,000,000 |
| Commissions | - | (2,614,750) | - | (2,614,750) | ||
| European Investment Bank (EIB) | ||||||
| EIB Loan - Energy | 10,625,000 | 7,083,333 | December 2024 | Variable rate indexed to Euribor | 7,083,333 | - |
| EIB Loan - Cacia | 13,888,889 | 12,500,000 | May 2028 | Fixed rate | 2,777,778 | 9,722,222 |
| EIB Loan - Figueira | 31,428,571 | 31,428,571 | February 2029 | Fixed rate | 5,714,286 | 25,714,286 |
| EIB Loan - Biomass Boiler | 27,500,000 | 27,500,000 | March 2031 | Fixed rate | 1,964,286 | 25,535,714 |
| EIB Loan | 115,000,000 | - | up to 12 years after disbursement |
Indexed rate to BEI cost of funds at disbursement | - | - |
| Commercial Paper Programme | ||||||
| Commercial Paper Programme 175M | 105,000,000 | 105,000,000 | February 2026 | Fixed rate | 35,000,000 | 70,000,000 |
| Commercial Paper Programme 65M ESG | 42,250,000 | - | February 2026 | Variable rate indexed to Euribor | - | - |
| Commercial Paper Programme 75M | 75,000,000 | - | January 2026 | Variable rate indexed to Euribor | - | - |
| Commercial Paper Programme 50M | 50,000,000 | - | December 2025 | Variable rate indexed to Euribor | - | - |
| Loans | ||||||
| Long-term investment | 13,000,000 | 13,000,000 | March 2026 | Variable rate indexed to Euribor | 2,000,000 | 11,000,000 |
| Refundable grants | ||||||
| AICEP | 30,447,309 | 30,447,309 | November 2027 | Fixed rate | 7,219,439 | 23,227,870 |
| Bank credit facilities | ||||||
| Short-term facility 20M | 20,450,714 | 15,000,000 | 15,000,000 | - | ||
| 954,590,483 | 659,344,463 | 99,259,122 | 560,085,341 |
As at 30 September 2024, the average cost of debt, considering interest rate, the annual fees and hedging operations, was 2.3% (31 December 2023: 2%).
As at 30 September 2024, the Group had 57% of its financing associated with the compliance with sustainability commitments or the financing of assets previously considered ESG (31 December 2023: 42%).
The repayment terms for the balance recognised under non-current financing obtained are detailed as follows:
| Non-current loans | ||||
|---|---|---|---|---|
| Amounts in Euro | 30-09-2024 | 31-12-2023 | ||
| Non-current | ||||
| 1 to 2 years | 152,140,074 | 156,640,074 | ||
| 2 to 3 years | 157,140,074 | 261,140,074 | ||
| 3 to 4 years | 116,030,355 | 19,640,074 | ||
| 4 to 5 years | 56,785,714 | 112,601,298 | ||
| More than 5 years | 87,189,841 | 12,678,571 | ||
| 569,286,058 | 562,700,091 | |||
| Commissions | (2,732,294) | (2,614,750) | ||
| 566,553,764 | 560,085,341 |
As at 30 September 2024, the Group had contracted Commercial Paper Programs, contracted and undisbursed long-term financing, as well as available and undrawn credit facilities of Euro 504,950,714 (31 December 2023: Euro 287,700,714).
As at 30 September 2024 and 31 December 2023, the Group's interest-bearing net debt was as follows:
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Interest-bearing liabilities | 708,549,514 | 659,344,463 |
| Cash and cash equivalents (Note 5.7) | (65,359,479) | (169,464,967) |
| Interest-bearing net debt | 643,190,035 | 489,879,496 |
| Lease liabilities (Note 5.6) | 113,193,803 | 69,996,821 |
| Interest-bearing net debt with lease liabilities | 756,383,838 | 559,876,317 |
Movements in liabilities of the Group's financing activities
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Balance as at 1 January | 659,344,463 | 725,301,722 |
| Payment of interest-bearing liabilities | (117,050,173) | (107,276,122) |
| Receipts from interest-bearing liabilities | 151,314,010 | 15,000,000 |
| Repayable grants | (3,882,288) | (7,219,438) |
| Change in borrowing costs | (117,544) | 865,333 |
| Change in the perimeter | 18,941,046 | 32,672,968 |
| Change in Interest-bearing debt | 49,205,051 | (65,957,259) |
| Gross interest-bearing debt | 708,549,514 | 659,344,463 |
The amount relating to repayable grants includes the amount of Euro 272,568 relating to the updating of the Net Present Value of the AICEP grant awarded to Navigator Tissue Aveiro,SA.
5.6. Lease liabilities
Lease liabilities – Nature
| 30-09-2024 | 31-12-2023 | |||||
|---|---|---|---|---|---|---|
| Amounts in Euro | Non-current | Current | Total | Non-current | Current | Total |
| Forestry lands | 56,762,123 | 3,485,862 | 60,247,985 | 55,314,521 | 3,183,910 | 58,498,431 |
| Buildings | 34,427,067 | 3,602,886 | 38,029,953 | 1,374,377 | 540,140 | 1,914,517 |
| Vehicles | 4,618,772 | 2,146,926 | 6,765,698 | 3,815,266 | 1,580,224 | 5,395,490 |
| Software licenses | - | 18,631 | 18,631 | - | 94,312 | 94,312 |
| Other lease liabilities | 5,271,724 | 2,859,812 | 8,131,536 | 2,344,597 | 1,749,474 | 4,094,071 |
| 101,079,686 | 12,114,117 | 113,193,803 | 62,848,761 | 7,148,060 | 69,996,821 |
Lease liabilities – Movements
| 30-09-2024 | 31-12-2023 |
|---|---|
| 69,996,821 | 61,641,049 |
| 45,660,883 | - |
| (12,170,998) | (10,694,178) |
| 7,360,453 | 16,003,677 |
| 2,691,231 | 2,517,826 |
| 775,094 | - |
| (1,119,681) | 528,447 |
| 43,196,982 | 8,355,772 |
| 113,193,803 | 69,996,821 |
Lease liabilities – Future liabilities
| 30-09-2024 | 31-12-2023 | ||||||
|---|---|---|---|---|---|---|---|
| Amounts in Euro | Maturing rents | Interest on liabilities |
Present value of liabilities |
Maturing rents | Interest on liabilities |
Present value of liabilities |
|
| Less than 1 year | 7,839,375 | 4,274,742 | 12,114,117 | 4,716,806 | 2,431,254 | 7,148,060 | |
| 1 to 2 years | 8,556,070 | 3,764,503 | 12,320,573 | 3,897,834 | 2,229,000 | 6,126,834 | |
| 2 to 3 years | 8,058,973 | 3,285,011 | 11,343,984 | 3,567,730 | 2,044,103 | 5,611,833 | |
| 3 to 4 years | 6,035,670 | 2,910,317 | 8,945,987 | 2,949,250 | 1,867,883 | 4,817,133 | |
| 4 to 5 years | 4,703,000 | 2,597,484 | 7,300,484 | 2,431,219 | 1,711,124 | 4,142,343 | |
| More than 5 years | 47,925,698 | 13,242,960 | 61,168,658 | 30,952,202 | 11,198,416 | 42,150,618 | |
| Present value of liabilities | 83,118,786 | 30,075,017 | 113,193,803 | 48,515,041 | 21,481,780 | 69,996,821 |
For the periods ended 30 September 2024 and 31 December 2023, there were no changes in the liability arising from financing activities, including changes arising from cash flows and/or other changes in lease liabilities.
