Quarterly Report • Nov 26, 2021
Quarterly Report
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| 1. | PERFORMANCE IN 3rd QUARTER 2021 AND 9 MONTHS OF 2021 | 2 |
|---|---|---|
| 2. | LEADING INDICATORS | 3 |
| 3. | ANALYSIS OF RESULTS | 4 |
| 4. | QUARTELY OPERATING FIGURES | 9 |
| 5. | "FROM FOSSIL TO FOREST" | 9 |
| 6. | PORTUCEL MOÇAMBIQUE | 10 |
| 7. | OUTLOOK | 10 |
| 8. | CONSOLIDATED FINANCIAL STATEMENTS AND NOTES | 12 |
After a start of 2021 marked by fresh waves of Covid-19 infections and periods of lockdown, with employees required to work from home and students taking classes online, a gradual reopening of economies has now been taking place. As vaccine roll-out gathered speed, teaching activities set in to normal and workers returned to offices. At the same time, global transports chain saw an unbalance triggered by the pandemic, and the effects are being felt across the economy. In this context, paper demand is strong, especially in Europe, taking order books to historically high levels.
Annual maintenance shutdown at Figueira da Foz pulp mill and paper machines, with an impact in 1st quarter, and annual stoppage at Aveiro tissue mill with an impact in the 2nd quarter; in the 3rd quarter, stoppages at Setúbal and Aveiro pulp mills; annual shutdown of PM4 paper machine in Setúbal and maintenance shutdown of tissue mill in Vila Velha de Ródão. It shall be noted that shutdowns were longer this year, as pandemic conditions last year did not allowed the execution of all planned maintenances.
Paper volumes totalled 1 081 thousand tons (+16%), pulp stood at 207 thousand tons (-30%) and tissue at 77.8 thousand tons (-2%);
| 9 M | 9 M | Change (8) | |
|---|---|---|---|
| Million euros | 2021 | 2020 | 9M 21 / 9M 20 |
| Total Sales | 1 119.7 | 1 043.9 | 7.3% |
| EBITDA (1) | 246.0 | 210.5 | 16.9% |
| Operating Profits (EBIT) | 156.8 | 99.6 | 57.4% |
| Financial Results | - 12.7 | - 9.1 | 40.6% |
| Net Earnings | 114.2 | 75.2 | 51.8% |
| Cash Flow | 203.5 | 186.1 | 17.4 |
| Free Cash Flow (2) | 182.7 | 170.4 | 12.2 |
| Capex | 51.8 | 69.7 | - 17.9 |
| Net Debt (3) | 596.9 | 644.0 | - 47.1 |
| EBITDA/Sales | 22.0% | 20.2% | 1.8 pp |
| ROS | 10.2% | 7.2% | 3.0 pp |
| ROCE (4) | 12.5% | 7.6% | 4.9 pp |
| ROE (5) | 14.8% | 9.4% | 5.3 pp |
| Equity Ratio | 42.0% | 41.5% | 0.4 pp |
| Net Debt/EBITDA (6)(7) | 1.86 | 2.28 | -0.42 |
| Q3 | Q2 | Change (8) | Q3 | Change (8) | |
|---|---|---|---|---|---|
| Million euros | 2021 | 2021 | Q3 21 / Q2 21 | 2020 | Q3 21/ Q3 20 |
| Total sales | 404.9 | 373.9 | 8.3% | 348.4 | 16.2% |
| EBITDA (1) | 95.5 | 79.9 | 19.6% | 70.4 | 35.8% |
| Operating profits | 66.1 | 50.6 | 30.6% | 35.9 | 84.0% |
| Financial results | - 2.6 | - 0.4 | 564.0% | - 0.8 | 229.0% |
| Net earnings | 49.8 | 40.9 | 21.8% | 31.2 | 59.6% |
| Cash flow | 79.3 | 70.2 | 9.1 | 65.7 | 13.6 |
| Free Cash Flow (2) | 61.2 | 65.1 | - 3.9 | 56.4 | 4.7 |
| Capex | 19.0 | 12.7 | 6.3 | 21.0 | - 2.0 |
| Net Debt (3) | 596.9 | 658.1 | - 61.2 | 644.0 | - 47.1 |
| 0.0 | 0.0 | ||||
| EBITDA/Sales (%) | 23.6% | 21.4% | 2.2 pp | 20.2% | 3.4 pp |
| ROS | 12.3% | 10.9% | 1.4 pp | 9.0% | 3.3 pp |
| ROCE (4) | 19.3% | 12.1% | 7.2 pp | 8.2% | 11.1 pp |
| ROE (5) | 19.3% | 16.2% | 3.1 pp | 11.7% | 7.6 pp |
| Equity ratio | 42.0% | 40.9% | 1.1 pp | 41.5% | 0.4 pp |
| Net Debt/EBITDA (6)(7) | 1.86 | 2.22 | -0.36 | 2.28 | -0.42 |
Variation in figures not rounded up/down
The third quarter showed a clear improvement compared with the second quarter of 2021, and naturally, in relation to the same period in 2020, when the Group's business was particularly hard hit by the pandemic. Turnover stood at € 405 million, up 8% on the 2nd quarter of 2021 and 16% on 2020, due essentially to the increase in paper volumes and higher pulp prices.
Paper sales volumes grew by 4% in relation to the 2nd quarter of 2021, to 380 thousand tons, recovering 13% as of the 3rd quarter of 2020. PIX A4-Copy B paper index rose by 3% from the 2nd to the 3rd quarter, and 2% in relation to the same period in 2020. Navigator average sales prices evolved well above market prices, increasing 9% between the 2nd and 3rd quarter, and 13% in relation to the same period in 2020. Paper prices positive evolution and rise in volumes allowed sales to grow 14% compared with the 2nd quarter and 28% in relation to the 3rd quarter of 2020.
Conversely, pulp sales volumes evolved differently, due to smaller availability of market pulp (- 26% as off 2nd quarter of 2021 and -47% in relation to the 3rd quarter of 2020), particularly due to maintenance shutdowns, higher UWF paper integration and destocking over the course of 2020, with the Company now working at minimum stock levels. Higher pulp prices registered in 2021 enabled some mitigation of smaller volumes, with pulp sales dropping 15% in relation to the 2nd quarter of 2021, and 7% in the same quarter of 2020.