5.7. Cash and cash equivalents
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Cash | 44,594 | 42,100 |
| Short-term bank deposits | 65,314,885 | 34,422,867 |
| Other short-term investments | - | 135,000,000 |
| 65,359,479 | 169,464,967 |
In 31 December 2023, Other short-terms investments included Euro 135,000,000 of amounts invested by Navigator in a portfolio of short-term, highly liquid deposits and issuers with adequate ratings, which were drawn down in the current period.
As at 30 September 2024 and 31 December 2023, there are no significant balances of cash and cash equivalents that are subject to restrictions on use by the Group.
5.8. Net financial results
| 9 months | 9 months | |
|---|---|---|
| Amounts in Euro | 30-09-2024 | 30-09-2023 |
| Interest paid on debt securities and bank debt | (20,258,904) | (16,967,350) |
| Commissions on loans and expenses with the opening of credit facilities | (2,016,296) | (2,026,865) |
| Interest paid using the effective interest method | (22,275,200) | (18,994,215) |
| Interest paid on lease liabilities | (2,691,231) | (1,807,887) |
| Financial expenses related to the Group's capital structure | (24,966,431) | (20,802,102) |
| Favourable / (Unfavourable) exchange rate differences | - | (1,435,744) |
| Gains / (Losses) on financial instruments – trading derivatives | (27,684) | (2,117,930) |
| Losses on compensatory interest | - | (426,207) |
| Other financial expenses and losses | (868,672) | (680,759) |
| Financial expenses and losses | (25,862,786) | (25,462,742) |
| Interest earned on financial assets at amortised cost | ||
| Favourable exchange rate differences | 3,220,719 3,466,220 |
3,158,707 - |
| Gains on financial instruments - hedging (Note 8.1) | 9,299,455 | 6,611,090 |
| Gains on compensatory interest | 168,232 | - |
| Financial income and gains | 16,154,626 | 9,769,797 |
| Financial profit/(loss) | (9,708,160) | (15,692,945) |
Financial losses amounted to Euro 9,708,160 (30 September 2023: negative Euro 15,692,945), which reflects an improvement of Euro 5,984,785 compared to the same period last year, mainly due to the evolution of foreign exchange results and gains on hedging derivatives.
Financing costs rose slightly, with the average financing rate remaining at a competitive level, benefiting from the policy of hedging interest rate risk.
The results of financial investments remained at a similar level to the same period last year, as a result of the optimisation of the management of excess cash and cash equivalents.
6. Income tax
6.1. Income tax for the period
6.1.1. Income tax recognised in the consolidated income statement
| 9 months | 9 months | |
|---|---|---|
| Amounts in Euro | 30-09-2024 | 30-09-2023 |
| Current tax | 90,266,946 | 67,886,725 |
| Change in uncertain tax positions in the period | (14,666,602) | (7,072,020) |
| Deferred tax (Note 6.2) | (10,139,284) | 307,109 |
| 65,461,060 | 61,121,814 |
As at 30 September 2024, current tax includes Euro 80,451,865 (30 September 2023: Euro 62,144,517) regarding the liability created under the aggregated income tax regime of The Navigator Company, S.A. in Portugal and Euro 6,706,951 in Spain.
As at 30 September 2024 and 2023, the caption Change in uncertain tax positions in the period reflects the excess/insufficiency of tax estimates, the favourable outcome of some cases related to matters with high uncertainty, as well as requests for binding information, claims to the Tax Authorities and jurisprudence of the courts.
There have not been, nor are any expected changes arising from variations in the rate used to determine the expected tax amount.
Nominal Tax Rate
In the periods presented, the Group considers a nominal tax rate in Portugal of 27.5%, resulting from the tax legislation as follows:
| 30-09-2024 | 30-09-2023 | |
|---|---|---|
| Portugal | ||
| Nominal income tax rate | 21.0% | 21.0% |
| Municipal surcharge | 1.5% | 1.5% |
| 22.5% | 22.5% | |
| State surcharge - on the share of taxable profits between Euro 1,500,000 and Euro 7,500,000 |
3.0% | 3.0% |
| State surcharge - on the share of taxable profits between Euro 7,500,000 and Euro 35,000,000 |
5.0% | 5.0% |
| State surcharge – on taxable income above Euro 35,000,000 | 9.0% | 9.0% |
Reconciliation of the effective income tax rate for the period
| 9 months | 9 months | |
|---|---|---|
| Amounts in Euro | 30-09-2024 | 30-09-2023 |
| Profit before income tax | 306,926,237 | 261,913,992 |
| Expected tax at nominal rate (21%) | 64,454,510 | 55,001,938 |
| Municipal surcharge (2024: 1.47% ; 2023: 1.39%) | 4,511,985 | 3,636,129 |
| State surchargel(2024; 4.70% ; 2023: 4.15%) | 14,429,911 | 10,862,811 |
| Income tax resulting from the applicable tax rate | 83,396,406 | 69,500,879 |
| Nominal tax rate for the period | 27.2% | 26.5% |
| Differences (a) | (4,620,711) | (107,764) |
| Excess of income tax estimate | (13,152,706) | (7,157,543) |
| Tax benefits | (510,721) | (1,432,533) |
| Autonomous taxation | 348,792 | 318,775 |
| 65,461,060 | 61,121,814 | |
| Effective tax rate | 21.3% | 23.3% |
(a) This amount concerns mainly:
| 30-09-2024 | 30-09-2023 | |
|---|---|---|
| Capital gains/ (losses) for tax purposes | 1,939,704 | 5,977 |
| Capital gains/ (losses) for accounting purposes | (2,140,024) | (8,698) |
| Taxable provisions and impairment | (815,867) | (1,274,198) |
| Tax benefits | (8,611,285) | (402,359) |
| Post-employment benefits | 6,506 | 65,755 |
| IFRS 16 | (5,755,079) | - |
| Other | (1,426,541) | 1,221,654 |
| (16,802,586) | (391,869) | |
| Tax effect (27.5%) | (4,620,711) | (107,764) |