On tissue, sales volume grew around 4% in relation to the previous quarter. Volumes are still 6% below the third quarter in 2020, via the slower than expected recovery in the Away From Home segment and destocking on domestic consumers. Tissue average sales price positive evolution allowed an improvement of 9% in relation to the 2nd quarter of 2021 and 1% in relation to the same period in 2020.
In this context, EBITDA stood at € 96 million (+20% vs the 2nd quarter and +36% vs the 3rd quarter of 2020) and the EBITDA/sales margin improved to 23.6%. Free Cash Flow in the quarter stood at € 61 million (vs. € 65 million in previous quarter and vs. €56 million in the 3rd quarter of 2020). Net income totalled € 50 million, significantly recovering versus the previous quarter (+22%) and same quarter of last year (+60%).
Navigator registered a turnover of € 1,120 million, with paper sales accounting about 73% of the total (vs. 68% in 2020), pulp sales 10% (vs. 11%), tissue sales 9% (vs. 10%) and energy sales 8% (vs. 10%). After a first quarter marked by fresh waves of Covid-19 infections and periods of lockdown in most of the Group's key markets, there has been a gradual reopening of economies and a recovery in paper demand. A strong hike on pulp prices levels, prepared the way for a sharp upwards adjustment in paper prices in the third quarter.
Global demand for printing and writing papers rose by 4% YTD August, with UWF paper growing 5%, clearly outperforming coated paper (+4%) and mechanical papers (+1%).
In Europe, demand for UWF paper over the first nine months performed even better, growing 6%. The estimated drop in European imports, around 30% on the same period in the previous year, drove European producers' sales, up 10% over the first 9 months of 2020. Demand increased 5% in the 3rd quarter, with European producers' sales in Europe growing 8%.
In the USA, forecasts on accumulated demand for UWF over the first nine months of the year point to a rise of 2% (5% in the 3rd quarter). This growth is expressively noticed in other world regions, where the increase was of 6%.
In this context, Navigator closed the third quarter with an order book of 61 days and a drop in its paper stocks over the first 9 months of the year, ending September with approximately 11 stock days, an all-time low record. The benchmark index for office paper in Europe stood at 866 € /ton at the end of September, up from the 806 €/ton at the start of the year, and shows a recovery in prices. Average sales price in the first 9 months still stood slightly lower than in the same period in 2020 (-0.5%), however it compares favourably with the average price index evolution in the period (-2.6%). The Group implemented price increases in all regions over the first nine months of the year and its average price has clearly improved since beginning of 2021. It should be noted that the average sales price ended up being highly penalised by exchange rates evolution on international markets, with product and market mixes reflecting the pandemic situation in Europe and the greater sales diversification in overseas markets, with a strong recovery in demand and prices.
In this context, Navigator's sales reflect the improvement in paper demand registered over the course of the year: sales in quantity grew 16% to 1,081 thousand tons. However, sales in euros were conditioned by price levels, showing a growth of approximately 15% during the period.
The Group has continued to invest in the packaging segment and both production and sales dynamic remain according to plan. The PM1 and PM3 machines at Setúbal mill ensure supply on a flexible regime, with PM1 already fully dedicated to packaging (white and brown).
There was a sharp and significant increase in pulp benchmark prices at the start of 2021, firstly in China and afterwards in Europe. The benchmark index for hardwood pulp in Europe – PIX BHKP in euros – was up by 77% in September in relation to the start of the year, to 979 Euros/ton, with an increase of approximately 36% in average prices in the first 9 months of 2021 vs. 9 months of 2020. The benchmark index in China for hardwood pulp rose by 20% from the start of the year to the end of September, to 600 USD/ton, peaking at 780 USD/ton in May. Since the second half of the 2nd quarter, pulp prices in China have been adjusting downwards, whilst European price keeps growing.
This improvement in pulp prices in Europe was sustained by a number of factors, most notably the vaccine roll-out, the easing of lockdown periods and consequent improvement in economic conditions and, on the other hand, generalised increment on commodity prices. At the same time, logistical costs have restrained paper exports from Asia (in particular from China) to Europe and Northern Africa. The combination of these effects had positive impacts in the sector, including strong demand for packaging and speciality products (and printing and writing paper as from the second quarter)
Simultaneously, supply-side constraints have been felt in the pulp market due to production shutdowns, planned and unplanned, with longer than usual maintenance shutdowns, as a result of the increased restrictions resulting from the pandemic. The conversion of some short fibre pulp capacity to soluble fibre, as well as current logistical issues, have also limited the amount of hardwood pulp available in the European market.
Navigator started 2021 with a relatively low level of pulp stocks. This, combined with the maintenance shutdown at the end of the first quarter at the Figueira da Foz site, followed by others in the 3rd quarter at the Setúbal and Aveiro industrial sites, together with higher integration of pulp into paper, limited the quantity of pulp available for sale in the first half. Sales stood at 207 thousand tons, 30% down on the first 9 months of 2020, when the Group benefited from a larger quantity of pulp available for sale via the lower integration into paper, with some paper machines shutdowns due to the pandemic and destocking. Pulp prices recovery observed since the start of the year made it possible to mitigate the decline in sales volumes, and the value of sales in the first nine months was 4% lower compared with the 9 months of 2020.
The tissue market felt the effects of mobility restrictions imposed again early in the year, especially in the Away-from-Home segment, with the delay in the economies reopening and consequent impact on the Horeca channel and the return to office work. In the At-Home segment, there was some destocking on household stocks, above all when compared with the same period in the previous year. As vaccination roll-outs progress and the prospects for a return to some kind of normality improve, a gradual upturn is expected in the Away-from-Home segment, albeit slower than initially anticipated.
The sharp rise in pulp prices over the year, currently peaking at 1,140 USD/ton for BHKP in Europe, has put heavy pressure on the margins of tissue producers, with a large number announcing price rises.
In this context, Navigator's sales maintained the good performance achieved in 2020, totalling 77.8 thousand tons, slightly down than the previous year (-2%). The average sales price was slightly higher (+1%) than in the previous year and sales prices for finished products positively evolved. As a result, sales in value were in line with 2020, decreasing by 1%.