6.1.2. Income tax recognised in the consolidated statement of financial position
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Assets | ||
| Amounts pending repayment | 24,605,327 | 18,385,534 |
| 24,605,327 | 18,385,534 | |
| Liabilities | ||
| Corporate Income Tax - IRC | 51,466,548 | 4,727,342 |
| Additional tax liabilities (IRC) | 16,994,901 | 18,100,389 |
| 68,461,449 | 22,827,731 |
Detail of Corporate Income Tax - IRC (net)
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Income tax for the period | 90,266,946 | 83,576,447 |
| Payments on account, special and additional payments on account | (42,652,811) | (75,943,340) |
| Withholding tax recoverable | (1,532,547) | (1,798,031) |
| Corporate Income Tax payable / (repayable) from previous periods | 7,100,892 | - |
| Other payables / (receivables) | (1,715,932) | (1,107,734) |
| 51,466,548 | 4,727,342 |
The amounts of corporate income tax paid in the period are detailed as follows:
| Amounts in Euro | 30-09-2024 | 30-09-2023 |
|---|---|---|
| Payment / (Repayment) of corporate income tax for the previous period | (8,890,534) | 84,783,823 |
| Payments on account, special and additional payments on account | 42,652,811 | 35,844,452 |
| Withholding tax | 1,532,547 | 1,269,066 |
| Repayments of tax proceedings decided in favour of the group | - | (412,897) |
| Payments of additional tax liabilities | - | 32,740 |
| Other income tax payments / (repayments) | - | (829) |
| Income tax paid / (received) | 35,294,824 | 121,516,355 |
Amounts pending repayment
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| 2005 Corporate Income Tax (RETGS) – Proceeding 1259/ 09.3BESNT | 13,886,728 | 13,886,728 |
| 2018 Corporate Income tax (RETGS) – CAAD Proceeding 103/2023 | 1,749,389 | 1,749,389 |
| RFAI 2012 - Default interest | 494,856 | 494,856 |
| 2016 Corporate Income Tax – Navigator Tissue Rodão – CAAD Proceeding 575/2020 | 861,866 | 861,866 |
| 2017 Corporate income tax – CAAD Proceeding 756/2022 | 1,379,125 | 1,379,125 |
| IRC 2015-I - Proc. n.º 21/22.2BALSB | 6,219,793 | - |
| Other | 13,570 | 13,570 |
| 24,605,327 | 18,385,534 |
The movements in the period are detailed as follows:
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Balance at the beginning of the period | 18,385,534 | 16,216,543 |
| Increases | 6,219,793 | 3,142,084 |
| Payments / (receipts) | - | (335,564) |
| Reversals | - | (637,529) |
| 24,605,327 | 18,385,534 |
Uncertain tax positions- Liabilities
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Balance at the beginning of the period | 18,100,389 | 14,762,361 |
| Increases | 5,821,753 | 6,276,135 |
| Payments / (receipts) | - | 222,634 |
| Transfer | (6,451,126) | - |
| Reversals | (476,115) | (3,160,741) |
| Changes in the period | (1,105,488) | 3,338,028 |
| 16,994,901 | 18,100,389 |
Taxes paid in litigation
As at 30 September 2024 and 31 December 2023, the additional tax assessments that are already paid and contested, not recognised in assets, refer to the Navigator Group and are summarised as follows:
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Aggregate Corporate Income Tax 2005 (Note 9.3) - Proceeding 88/13.4BEALM | - | 10,394,386 |
| Aggregate Corporate Income Tax 2006 - Proceeding 909/11.6 BEALM | 8,150,146 | 8,150,146 |
| Aggregate Corporate Income Tax 2018 - Proceeding 103/2023 and 648/23.5BEALM | 11,138,180 | 11,138,180 |
| 2015 Corporate Income Tax - Navigator Tissue Ródão, S.A. - Proceeding 235/23.8BECTB | 7,586,361 | 7,586,361 |
| State Surcharge 2015 II - Proceeding 453/23.9BEALM | 6,970,541 | 6,970,541 |
| State Surcharge 2016 - Proceeding 457/21.6BEALM | 3,761,397 | 3,761,397 |
| State Surcharge 2017 - Proceeding 456/21.8BEALM | 8,462,724 | 8,462,724 |
| State Surcharge 2018 - Proceeding 707/21.9 BEALM | 12,223,705 | 12,223,705 |
| State Surcharge 2019 - Proceeding 557/23.8BEALM | 2,466,974 | 2,466,974 |
| State Surcharge 2020 - Proceeding 26/24.9BEALM | 5,183,000 | 5,183,000 |
| State Surcharge 2021 - Administrative Appeal | 6,154,906 | - |
| 72,097,934 | 76,337,414 |
6.2. Deferred taxes
Movements in deferred taxes
| As at 1 | Income Statement | As at 30 | ||||||
|---|---|---|---|---|---|---|---|---|
| January | Changes in the | Exchange rate | September | |||||
| Amounts in Euro | 2024 | perimeter | Increases | Decreases | Equity | adjustment | Adjustments | 2024 |
| Temporary differences originating deferred tax assets | ||||||||
| Taxed provisions and impairments | 16,674,924 | - | 4,697,255 | (2,589,933) | - | - | - | 18,782,246 |
| Adjustment of property, plant and equipment | 32,384,050 | - | 2,266,770 | (13,181,798) | - | - | - | 21,469,022 |
| Deferred accounting gains on intra-group transactions | 11,750,244 | - | 19,398,899 | - | - | - | - | 31,149,143 |
| Appreciation of biological assets | 24,904,297 | - | - | (1,035,146) | - | - | 23,869,151 | |
| Conventional capital remuneration | 280,000 | - | - | (280,000) | - | - | - | - |
| Tax losses | 52,846 | 56,496,588 | 12,311,018 | (8,706,165) | - | 1,092,253 | - | 61,246,540 |
| Lease liabilities relating to right-of-use assets | - | - | 71,254,226 | - | - | - | - | 71,254,226 |
| Other temporary differences | - | 352,600 | - | - | - | 6,487 | - | 359,087 |
| 86,046,361 | 56,849,188 109,928,168 (25,793,042) | - | 1,098,740 | - | 228,129,415 | |||
| Temporary differences originating deferred tax liabilities | ||||||||
| Pensions and other post-employment benefits | (795,430) | - | (4,581) | 15,267 | (345,911) | - | - | (1,130,655) |
| Financial instruments | (18,072,331) | - | - | - | (6,759,473) | - | - | (24,831,804) |
| Appreciation of biological assets | (3,519,844) | - | (1,299,410) | - | - | - | - | (4,819,254) |
| Adjustment of property, plant and equipment | (286,279,805) | (54,860,471) | (526,683) | 15,868,586 | - | (989,803) | - | (326,788,176) |
| Fair value calculated in business combinations | (39,840,800) | - | - | 4,713,655 | - | - | (35,127,145) | |
| Government grants | (3,714,470) | - | - | 326,773 | - | - | 387,483 | (3,000,214) |
| Right-of-use assets | - | (65,499,147) | - | - | - | - | (65,499,147) | |
| (352,222,680) | (54,860,471) (67,329,821) 20,924,281 | (7,105,384) | (989,803) | 387,483 | (461,196,395) | |||
| Deferred tax assets | 23,653,501 | 14,212,297 | 29,920,100 | (6,870,808) | - | 274,685 | - | 61,189,775 |
| Deferred tax liabilities | (95,856,013) | (13,715,118) (18,512,594) | 5,602,586 | (1,943,980) | (247,451) | 97,445 | (124,575,125) |
| As at 1 January |
Changes in the | Income Statement | As at 31 December |
|||
|---|---|---|---|---|---|---|
| Amounts in Euro | 2023 | perimeter | Increases | Decreases | Equity | 2023 |
| Temporary differences originating deferred tax assets | ||||||
| Taxed provisions | 13,913,990 | - | 3,358,291 | (597,357) | - | 16,674,924 |
| Adjustment of property, plant and equipment | 43,767,507 | 317,077 | 8,579,320 | (20,279,854) | - | 32,384,050 |
| Deferred accounting gains on intra-group transactions | 26,228,453 | - | 1,561,458 | (16,039,667) | - | 11,750,244 |
| Appreciation of biological assets | 14,456,082 | - | 10,448,215 | - | - | 24,904,297 |
| Conventional capital remuneration | 560,000 | - | - | (280,000) | - | 280,000 |
| Tax losses | - | 52,846 | - | - | - | 52,846 |
| 98,926,032 | 369,923 | 23,947,284 (37,196,878) | - | 86,046,361 | ||
| Temporary differences originating deferred tax liabilities | ||||||
| Pensions and other post-employment benefits | (358,483) | - | (34,476) | 17,172 | (419,643) | (795,430) |
| Financial instruments | (47,174,485) | - | - | - | 29,102,154 | (18,072,331) |
| Appreciation of biological assets | (5,403,744) | - | - | 1,883,900 | - | (3,519,844) |
| Adjustment of property, plant and equipment | (300,707,813) | (3,606) | (4,124,908) | 18,556,522 | - | (286,279,805) |
| Fair value calculated in business combinations | - | (39,840,800) | - | - | - | (39,840,800) |
| Government grants | (3,862,494) | (646,777) | - | 462,851 | 331,950 | (3,714,470) |
| (357,507,019) | (40,491,183) | (4,159,384) 20,920,445 | 29,014,461 | (352,222,680) | ||
| Deferred tax assets | 27,204,659 | 6,585,503 (10,229,142) | - | 23,653,501 | ||
| Deferred tax liabilities | (98,314,430) | (10,122,796) | (1,143,770) | 5,753,122 | 7,971,861 | (95,856,013) |
As at 30 September 2024 and 31 December 2023, the rate of 27.50% was used in the measurement of deferred taxes.
7. Payroll
7.1. Payroll costs
| 9 months | 9 months | |
|---|---|---|
| Amounts in Euro | 30-09-2024 | 30-09-2023 |
| Remuneration of Corporate Bodies – fixed (Note 7.3) | 2,510,310 | 2,719,893 |
| Remuneration of Corporate Bodies – variable | 2,873,615 | 1,803,170 |
| Other remuneration | 112,653,210 | 97,988,020 |
| Social Security contributions | 21,326,010 | 19,700,922 |
| Post-employment benefits (Note 7.2.4) | 1,143,401 | 1,052,141 |
| Other payroll costs | 12,465,375 | 4,924,971 |
| Payroll costs | 152,971,921 | 128,189,117 |
Navigator's good performance in the first 9 months of the year made it possible to reinforce the increase in remuneration, the estimate of employee bonuses and the productivity bonus. It should be noted that, by resolution of the Shareholders' Meeting of 17 May 2023, the remuneration of the Corporate Bodies will now be paid 12 times a year instead of 14.
Overall, the increase in payroll costs is due to the acquisition of the Navigator Tissue Uk Group in May 2024, with an impact as at 30 September of Euro 8,849,974, and to the costs with the rejuvenation programme.
Number of employees by segment at the end of the period
| Variation | |||
|---|---|---|---|
| 30-09-2024 | 31-12-2023 | 24/23 | |
| Market Pulp | 293 | 272 | 21 |
| UWF | 1,803 | 1,808 | (5) |
| Tissue | 1,038 | 586 | 452 |
| Corporate | 823 | 801 | 22 |
| 3,957 | 3,467 | 490 |
The number of employees includes 436 new employees assigned to the acquisition of the tissue business in the UK.
7.2. Employee benefits
7.2.1. Introduction
Some Group companies grant their Employees post-retirement benefits, either in the form of defined benefit plans or in the form of defined contribution plans.
The plans are funded through a closed Pension Fund, managed by an external entity, which subcontracts the management of its assets to external asset management entities.
A. Pension Plan – Defined benefit
The Group has responsibilities with post-employment benefit plans for a reduced group of Employees who have chosen to maintain the Defined Benefit Plan (The Navigator Company) or who have chosen to maintain a Safeguard Clause, the latter following the conversion of their plan into a Defined Contribution Plan (The Navigator Company). In effect, the safeguard clause gives the Employee the option, at the time of retirement, to pay a pension in accordance with the provisions laid down on the Defined Benefit Plan. For those who choose to activate the Safeguard Clause, the accumulated balance in the Defined Contribution Plan (Conta 1) will be used to finance the liability of the Defined Benefit Plan.
B. Pension Plan – Defined contribution
As at 30 September 2024, three Defined Contribution plans were in force covering 3,246 employees (2023: 3,200 Employees) (Note 7.2.3).