In the first nine months of 2021, electricity sales totalled € 96 million, which represents a reduction of 12% in relation to the same period in the previous year. This drop is essentially explained by the higher self-consumption in Setúbal, due to a transformer breakdown, that since the beginning of the year hinders external energy purchase.
A reduction of around 13 million euros in production costs was achieved over the nine months, essentially due to improved efficiency in specific consumption levels. Despite this positive trend, a strong pressure on variable costs is expected in the fourth quarter and throughout 2022.
Although variable production costs moved favourably along 2021, a recent escalation was verified, in different commodities, mostly as a reflection of increased logistical, energy and CO2 costs. In Energy, power and natural gas prices rose, driven by the volume exposed to the market. To note that the effect of higher energy costs was mitigated by hedging risks policy, with fixed prices contracted for the majority of 2021 purchases, as well as by the reduction in natural gas consumption, given the new biomass boiler in Figueira da Foz.
Logistical costs have also worsened substantially, rising by 18 million euros; this situation was most acute in the 3rd quarter, as a result of current logistical constraints which are affecting the economy as a whole. Despite the difficult context in which Navigator is operating, both in terms of prices and availability of resources, the Company succeeded in operating at 100% capacity without any disruption to supplies.
Efforts to contain fixed costs initiated in 2020 hanged on, achieving a reduction in functioning costs of € 3 million in relation to the first nine months of 2020, whilst personnel and maintenance costs moved in the opposite direction, as anticipated, rising by 16% and 8% respectively. As a result, total fixed costs were 7% higher than in the first nine months of 2020. We reaffirm our commitment towards the good rhythm of fixed costs reduction achieved from 2019 to 2020, excluding Personnel costs, to 2021 as well.
In this context, EBITDA for the first nine months stood at € 246 million, as compared to € 210 million in the same period in 2020 (+16.9%). The EBITDA / Sales margin stood at 22.0% and compares with a margin of 20.2% YoY. To highlight the net negative impact of the exchange rate on EBITDA of approximately € 20 million, with an average EUR/USD rate in the first nine months of 2021 of 1.20, as compared to 1.12 in the first nine months of 2020.
Financial results stood at € 12.7 million (vs. € 9.0 million), a deterioration of € 3.7 million, essentially caused by the reduction in results from hedging operations (€ - 1.7 million), the negative interest variation (€ - 1.5 million) from a high level in 2020 on dollar-denominated values still to be received from the sale of the pellets business in 2018, and by the cancellation of an interest swap rate associated with a bond issue repaid in December 2020 (€ - 1.5 million). On the contrary, there was an increase of € 0.6 million in net interest income from financial investments, which edged into positive territory from the highly negative figures recorded in the first nine months of 2020. The costs of financing operations also evolved positively (€ 0.4 million), due to a reduction in average debt in relation to the same period in 2020, despite a small increase in average costs resulting from a smaller proportion of short term debt, which in 2020 rose to a significant level due to the liquidity obtained to face the pandemic situation.
As a result, pre-tax profits stood at € 144.0 million (vs. € 90.5 million in 2020), with corporation tax (IRC) payable in the period totalling € 29.8 million. Net income in the period totalled € 114.2 million, up by 52% on the same period in the previous year.
Free cash flow generation continued at a robust pace (€ 61 million in the 3rd quarter), following the favourable operational performance of the Group, in particular as regards sales and prices. The systematic focus on working capital management keeps being a relevant complementary element to improve the regularity of financial flows.
Investment in working capital was kept at low levels over the year, in a context of a moderate hike in stocks, following the gradual activity upturn; above all, this was observed in pulp stocks which, although still at historically low levels, rose in 2021 by around 16 thousand tons from their level at year-end 2020. In this context, our suppliers' management policy, combined with the provision of liquidity to support solutions for our partners, actively contributed to the level of cash flow generation.
Over the past 12 months (Sep-20 to Sep-21), Navigator generated a very impressive € 246 million in free cash flow.
Net debt has significantly fallen in relation to year-end 2020 and the same period in 2020, with Navigator also paying out € 100 million in dividends during the first half. Supported by the improvement on operational performance, the Net Debt/EBITDA ratio (1.86 X) is on a downwards course, further consolidating the financial strength position of the Group over recent years, and in line with the structural goal established in the Group's financing policy.
To recall the implemented short-term borrowing obtained in the first half of 2020, as part of efforts to safeguard liquidity in the face of the pandemic. In addition, the average maturity of the Group's debt has been extended after a restructuring process, concluded in August 2021, which allowed lengthening repayment periods, while simultaneously cutting the respective costs.
On the 5th of August, Navigator issued a five-year bond with a value of € 100 million, against early repayment of a financing operation of the same amount, maturing in 2023. This operation - which was combined with an interest rate swap - further extended the average maturity of the Group's debt and reduced the Company's financing costs, as well as featuring terms tied to the fulfilment of its sustainability commitments.
The terms of the loan are indexed to two ESG indicators envisaged in the Company's Sustainability Agenda, and also aligned with the United Nations Sustainable Development Goals. The first indicator sets targets for CO2 emissions reductions, consistent with the Company's Roadmap for Carbon Neutrality, in which Navigator commits itself to be carbon neutral at its industrial complexes by 2035. The second indicator sets targets for increasing the percentage of certified wood purchased on the Portuguese market. Wood certification is one of the most direct routes to achieve sustainability goals in our business sector, and the best guarantee that processes leading to sustainable forest management have been adopted.