7.2.2. Defined benefit plan
Net Liabilities
Net liabilities reflected in the consolidated statement of financial position and the number of beneficiaries of the defined benefit plans in force in the Group are detailed as follows:
| 31-12-2023 | |||||
|---|---|---|---|---|---|
| Amounts in Euro | No. of Beneficiaries |
Amount | No. of Beneficiaries |
Amount | |
| Past service liabilities | |||||
| Active employees, including individual accounts | 311 | 44,872,333 | 352 | 50,509,668 | |
| Alumni | 130 | 21,098,324 | 112 | 17,469,425 | |
| Retired employees | 640 | 94,871,311 | 622 | 90,277,782 | |
| Market value of pension funds | (162,723,058) | (159,034,022) | |||
| Total net liabilities | 1,081 | (1,881,090) | 1,086 | (777,147) |
Changes in liabilities with defined benefit plans
| 30-09-2024 | ||||||
|---|---|---|---|---|---|---|
| Opening | Current service | Interest | Actuarial | Payments | ||
| Amounts in Euro | balance | cost | expenses | deviations | performed Closing balance | |
| Pensions with autonomous fund | 158,256,875 | 10,051 | 2,712,551 | 3,126,331 | (3,263,840) | 160,841,968 |
| 158,256,875 | 10,051 | 2,712,551 | 3,126,331 | (3,263,840) | 160,841,968 |
| 31-12-2023 | |||||||
|---|---|---|---|---|---|---|---|
| Opening | Current service | Interest | Actuarial | Payments | |||
| Amounts in Euro | balance | cost | expenses | deviations | performed Closing balance | ||
| Pensions with autonomous fund | 157,269,646 | 18,878 | 5,398,760 | 2,467,179 | (6,897,588) | 158,256,875 | |
| 157,269,646 | 18,878 | 5,398,760 | 2,467,179 | (6,897,588) | 158,256,875 |
The average expected duration of the defined benefit liabilities is 13 years (2023: 13 years).
Funds
Funds allocated to the defined benefit pension plans - evolution
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Opening balance | 159,034,022 | 154,433,916 |
| Expected income for the period | 2,720,677 | 5,291,759 |
| Remeasurement | 4,232,199 | 6,205,945 |
| Pensions paid | (3,263,840) | (6,897,598) |
| Closing balance | 162,723,058 | 159,034,022 |
The assets of the pension fund related to the defined benefit plan are under the management of Ageas Pensões, Schroders, Santander AM and Julius Baer, as detailed below:
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Defined benefits and Conta 1: | ||
| AGEAS - Pensões | (63,413) | (17,192) |
| Schroders | 56,468,631 | 64,806,718 |
| Santander AM | 57,237,273 | 65,605,927 |
| Julius Baer | 49,080,567 | 28,638,569 |
| Total Defined Benefits and Conta 1 | 162,723,058 | 159,034,022 |
Funds allocated to defined benefit plans - composition of assets
| Amounts in Euro | 30-09-2024 | % | 31-12-2023 | % |
|---|---|---|---|---|
| Securities listed in the market | ||||
| Bonds | 99,641,343 | 60.35% | 96,701,081 | 60.81% |
| Shares | 40,770,059 | 26.17% | 38,457,610 | 24.18% |
| Public debt | 16,144,741 | 10.20% | 17,419,598 | 10.95% |
| Liquidity | 1,513,995 | 0.78% | 2,206,803 | 1.39% |
| Other short-term investments | 4,652,920 | 2.50% | 4,248,930 | 2.67% |
| 162,723,058 | 100.00% | 159,034,022 | 100.00% |
The assets of the pension fund do not include any assets of the Group.
7.2.3. Defined contributions plan
As at 30 September 2024 and 31 December 2023, three defined contribution plans were in force on behalf of Employees.
The assets of the pension fund that finance the defined contribution plans are under the management of Ageas, as detailed below:
| No. of | ||||
|---|---|---|---|---|
| Amounts in Euro | Beneficiaries | Profitability % | 30-09-2024 | 31-12-2023 |
| Defined Contribution (Ageas Pensões): | ||||
| Defensive sub-fund | 125 | 3.08% | 6,191,740 | 6,262,270 |
| Conservative sub-fund | 414 | 4.63% | 15,778,250 | 15,291,344 |
| Dynamic sub-fund | 770 | 7.41% | 15,708,243 | 15,713,487 |
| Aggressive sub-fund | 1,937 | 9.75% | 6,875,819 | 6,398,935 |
| Total defined contribution | 3,246 | 44,554,052 | 43,666,036 |
7.2.4. Expenses incurred with post-employment benefit plans
The effect in the income statement for the periods ended 30 September 2024 and 2023 was as follows:
| 30-09-2024 | 30-09-2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| Amounts in Euro | Current services cost |
Net interest | Defined contribution - Contributions for the period |
Impact on net profit (Note 7.1) |
Current services cost |
Net interest | Defined contribution - Contributions for the period |
Impact on net profit (Note 7.1) |
| Pensions with autonomous fund | 10,051 | (8,126) | - | 1,925 | 9,439 | 53,500 | 62,939 | |
| Defined contributions plans | - | - | 1,141,476 | 1,141,476 | - | - | 989,202 | 989,202 |
| 10,051 | (8,126) | 1,141,476 | 1,143,401 | 9,439 | 53,500 | 989,202 | 1,052,141 |
8. Financial instruments
8.1. Derivative financial instruments
Movements in derivative financial instruments
| 30-09-2024 | 31-12-2023 | ||||||
|---|---|---|---|---|---|---|---|
| Amounts in Euro | Trading derivatives |
Hedging derivatives |
Net total | Trading derivatives |
Hedging derivatives |
Net total | |
| Balance at the beginning of the period | (4,068,868) | 17,835,988 | 13,767,121 | (3,106,233) | 46,938,143 | 43,831,911 | |
| New contracts / settlements | 4,972,440 | (9,313,247) | (4,340,807) | (1,999) | (9,722,524) | (9,724,524) | |
| Change in fair value through profit or loss (Note 5.8) | (27,684) | 9,299,455 | 9,271,771 | (960,636) | 9,722,523 | 8,761,887 | |
| Change in fair value through other comprehensive income | - | 6,773,266 | 6,773,266 | - | (29,102,154) | (29,102,154) | |
| Balance at the end of the period | 875,888 | 24,595,462 | 25,471,350 | (4,068,868) | 17,835,988 | 13,767,121 |
8.2.1. Detail and maturity of derivative financial instruments by nature
| 30-09-2024 | ||||||
|---|---|---|---|---|---|---|
| Positive | Negative | |||||
| Amounts in Euro | Notional | Currency | Maturity | (Note 4.2) | (Note 4.3) | Net |
| Hedging | ||||||
| Hedging (future sales) | 101,500,000 | USD | 2024 | 330,513 | (7,364) | 323,149 |
| Hedging (future sales) | 30,900,000 | GBP | 2024 | - | (845,710) | (845,710) |
| Interest rate swaps - Bonds | 435,000,000 | EUR | 2031 | 12,569,629 | (2,827,655) | 9,741,974 |
| Energy | 63,954,556 | EUR | 2025 | 16,363,362 | - | 16,363,362 |
| BHKP pulp | 19,146,000 | USD | 2024 | - | (987,313) | (987,313) |
| 29,263,504 | (4,668,042) | 24,595,462 | ||||
| Trading | ||||||
| Foreign exchange forwards (future sales) | 50,000,000 | USD | 2024 | 662,088 | - | 662,088 |
| Foreign exchange forwards (future sales) | 37,500,000 | GBP | 2024 | - | (100,530) | (100,530) |
| Foreign exchange forwards (future sales) | 19,500,000 | GBP | 2024 | 314,330 | - | 314,330 |
| 976,418 | (100,530) | 875,888 | ||||
| 30,239,922 | (4,768,572) | 25,471,350 |
| 31-12-2023 | ||||||
|---|---|---|---|---|---|---|
| Amounts in Euro | Notional | Currency | Maturity | Positive (Note 4.2) |
Negative (Note 4.3) |
Net |
| Hedging | ||||||
| Hedging (future sales) | 287,500,000 | USD | 2024 | 1,348,010 | (608,037) | 739,973 |
| Interest rate swaps - Bonds | 355,000,000 | EUR | 2028 | 17,064,360 | - | 17,064,360 |
| BHKP pulp | 7,092,000 | USD | 2024 | 31,655 | - | 31,655 |
| 18,444,025 | (608,037) | 17,835,988 | ||||
| Trading | ||||||
| Foreign exchange forwards (future sales) | (46,000,000) | USD | 2024 | 1,014,913 | (4,987,262) | (3,972,349) |
| Foreign exchange forwards (future sales) | (6,099,807) | GBP | 2024 | - | (96,519) | (96,519) |
| 1,014,913 | (5,083,781) | (4,068,868) | ||||
| 19,458,938 | (5,691,818) | 13,767,120 |
Cash flow hedge | Exchange rate risk EUR/USD
During the first quarter of 2024, the Group concluded the Zero Cost Collar contracting of the derivative financial instruments which begun in the last quarter of 2023, thus guaranteeing full hedging of the estimated exposure of USD 355,000,000 and GBP 117,500,000 for 2024.