Capital expenditure in the first 9 months totalled € 51.8 million (as compared to € 69.7 million in the first 9 months of 2020). This amount mainly includes projects aimed at maintaining production capacity and achieving efficiency gains. It also includes € 9.4 million in environmental investment, most notably the final stages of investment in the new biomass boiler at Figueira da Foz (€ 5.7 M) and the new evaporation line in Aveiro (€ 1.7 M), as well as approximately € 3.5 million in other
projects, including the new woodchip pile in Aveiro and the solar power facilities in Figueira da Foz (completed) and Setúbal (under construction). Execution of the Capex plan during the first 9 months of 2021 was constrained by the restrictions relating to the pandemic. It shall be recalled that, in 2020, in view of the uncertainty created by the pandemic, Navigator only executed, beyond the biomass boiler investment, essential projects to maintain the Group's capacity production, while postponing all other projects. With a better visibility onto the future, in the first quarter of 2021, the Capex execution plan was retaken, which, in practice, delayed circa one quarter, reason why 2021 execution stays equally below the average of the last years.
| Pulp | |||||||
|---|---|---|---|---|---|---|---|
| (in 000 to ns) |
Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | YoY | QoQ |
| BEKP Output | 337.6 | 363.9 | 337.1 | 380.2 | 356.2 | 5.5% | -6.3% |
| FOEX – BHKP Euros/ton | 583 | 570 | 650 | 853 | 967 | 66.1% | 13.5% |
| FOEX – BHKP USD/ton | 680 | 680 | 782 | 1028 | 1140 | 67.6% | 10.9% |
| Paper | |||||||
|---|---|---|---|---|---|---|---|
| (in 000 to ns) |
Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | YoY | QoQ |
| UWF Output | 333.4 | 353.9 | 330.0 | 370.0 | 374.0 | 12.2% | 1.1% |
| FOEX – A4- BCopy Euros/ton | 828 | 809 | 809 | 819 | 843 | 1.9% | 2.9% |
| Tissue | |||||||
|---|---|---|---|---|---|---|---|
| (in 000 to ns) |
Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | YoY | QoQ |
| Reels Output | 29.0 | 27.7 | 29.4 | 28.6 | 25.2 | -13.1% | -11.9% |
| Output of Finished Products | 19.2 | 18.8 | 21.2 | 20.5 | 19.1 | -0.5% | -6.8% |
| Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | YoY | QoQ | |
|---|---|---|---|---|---|---|---|
| Production (GWh) | 509.0 | 528.6 | 479.2 | 501.9 | 467 | -8.2% | -6.9% |
Navigator is set to launch a new packaging products business line, with the new gKraft brand, designed to help the acceleration of the transition from plastics to paper, taking up its commitment towards sustainability and protecting the environment. The new brand will be officially launched next Monday, November 1st, day in which Portuguese legislation will ban single-use plastics.
Based on "From Fossil to Forest" concept, which reflects the Company's strategy aligned with its purpose of creating sustainable value for its shareholders and for society as a whole, Navigator's new brand further strengthens its position to fight against climate change, by offering sustainable and environmentally-friendly solutions. With the launch of gKraft line, the Company is taking another stride towards the availability of packaging alternatives that support other organisations to meet their environmental targets. The new packaging solutions are tailored to the specific needs of the packaging market, focusing on the industrial and retail segments, in particular food, catering, pharmaceutical, clothing and cosmetics.
Thereby, Navigator is contributing with its products to the transition from a linear, fossil economy, based on finite resources and hostile to the planet, therefore with no future, to a sustainable circular bio-economy, based on renewable, recyclable and biodegradable forestry products, beneficial to nature and climate-neutral.
Development of the new gKraft line involved a vast programme of research, development and innovation, spearheaded by RAIZ, the Group's forestry and paper research institute. The new products take advantage of the specific molecular structure and morphology of Eucalyptus globulus fibres, in order to develop resistant and sustainable paper materials, alternative to single-use plastic. The project is generating a new portfolio of patents, one of which has already been submitted for publication.
Another key feature of the new brand is the quality seal that can be used by all producers using gKraft paper as raw material, boosting their commitment to create a better world and, at the same time, allowing partner entities to be eligible for future brand initiatives. This quality seal will, thus, provide a guarantee that the packaging uses paper, and the associated benefits.
In view of the vast range of products in the packaging business, Navigator plans at this stage to offer solutions for the flexible packaging (MF papers) segment, paper for bags and kraftliner for the production of corrugated cardboard boxes, and so expand its offers in the sector by 2022.
In the 3rd quarter, Portucel Moçambique exported its first consignment of wood produced in Mozambique, on its Manica plantations. A ship carrying 32 thousand cubic metres of debarked wood sailed from the port of Beira, in Mozambique, to the port of Aveiro, then forwarded to our industrial site in Figueira da Foz.
This first export from Portucel Moçambique marks the start of a cycle of wood harvests and exports from Manica province. Five shiploads are planned on total, three of which- already this year, and two in 2022. This first export operation was preceded by a first harvesting and transport operation, being crucial as a trial run and to gain a better understanding of the administrative, legal, licensing and tax proceeds, in order to scale up the venture and then move on to operations of greater value added.
As the economy recovers and the vaccination plan is implemented, conditions in the pulp, paper and tissue sector can be expected to remain globally positive.
In the paper business, the expected economic upturn combined with the improved balance between supply and demand in the United States and Europe, as a result of capacity closures and
conversions already announced, allow for good prospects for year-end 2021. Incoming orders and very full order books in the industry in September, low import volumes, under pressure from freight costs, and a balanced level of stocks in the pipeline, serve to underline this positive market outlook. Nevertheless, besides pulp and freight prices, chemical and energy costs are strongly pressuring European paper producers' margins, motivating them to announce new price increases.
The current economic situation of great volatility and cost increments, namely on energy, commodities, packaging and logistics, compelled Navigator to increase prices during the period; the latest announcement, communicated this month, included an extraordinary surcharge of 50€ per ton, for all products and brands in all markets, for expeditions as from November 1st, to apply at least over the next few months. The application and value of this surcharge will be reviewed regularly in the light of evolving market conditions. The current prices are valid until the end of the year.
In the pulp market, cooling demand in China and increased supply is causing a price drop in China; this was clearly visible in the third quarter and may continue, albeit at a significant lower rhythm, during the fourth quarter. In Europe, prices are expected to be sustained by the post-pandemic economic upturn, the healthy level of demand and the continuing logistical issues in exporting from Asia to Europe.
In tissue, higher prices for pulp and other factors of production are putting pressure on producers' margins and have accelerated announcements of price rises, although progress until the moment is slower than what might be needed to protect margins. The Company is implementing a set of initiatives to cut costs, which will enable the minimisation of the impact on its margins.
Portucel Moçambique has sent a second consignment of wood produced in Mozambique, on its plantations in Manica; the wood arrived in October to Setúbal port and a third consignment is planned before the end of the year.
Navigator will maintain an active approach to manage its fixed and variable costs across the organisation, developing its capex and diversification plan, as well as its sustainability projects.