Cash flow hedge | Interest rate
During the second quarter of 2024, the Group contracted two swaps in the amount of Euro 50,000,000 each to fix the interest rate associated with the Navigator 2024-2029 bond loan and the Navigator 2024-2031 bond loan, in the amount of Euro 50,000,000, each, both starting in June 2024. During 2024, amortisations amounting to Euro 20,000,000 were made. The third quarter ended with an interest rate risk hedge in the amount of Euro 435,000,000.
Energy Hedging
In view of the Group's exposure to the electricity and natural gas purchase market, in the first quarter of 2024 the group entered into swaps to fix the purchase price of electricity and natural gas for a volume of approximately 595,411 MWh of electricity and 1,445,112 MWh of natural gas until 31 December 2024.
Similarly, in the first quarter of 2024, the group entered into Swaps to fix the purchase price of electricity and natural gas for a volume of approximately 199,740 MWh of electricity and 581,064 MWh of natural gas, starting in 2025.
Pulp Hedging – BHKP
The Navigator Group uses derivative financial instruments in order to minimise the exposure risk associated with the variation of the pulp price, indexed to PIX, in USD.
During the second quarter of 2023, the Group entered into a Swap valued at USD 7,092,000 to fix the price of short fibre pulp (BHKP) for 2024. Similarly, in the first quarter of 2024, the Group entered into a Swap valued at USD 23,400,000 to fix the sales price of short fibre pulp (BHKP) starting in April 2024 and maturing in December 2024.
9. Provisions, commitments and contingencies
9.1. Provisions
Movements in provisions
| Legal | Other | ||
|---|---|---|---|
| Amounts in Euro | Proceedings | Provisions | Total |
| 1 January 2023 | 5,106,975 | 23,325,900 | 28,432,877 |
| Increases | - | 1,289,652 | 1,289,652 |
| Impact on profit and loss for the period | - | 1,289,652 | 1,289,652 |
| Exchange rate adjustment | - | 1,877 | 1,877 |
| Other transfers and adjustments | - | 402,846 | 402,846 |
| 30 September 2023 | 5,106,974 | 25,020,275 | 30,127,252 |
| Increases | 601,811 | 217,808 | 819,619 |
| Reversals | (25,660) | (1,800,000) | (1,825,660) |
| Impact on profit and loss for the period | 576,151 | (1,582,192) | (1,006,041) |
| Changes in the perimeter | - | 105,854 | 105,854 |
| Other transfers and adjustments | 1,826,208 | (3,215,987) | (1,389,779) |
| 31 December 2023 | 7,509,334 | 20,327,950 | 27,837,286 |
| Increases | 453,016 | - | 453,016 |
| Reversals | (348,114) | - | (348,114) |
| Impact on profit and loss for the period | 104,902 | - | 104,902 |
| Exchange rate adjustment | - | (104) | (104) |
| Other transfers and adjustments | 346,755 | 29,465 | 376,220 |
| 30 September 2024 | 7,960,991 | 20,357,311 | 28,318,304 |
No repayments of any nature are expected in respect of these provisions.
9.2. Commitments
Guarantees provided to third parties
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Guarantees provided | ||
| Navigator guarantees for EIB loans | 16,875,000 | 22,083,333 |
| Ocean Network Express | 2,751,947 | 2,751,947 |
| Comissão Coordenação Desenvolvimento Regional | 354,083 | 354,083 |
| IAPMEI | 447,604 | 1,280,701 |
| Agência Portuguesa Ambiente | 3,337,887 | 2,846,271 |
| Simria | 338,829 | 338,829 |
| Other | 974,390 | 838,256 |
| 34,367,810 | 30,493,420 |
Purchase commitments
| Amounts in Euro | 30-09-2024 | 31-12-2023 |
|---|---|---|
| Purchase commitments | ||
| Property, plant and equipment - Industrial equipment | 116,836,578 | 140,885,321 |
| Energy | 109,277,838 | 125,753,200 |
| Wood | ||
| Commitments to acquisitions in the subsequent period | 63,300,000 | 265,000,000 |
| Commitments to long-term acquisitions | 111,700,000 | 102,600,000 |
| 401,114,416 | 634,238,521 |
In the first half of 2022, the subsidiary Navigator Abastecimento de Madeira, ACE, signed a contract with Portline Ocean Bulk, Inc. for the chartering of vessels for the transportation of timber for the years 2022 to 2024. The contract provides for the transport of approximately 940,000 m3 during this period.
Purchase commitments of an operational nature, which are not reflected in the statement of financial position, include liabilities associated with long-term contracts for the supply of raw materials, products and services within the scope of The Navigator Company's activity. The value of the commitments has been estimated on the basis of the information available at the time, based on the contractual terms and the best information available at the time on the volumes and prices applicable for the remaining period of the contracts.
Other commitments
The Navigator Group has made a commitment to achieve carbon neutrality by 2035, with an estimated global investment of Euro 340 million, of which Euro 196.6 million have already been invested until 30 September 2024 (31 December 2023: Euro 137.6 million).
10.Group structure
10.1. Companies included in the consolidation perimeter
10.1.1. Navigator Group subsidiaries
| Share equity owned (%) | ||||||
|---|---|---|---|---|---|---|
| 30-09-2024 | 31-12-2023 | |||||
| Company | Head Office | |||||
| Direct Indirect | Total | Total | Main activity | |||
| Parent company: The Navigator Company, S.A. |
Portugal | - Sale of paper and pulp | ||||
| Subsidiaries: | - | - | - | |||
| 100,0 Acquisition, operation, lease or concession of the use and disposal of | ||||||
| Navigator Brands , S.A. | Portugal | 100,0 | - | 100,0 | trademarks, patents and other industrial or intellectual property | |
| Navigator Parques Industriais, S.A. | Portugal | 100,0 | - | 100,0 | 100,0 Management of industrial real estate | |
| Navigator Paper Figueira, S.A | Portugal | 100,0 | - | 100,0 | 100,0 Paper production | |
| Empremédia - Corretores de Seguros, S.A. | Portugal | 100,0 | - | 100,0 | 100,0 Insurance mediation and advisory services | |
| Empremedia, DAC | Ireland | 100,0 | - | 100,0 | 100,0 Management of shareholdings | |
| Empremedia RE , DAC | Ireland | - | 100,0 | 100,0 | 100,0 Insurance mediation and advisory services | |
| Raiz - Instituto de Investigação da Floresta e Papel | Portugal | 97,0 | - | 97,0 | 97,0 Applied research in the field of pulp and paper industry and forestry activity |
|
| Enerpulp – Cogeração Energética de Pasta, S.A. | Portugal | 100,0 | - | 100,0 | 100,0 Energy production | |
| Navigator Pulp Figueira, S.A. | Portugal | 100,0 | - | 100,0 | 100,0 Production of cellulose pulp and provision of administration, management | |
| and internal advisory services | ||||||
| Ema Cacia - Engenharia e Manutenção Industrial, ACE | Portugal | - | 73,8 | 73,8 | 73,8 | |
| Ema Setúbal - Engenharia e Manutenção Industrial, ACE | Portugal | - | 79,7 | 79,7 | 79,7 | Provision of industrial maintenance services |
| Ema Figueira da Foz- Engenharia e Manutenção Industrial, ACE | Portugal | - | 80,7 | 80,7 | 80,7 | |
| Navigator Pulp Setúbal, S.A. | Portugal | 100,0 | - | 100,0 | 100,0 Cellulose pulp production | |
| Navigator Pulp Aveiro, S.A. | Portugal | 100,0 | - | 100,0 | 100,0 Cellulose pulp production | |
| Navigator Fiber Solutions , S.A. | Portugal | 0,1 | 99,9 | 100,0 | 100,0 Wholesale and manufacture of packaging and other items made from cellulose pulp, paper and cardboard and related products. |
|
| Navigator Tissue Aveiro, S.A. | Portugal | 100,0 | - | 100,0 | 100,0 | |
| Navigator Tissue Ródão , S.A. | Portugal | - | 100,0 | 100,0 | 100,0 | Tissue paper production |
| Navigator Tissue Iberica , S.A. | Spain | - | 100,0 | 100,0 | 100,0 Sale of tissue paper | |
| Navigator Tissue Ejea, SL | Spain | 100,0 | - | 100,0 | 100,0 Tissue paper production | |
| Navigator Tissue France, EURL | France | - | 100,0 | 100,0 | 100,0 Sale of tissue paper | |
| Portucel Moçambique - Sociedade de Desenvolvimento Florestal e Industrial, Lda | Mozambique | 90,0 | - | 90,0 | 90,0 Forestry production | |
| Navigator Forest Portugal, S.A. | Portugal | 100,0 | - | 100,0 | 100,0 Forestry production | |
| EucaliptusLand, S.A. | Portugal | - | 100,0 | 100,0 | 100,0 Forestry production | |
| Gavião - Sociedade de Caça e Turismo, S.A. | Portugal | - | 100,0 | 100,0 | 100,0 Management of hunting resources | |
| Afocelca - Agrupamento complementar de empresas para protecção contra incêndios, ACE |
Portugal | - | 64,8 | 64,8 | 64,8 Provision of forest fire prevention and fighting services | |
| Viveiros Aliança - Empresa Produtora de Plantas, S.A. | Portugal | - | 100,0 | 100,0 | 100,0 Plant production in nurseries | |
| Bosques do Atlantico, SL | Spain | - | 100,0 | 100,0 | 100,0 Trade in wood and biomass and logging | |
| Navigator Africa, SRL | Italy | - | 100,0 | 100,0 | 100,0 Trade in wood and biomass and logging | |
| Navigator Paper Setúbal , S.A. | Portugal | 100,0 | - | 100,0 | 100,0 Paper and energy production | |
| Navigator North America Inc. | USA | - | 100,0 | 100,0 | 100,0 Sale of paper | |
| Navigator Afrique du Nord | Morocco | - | 100,0 | 100,0 | 100,0 | |
| Navigator España, S.A. | Spain | - | 100,0 | 100,0 | 100,0 | |
| Provision of sales intermediation services | ||||||
| Navigator Netherlands, BV | The Netherlands | - | 100,0 | 100,0 | 100,0 | |
| Navigator France, EURL | France | - | 100,0 | 100,0 | 100,0 | |
| Navigator Paper Company UK, Ltd | United Kingdom | - | 100,0 | 100,0 | 100,0 | |
| Navigator Holding Tissue UK, Ltd (anteriormente designada Accrol Group Holdings plc) |
United Kingdom | - | 100,0 | 100,0 | Holding company | |
| Navigator Corporate UK, ltd (anteriormente designada Accrol UK, ltd) | United Kingdom | - | 100,0 | 100,0 | Holding company | |
| Accrol Holdings, ltd | United Kingdom | - | 100,0 | 100,0 | Holding company | |
| Navigator Tissue UK, ltd (anteriormente designada Accrol Papers, ltd) United Kingdom | - | 100,0 | 100,0 | Tissue paper conversion | ||
| LTC Parent Ltd | United Kingdom | - | 100,0 | 100,0 | Holding company | |
| Leicester Tissue Company ltd | United Kingdom | - | 100,0 | 100,0 | Tissue paper conversion | |
| Art Tissue ltd | United Kingdom | - | 100,0 | 100,0 | Sale of tissue paper | |
| John Dale (Holdings) ltd | United Kingdom | - | 100,0 | 100,0 | Holding company | |
| John Dale, ltd | United Kingdom | - | 100,0 | 100,0 | Tissue paper production | |