Lisbon, 28 October 2021
Date: 3 November 2021
Service times: 17:00 (Western European Time)
Portugal: +351 308 806 432
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United Kingdom: 020 3936 2999
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All other locations: +44 20 3936 2999
| Amounts in Euro | Note | 9 months 30-09-2021 |
9 months 30-09-2020 |
|---|---|---|---|
| Revenue | 2.1 | 1,119,683,196 | 1,043,947,377 |
| Other operating income | 2.2 | 23,770,793 | 31,819,271 |
| Changes in the fair value of biological assets | 3.8 | (6,353,852) | (3,619,972) |
| Cost of goods sold and materials consumed | 2.3 | (449,564,880) | (420,975,784) |
| Variation in production | 2.3 | 11,322,299 | (28,172,449) |
| External services and supplies | 2.3 | (313,526,432) | (297,658,110) |
| Payroll costs | 7.1 | (109,299,163) | (94,355,851) |
| Other operating expenses | 2.3 | (30,032,065) | (20,531,412) |
| Net provisions | 9.1 | 144,318 | 475,594 |
| Depreciation, amortisation and impairment losses in non-financial | |||
| assets | 3.6 | (89,367,807) | (111,339,690) |
| Operating income | 156,776,407 | 99,588,974 | |
| Other financial income and gains | 5.8 | 7,166,720 | 6 198 622 |
| Other financial expenses and losses | 5.8 | (19,907,263) | (15 261 474) |
| Financial results | (12,740,543) | (9,062,852) | |
| Gains/ (losses) of associated companies and joint ventures | - | - | |
| Profit before income tax | 144,035,863 | 90,526,122 | |
| Income tax | 6.1 | (29,781,060) | (15 264 189) |
| Net profit for the period | 114,254,803 | 75,261,933 | |
| Attributable to Navigator's equity holders | 114,244,355 | 75,249,680 | |
| Attributable to non-controlling interests | 5.3 | 10,448 | 12,253 |
| Earnings per share | |||
| Basic earnings per share, Eur | 5.2 | 0.161 | 0.106 |
| Diluted earnings per share, Eur | 5.2 | 0.161 | 0.106 |
| Amounts in Euro Note |
9 months 30-09-2021 |
9 months 30-09-2020 |
|---|---|---|
| Net profit for the period | ||
| before non-controlling interests | 114,254,803 | 75,261,933 |
| Items that may be reclassified to profit or loss Hedge derivative financial instruments |
||
| Changes in fair value | (532,041) | 2,369,913 |
| Tax effect | 146,311 | (651,726) |
| Currency translation differences | (1,180,478) | (1,533,979) |
| Tax on conventional capital remuneration | (308,000) | (442,750) |
| Items that cannot be reclassified to profit or loss | ||
| Remeasurement of post-employment benefits | ||
| Remeasurements | 1,965,621 | (1,255,372) |
| Tax effect | (249,224) | 22,362 |
| Comprehensive income of associated companies and joint ventures | (2,638,679) | 1,162,423 |
| Total other comprehensive income net of taxes | (2,796,490) | (329,128) |
| Total comprehensive income | 111,458,313 | 74,932,804 |
| Attributable to: | ||
| Navigator's equity holders | 111,442,170 | 74,920,551 |
| Non-controlling interests | 16,143 | 12,253 |
| 111,458,313 | 74,932,804 |
| Amounts in Euro | Note | 30-09-2021 | 31-12-2020 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 3.1 | 377,339,466 | 377,339,466 |
| Intangible assets | 3.2 | 21,220,125 | 11,912,684 |
| Property, plant and equipment | 3.3 | 1,148,323,317 | 1,183,949,592 |
| Right-of-use assets | 3.5 | 50,346,940 | 51,827,000 |
| Biological assets | 3.7 | 142,230,600 | 148,584,452 |
| Investment properties | 3.4 | 93,001 | 94,236 |
| Non-current receivables | 4.2 | 16,074,420 | 34,696,105 |
| Deferred tax assets | 6.2 | 29,021,555 | 30,629,217 |
| 1,784,649,423 | 1,839,032,752 | ||
| Current assets | |||
| Inventories | 4.1 | 191,184,853 | 176,735,137 |
| Current receivables | 4.2 | 258,217,061 | 231,772,282 |
| Income tax | 6.1 | 1,579,845 | 3,482,762 |
| Cash and cash equivalents | 5.6 | 243,071,648 | 302,399,831 |
| 694,053,406 | 714,390,012 | ||
| Total Assets | 2,478,702,829 | 2,553,422,764 | |
| EQUITY AND LIABILITIES | |||
| Capital and Reserves | |||
| Share capital | 5.1 | 500,000,000 | 500,000,000 |
| Treasury shares | 5.1 | - | (20,189,264) |
| Currency translation reserve | (22,062,047) | (20,881,569) | |
| Fair value reserve | (7,027,098) | (6,641,368) | |
| Legal reserve | 100,000,000 | 100,000,000 | |
| Other reserves | 121,836,100 | 266,443,646 | |
| Retained earnings | 230,811,737 | 97,981,342 | |
| Net profit for the period | 114,244,355 | 109,213,720 | |
| Equity attributable to Navigator's equity holders | 1,037,803,047 | 1,025,926,507 | |
| Non-controlling interests | 5.3 | 291,325 | 275,182 |
| Total Equity | 1,038,094,372 | 1,026,201,689 | |
| Non-current liabilities | |||
| Interest-bearing liabilities | 5.4 | 789,268,840 | 690,878,427 |
| Lease liabilities | 5.5 | 46,770,649 | 47,473,102 |
| Pensions and other post-employment benefits | 7.2 | 9,851,454 | 12,562,465 |
| Deferred tax liabilities | 6.2 | 88,335,533 | 85,962,014 |
| Provisions | 9.1 | 23,520,407 | 23,409,335 |
| Non-current payables | 4.3 | 33,997,294 | 30,234,237 |
| 991,744,177 | 890,519,580 | ||
| Current liabilities | |||
| Interest-bearing liabilities | 5.4 | 50,708,537 | 291,532,356 |
| Lease liabilities | 5.5 | 5,390,673 | 5,607,817 |
| Current payables | 4.3 | 347,307,255 | 303,649,690 |
| Income tax | 6.1 | 45,457,815 | 35,911,632 |
| 448,864,280 | 636,701,495 | ||
| Total Liabilities | 1,440,608,457 | 1,527,221,075 | |
| Total Equity and Liabilities | 2,478,702,829 | 2,553,422,764 |
| Amounts in Euro | Note | Share capital |
Treasury shares |
Currency translation reserve |
Fair value reserve |
Legal reserve |
Other reserves |
Retained earnings |
Net profit for the period |
Total | Non controlling interests |
Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity as at 1 January 2021 | 500,000,000 | (20,189,264) (20,881,569) | (6,641,368) 100,000,000 | 266,443,646 | 97,981,342 | 109,213,720 1,025,926,507 | 275,182 1,026,201,689 | |||||
| Net profit for the period | - | - | - | - | - | - | - | 114,244,355 | 114,244,355 | 10,448 | 114,254,803 | |
| Other comprehensive income (net of taxes) | - | - | (1,180,478) | (385,730) | - | - | (1,235,977) | - | (2,802,185) | 5,695 | (2,796,490) | |
| Total comprehensive income for the period | - | - | (1,180,478) | (385,730) | - | - | (1,235,977) 114,244,355 | 111,442,170 | 16,143 | 111,458,313 | ||
| Application of 2020 net profit for the period: | ||||||||||||
| - Dividends | - | - | - | - | - | - | (99,565,630) | - | (99,565,630) | - | (99,565,630) | |
| - Application of prior period's net profit | - | - | - | - | - | - | 116,213,720 | (109,213,720) | 7,000,000 | - | 7,000,000 | |
| - Bonus to employees | - | - | - | - | - | - | (7,000,000) | - | (7,000,000) | - | (7,000,000) | |
| Transfer from free reserves to retained earnings | - | - | - | - | - | (138,290,615) | 138,290,615 | - | - | - | - | |
| Incorporation of reserves | 6,316,931 | - | - | - | - | (6,316,931) | - | - | - | - | - | |
| Cancellation of treasury shares | 5.1 | (6,316,931) | 20,189,264 | - | - | - | - | (13,872,333) | - | - | - | - |
| Total transactions with shareholders | - | 20,189,264 | - | - | - | (144,607,546) | 134,066,372 (109,213,720) | (99,565,630) | - | (99,565,630) | ||
| Equity as at 30 September 2021 | 500,000,000 | - | (22,062,047) | (7,027,098) 100,000,000 | 121,836,100 | 230,811,737 | 114,244,355 1,037,803,047 | 291,325 1,038,094,372 |
| Amounts in Euro | Note | Share capital |
Treasury shares |
Currency translation reserve |
Fair value reserve |
Legal reserve |
Other reserves |
Retained earnings |
Net profit for the period |
Total | Non controlling interests |
Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity as at 1 January 2020 | 500,000,000 | (20,189,264) (18,728,949) | (6,384,412) 100,000,000 | 98,153,331 | 206,004,258 | 168,290,315 1,027,145,277 | 273,817 1,027,419,094 | |||||
| Net profit for the period | - | - | - | - | - | - | - | 75,249,680 | 75,249,680 | 12,253 | 75,261,933 | |
| Other comprehensive income (net of taxes) | - | - | (1,533,979) | 1,718,187 | - | - | (513,025) | - | (328,816) | (313) | (329,129) | |
| Total comprehensive income for the period | - | - | (1,533,979) | 1,718,187 | - | - | (513,025) | 75,249,680 | 74,920,864 | 11,940 | 74,932,804 | |
| Application of 2019 net profit for the period: | ||||||||||||
| - Dividends | - | - | - | - | - | - | - | - | - | - | - | |
| - Application of prior period's net profit | - | - | - | - | - | - | 168,290,315 | (168,290,315) | - | - | - | |
| Total transactions with shareholders | - | - | - | - | - | - | 168,290,315 (168,290,315) | - | - | - | ||
| Equity as at 30 September 2020 | 500,000,000 | (20,189,264) (20,262,928) | (4,666,225) 100,000,000 | 98,153,331 | 373,781,548 | 75,249,680 1,102,066,141 | 285,757 1,102,351,898 |
| Amounts in Euro | Notes | 9 months 30-09-2021 |
9 months 30-09-2020 |
|---|---|---|---|
| OPERATING ACTIVITIES Receipts from customers |
1,130,160,938 | 1,093,024,368 | |
| Payments to suppliers | (822,092,742) | (775,290,388) | |
| Payments to employees | (80,921,161) | (77,841,239) | |
| Cash flows from operations | 227,147,035 | 239,892,741 | |
| Income tax received/(paid) | 6.1 | (10,232,671) | 19,713,170 |
| Other (payments)/receipts relating to operating activities | 47,197,559 | 6,925,812 | |
| Cash flows from operating activities (1) | 264,111,924 | 266,531,723 | |
| INVESTING ACTIVITIES | |||
| Inflows: | |||
| Property, plant and equipment | 744,044 | 995,279 | |
| Interest and similar income | 5,422,308 | 2,533,173 | |
| 6,166,352 | 3,528,452 | ||
| Outflows: | |||
| Property, plant and equipment | (53,683,912) | (78,257,806) | |
| Intangible assets | (13,882,322) | (742,792) | |
| Cash flows from investing activities (2) | (67,566,234) (61,399,882) |
(79,000,598) (75,472,146) |
|
| FINANCING ACTIVITIES | |||
| Inflows: | |||
| Interest-bearing liabilities | 5.4 | 247,500,000 | 210,000,000 |
| 247,500,000 | 210,000,000 | ||
| Outflows: | |||
| Interest-bearing liabilities | 5.4 | (389,479,268) | (97,819,452) |
| Amortisation of lease agreements | (6,223,782) | (6,342,794) | |
| Interest and similar expenses | (14,083,126) | (11,738,673) | |
| Distribution of dividends | (99,565,630) | (99,138,920) | |
| Other financing activities | (208,803) | (1,776,374) | |
| (509,560,609) | (216,816,213) | ||
| Cash flows from financing activities (3) | (262,060,609) | (6,816,213) | |
| CHANGES IN CASH AND CASH EQUIVALENTS (1)+(2)+(3) | (59,348,566) | 184,243,365 | |
| Effect of exchange rate differences | 20,384 | (994,650) | |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | 5.6 | 302,399,831 | 161,880,403 |
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 5.6 | 243,071,648 | 345,129,118 |
| 1 | INTRODUCTION 19 | |
|---|---|---|
| 1.1 | THE GROUP 19 | |
| 1.2 | IMPACTS OF THE COVID-19 PANDEMIC 20 | |
| 1.3 | RELEVANT EVENTS OF THE PERIOD 20 | |
| 1.4 | SUBSEQUENT EVENTS 21 | |
| 1.5 | BASIS FOR PREPARATION 21 | |
| 1.6 | SIGNIFICANT ESTIMATES AND JUDGMENTS 21 | |