| Severn Delta, ltd | United Kingdom | - | 100,0 | 100,0 | Tissue paper production | |
| Navigator Italia, SRL | Italy | - | 100,0 | 100,0 | 100,0 | |
| Navigator Deutschland, GmbH | Germany | - | 100,0 | 100,0 | 100,0 | |
| Navigator Paper Austria, GmbH | Austria | - | 100,0 | 100,0 | 100,0 | |
| Navigator Paper Poland SP Z o o | Poland | - | 100,0 | 100,0 | 100,0 | |
| Navigator Eurasia | Turkey | - | 100,0 | 100,0 | 100,0 | |
| Navigator Paper Mexico | Mexico | 25,0 | 75,0 | 100,0 | 100,0 | Provision of sales intermediation services |
| Navigator Middle East Trading DMCC | Dubai | - | 100,0 | 100,0 | 100,0 | |
| Navigator Egypt, ELLC | Egypt | 1,0 | 99,0 | 100,0 | 100,0 | |
| Navigator Paper Southern Africa | South Africa | 1,0 | 99,0 | 100,0 | 100,0 | |
| Portucel Nigeria Limited | Nigeria | 1,0 | 99,0 | 100,0 | 100,0 | |
| Navigator Green Fuels Setúbal, S.A. | Portugal | 100,0 | 100,0 | 100,0 Production of sustainable fuels | ||
| Navigator Green Fuels Figueira da Foz, S.A. | Portugal | 100,0 | - | 100,0 | 100,0 Production of sustainable fuels | |
| - | ||||||
| Navigator Abastecimento de Madeira, ACE | Portugal | 97,0 | 3,0 | 100,0 | 100,0 Sale of timber |
10.1.2. Jointly controlled operations
| Share equity owned (%) | ||||||
|---|---|---|---|---|---|---|
| 30-09-2024 | 31-12-2023 | |||||
| Company | Head Office | Direct Indirect | Total | Total | Main activity | |
| Pulpchem Logistics, A.C.E. | Portugal | 50.0 | - | 50.0 | 50.0 Purchases of materials, subsidiary materials and services used in the pulp and paper production processes |
10.2. Changes in the consolidation perimeter
During the period ended 30 September 2024, the consolidation perimeter was changed from the previous period by the acquisition of the Navigator Tissue Uk Group, formerly Accrol Group, as follows:
2024
| - Acquisition of Navigator Holding Tissue UK, Ltd (formerly Accrol Group Holdings plc) |
|---|
| - Acquisition of Navigator Corporate UK, ltd (formerly Accrol uk, ltd) |
| - Acquisition of Accrol Holdings, ltd |
| - Acquisition of Navigator Tissue UK, ltd (formerly Accrol Papers, ltd) |
| - Acquisition of LTC Parent Ltd |
| - Acquisition of Leicester Tissue Company ltd |
| - Acquisition of Art Tissue ltd |
| - Acquisition of John Dale (Holdings)ltd |
| - Acquisition of John Dale, ltd |
| - Acquisition of Severn Delta, ltd |
10.3. Transactions with related parties
Balances with related parties
| 30-09-2024 | 31-12-2023 | |||
|---|---|---|---|---|
| Amounts in Euro | Payables (Note 4.3) |
Payables (Note 4.3) |
||
| Shareholders (Note 5.2) | ||||
| Semapa - Soc. de Investimento e Gestão, SGPS, S.A. | 1,157,285 | 952,804 | ||
| Other subsidiaries of Semapa Group | ||||
| Secil - Companhia Geral Cal e Cimento, S.A. | 64,249 | 40,974 | ||
| Secil Britas, S.A. | 218,607 | 111,647 | ||
| Secil Prebetão, S.A. | 72 | - | ||
| Unibetão, S.A. | 222,194 | 435,100 | ||
| Other related parties | ||||
| Hotel Ritz, S.A. | 7,408 | 1,672 | ||
| 1,669,815 | 1,542,197 |
Transactions of the period with related parties
| 30-09-2024 | 30-09-2023 | ||||
|---|---|---|---|---|---|
| Amounts in Euro | Purchase of goods and services |
Sales and services rendered |
Purchase of goods and services |
Sales and services rendered |
Other operating income |
| Shareholders (Note 5.2) | |||||
| Semapa - Soc. de Investimento e Gestão, SGPS, S.A. | 8,710,479 | 42 | 7,447,337 | 44 | - |
| 8,710,479 | 42 | 7,447,337 | 44 | - | |
| Other subsidiaries of Semapa Group | |||||
| Secil - Companhia Geral Cal e Cimento, S.A. | 109,933 | - | 121,550 | 2,435 | - |
| Secil Britas, S.A. | 105,160 | - | 98,935 | - | - |
| Secil Prebetão, S.A. | 72 | - | - | - | - |
| Unibetão, S.A. | 805,398 | - | 4,979 | - | - |
| 1,020,563 | - | 225,464 | 2,435 | - | |
| Other related parties | |||||
| Hotel Ritz, S.A. | 8,474 | - | 6,287 | - | 1,106 |
| 8,474 | - | 6,287 | - | 1,106 | |
| 9,739,516 | 42 | 7,679,088 | 2,479 | 1,106 |
On 1 February 2013, a contract to render administrative and management services was signed between Semapa – Sociedade de Investimentos e Gestão, SGPS, S.A., currently owner of 70.03% of the Group´s share capital, and Navigator Group, establishing a remuneration system based in equal criteria for both parties in the continuous cooperation and assistance relationships, that meets the rules applicable to commercial relationships between Group companies.
The operations performed with the Secil Group arise from normal market operations.
In the identification of related parties for the purpose of financial reporting, the members of the Board of Directors and other Corporate Bodies were considered as related parties.
11.Explanation added for translation
These financial statements are a translation of the financial statements originally issued in Portuguese. In the event of discrepancies, the Portuguese language version shall prevail.
BOARD OF DIRECTORS
Ricardo Miguel dos Santos Pacheco Pires Chairman of the Board of Directors
António José Pereira Redondo Chairman of the Executive Board
José Fernando Morais Carreira de Araújo Executive Board Member
Nuno Miguel Moreira de Araújo Santos Executive Board Member
João Paulo Cabete Gonçalves Lé Executive Board Member
Dorival Martins de Almeida Executive Board Member
António Quirino Vaz Duarte Soares Executive Board Member
Ana Teresa Cunha de Pinto Tavares Lehmann Member
Hugo Alexandre Lopes Pinto Member
Maria Isabel da Silva Marques Abranches Viegas Member
Maria Teresa Aliu Presas Member
Mariana Rita Antunes Marques dos Santos Member
Sandra Maria Soares Santos Member
Vítor Paulo Paranhos Ferreira Member