| 2 | OPERATIONAL PERFORMANCE 22 | |
| 2.1 | REVENUE AND SEGMENT REPORTING 22 | |
| 2.2 | OTHER OPERATING INCOME 24 | |
| 2.3 | OTHER OPERATING EXPENSES 25 | |
| 3 | INVESTMENTS 26 | |
| 3.1 | GOODWILL 26 | |
| 3.2 | INTANGIBLE ASSETS 27 | |
| 3.3 | PROPERTY, PLANT AND EQUIPMENT 28 | |
| 3.4 | INVESTMENT PROPERTIES 29 | |
| 3.5 | RIGHT-OF-USE ASSETS 29 | |
| 3.6 | DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSES 30 | |
| 3.7 | BIOLOGICAL ASSETS 30 | |
| 4 | WORKING CAPITAL 31 | |
| 4.1 | INVENTORIES 31 | |
| 4.2 | RECEIVABLES 32 | |
| 4.3 | PAYABLES 33 | |
| 5 | CAPITAL STRUCTURE 34 | |
| 5.1 | SHARE CAPITAL AND THEASURY SHARES 34 | |
| 5.2 | EARNINGS PER SHARE 35 | |
| 5.3 | NON-CONTROLLING INTERESTS 35 | |
| 5.4 | INTEREST-BEARING LIABILITIES 35 | |
| 5.5 | LEASE LIABILITIES 37 | |
| 5.6 | CASH AND CASH EQUIVALENTS 37 | |
| 5.7 | CASH FLOWS FROM FINANCING ACTIVITIES 38 | |
| 5.8 | NET FINANCIAL RESULTS 38 | |
| 6 | INCOME TAX 39 | |
| 6.1 | INCOME TAX FOR THE PERIOD 39 | |
| 6.2 | DEFERRED TAXES 41 | |
| 7 | PAYROLL 42 | |
| 7.1 | PAYROLL COSTS 42 |
| 8 | FINANCIAL INSTRUMENTS 45 | ||
|---|---|---|---|
| 8.1 | DERIVATIVE FINANCIAL INSTRUMENTS 45 | ||
| 9 | PROVISIONS, COMMITMENTS AND CONTINGENCIES 46 | ||
| 9.1 | PROVISIONS 46 | ||
| 9.2 | COMMITMENTS 46 | ||
| 10 | GROUP STRUCTURE 47 | ||
| 10.1 | COMPANIES INCLUDED IN THE CONSOLIDATION PERIMETER 47 | ||
| 10.2 | CHANGES IN THE CONSOLIDATION PERIMETER 48 | ||
| 10.3 | TRANSACTIONS WITH RELATED PARTIES 48 | ||
The Navigator Group (Group) is comprised by The Navigator Company, S.A. (until 2015 designated as Portucel, S.A.) and its subsidiaries.
The Navigator Group was created in the mid 1950's, 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 EP was created as a result of the nationalisation of all of Portugal's cellulose industry. (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), being converted into a mainly public anonymous society by Decree-Law No. 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 to its privatisation, Portucel S.A. was created, on 31 May 1993, through Decree-law No. 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 uncoated wood-free paper (UWF), with a capacity of 1.5 and 1.6 millions of tons (of which 800 thousand tons available for market), respectively, and it sells approximately 393 thousand tons of pulp (350 thousand tons in 2020), 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 of Portucel, S.A., and Párpublica, SGPS, S.A. (formerly Portucel, SGPS, S.A.) sold the remaining 25.72% it still held.
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, SGPS, S.A., in July 2015.
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 and the third in the Iberian Peninsula, with a production and transformation capacity of 130 thousand tons and 120 thousand tons, respectively.
The Navigator 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. (hereinafter 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, 2901-861 Setúbal Portugal |
| Legal Form: | Public Limited Company |
| Share Capital: | Euro 500,000,000 |
| Registration No.: | 503 025 798 |
Navigator is included in the consolidation perimeter of Semapa – Sociedade de Investimento e Gestão, SGPS, S.A., the Parent Company, and Sodim - SGPS, S.A., the final controlling entity.
The Navigator Group has continued to monitor the evolution of this public health emergency on an ongoing basis, with constant updates of its contingency plan in line with guidance from the Portuguese Directorate-General of Health and Government.
The Group continues to study the potential impacts on its financial position, performance and cash flows of the Group arising from the decline in economic activity as a result of the Covid-19 pandemic, namely the impacts on significant accounting estimates and judgements. No evidence of impairment resulted from this analysis.
The Company continues to show a remarkable free cash-flow generation and a strengthened financial position, and it is the Board of Directors' belief that, given its financial and liquidity position, the Group will overcome the negative impacts of this crisis, without compromising the going concern principle applied in the preparation of these financial statements.
The Navigator Company Group launched a new line of packaging products, under the new gKraft brand, with the aim of helping to accelerate the transition from the use of plastic to the use of natural, sustainable, recyclable and biodegradable fibres, thereby assuming once again its commitment to sustainability and environmental preservation.
The launch of the brand took place on 1 November, the date on which Portuguese legislation banning singleuse plastics came into force.
Based on the concept "From Fossil to Forest", which reflects the Company's strategy aligned with the purpose of creating sustainable value for its shareholders and for society as a whole, Navigator has therefore strengthened its position in the fight against climate change by offering sustainable and environmentally friendly solutions.
Accordingly, with the launch of the gKraft line, the Company has taken a step towards providing packaging alternatives that help other organisations meet their environmental objectives. The new packaging solutions are tailored to the specific needs of the packaging market, with special focus on the industrial and retail segments, namely food, catering, pharmaceutical, clothing and cosmetics.
No subsequent relevant events have occurred between the balance sheet date and the approval of these financial statements.
These consolidated financial statements were approved by the Board of Directors and authorised for issue on 26 October 2021.
The Condensed consolidated financial statements for the nine-month period ended 30 September 2021 were prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting.
The accompanying 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), and under the historical cost convention, except for available-for-sale financial assets, derivative financial instruments and biological assets, which are recorded at their fair value.
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 interim financial statements should be read together with the Navigator Group's consolidated financial statements for the period ended 31 December 2020.
The condensed consolidated financial statements have been prepared in Euro, except if mentioned otherwise.
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:
On the date on which the operations are realised, the outcome could differ from those estimates.
More significant estimates and judgements are presented below:
| Estimates and judgements | Notes |
|---|---|
| Recoverability of Goodwill | 3.1 – Goodwill |
| Uncertainty over Income Tax Treatments | 6.1 - Income tax for the period 6.2 - Deferred taxes |
| Actuarial assumptions | 7.2 - Employee Benefits |
| Fair value of biological Assets | 3.8 – Biological assets |
| Recognition of provisions | 9.1 - Provisions |
| Recoverability, useful life and depreciation of property, plant and equipment |
3.3 – Property, plant and equipment |
Navigator's Executive Committee is primarily responsible for the Group's operational decisions, periodically and consistently analysing the reports on the financial and operational information of each segment. The reports are used to monitor the operational performance of its business and to decide on the best allocation of resources to the segment, as well as the evaluation of its performance and strategic decision-making.
The information used in segment reporting corresponds to the financial information prepared by the Group and there are no adjustments to be considered. All the inter-segment sales and services correspond to market prices and are eliminated on consolidation.
In 2020, the Group changed its segment reporting. When aggregating the Group's operating segments, the Board of Directors defined as reportable segments in 2020 those that correspond to each of the business areas developed by the Group, as follows:
iv. Support – segment where the Group's corporate centre and financial management (holding) are included.
| 30-09-2021 | ||||||
|---|---|---|---|---|---|---|
| PULP MARKET | UWF PAPER | TISSUE PAPER | ENERGY | SUPPORT | TOTAL | |
| REVENUE | ||||||
| Sales and services rendered - external | 110,191,550 | 808,128,954 | 106,242,449 | 95,120,244 | - | 1,119,683,196 |
| Sales and services rendered - intersegment Total Revenue |
1,834,985 112,026,535 |
- 808,128,954 |
- 106,242,449 |
- 95,120,244 |
(1,834,985) | - (1,834,985) 1,119,683,196 |
| PROFIT/ (LOSS) | ||||||
| Segmental profit | 35,811,271 | 149,874,528 | 15,030,195 | 5,342,052 | (49,281,640) | 156,776,407 |
| Operating profit | 156,776,407 | |||||
| Financial results | - | - | - | - | (12,740,543) | (12,740,543) |
| Income tax | - | - | - | - | (29,781,060) | (29,781,060) |
| Profit after income tax | 114,254,803 | |||||
| Non-controlling interests | - | - | - | - | (10,448) | (10,448) |
| Net profit | - | - | - | - | - | 114,244,355 |
| OTHER INFORMATION | ||||||
| Capital expenditure | 9,904,498 | 30,262,125 | 2,905,863 | 6,222,224 | 2,511,493 | 51,806,204 |
| Depreciation and impairment | (8,284,280) | (57,367,748) | (7,620,006) | (15,618,762) | (477,010) | (89,367,807) |
| Provisions ((increases)/reversal) | (12,000) | (566,239) | - | (36,000) | 758,558 | 144,318 |
| OTHER INFORMATION | ||||||
| SEGMENT ASSETS | ||||||
| Goodwill | - | 376,756,383 | 583,083 | - | - | 377,339,466 |
| Property, plant and equipment | 131,545,637 | 661,327,161 | 151,559,450 | 202,517,191 | 1,373,878 | 1,148,323,317 |
| Right-of-use assets | 10,204,272 | 37,139,545 | - | - | 3,003,124 | 50,346,940 |
| Biological assets | 35,557,650 | 106,672,950 | - | - | - | 142,230,600 |
| Non-currrent receivables | 73,767 | 520,287 | 90,178 | - | 15,390,188 | 16,074,420 |
| Inventories | 11,448,296 | 158,334,904 | 21,040,538 | 361,115 | - | 191,184,853 |
| Trade receivables | 23,422,891 | 124,865,487 | 29,724,710 | - | - | 178,013,090 |
| Other receivables | 4,726,367 | 17,411,244 | 216,119 | 2,661,970 | 55,188,271 | 80,203,971 |
| Other assets | 4,853,975 | 59,855,950 | 4,877,358 | 2,550,339 | 222,848,550 | 294,986,173 |
| Total Assets | 221,832,855 | 1,542,883,911 | 208,091,437 | 208,090,615 | 297,804,011 | 2,478,702,829 |
| SEGMENT LIABILITIES | ||||||
| Interest-bearing liabilities | - | 554,367 | 35,572,288 | - | 803,850,723 | 839,977,377 |
| Lease liabilities | 10,617,466 | 38,428,960 | - | - | 3,114,896 | 52,161,322 |
| Other payables | 41,165,484 | 192,926,284 | 24,503,228 | 2,716,651 | 119,992,902 | 381,304,549 |
| Other liabilities | 6,997,839 | 84,232,602 | 1,780,050 | 7,649,200 | 66,505,517 | 167,165,208 |
| Total Liabilities | 58,780,789 | 316,142,213 | 61,855,566 | 10,365,851 | 993,464,037 | 1,440,608,457 |
In the nine-month period ended 30 September 2021, The Navigator Company recorded turnover in the amount of Euro 1,120 million, with paper sales accounting for approximately 72% of turnover (vs. 68%), pulp sales 10% (vs. 11%), tissue sales 10% (vs. 10%) and energy sales 9% (vs. 10%).
The fixed capital expenditure for the 9-month period ended 30 September 2021 amounted to Euro 51,806,204, mainly including maintenance and environmental investments.
All equipment allocated to the UWF pulp and paper production are included in Property, plant and equipment of the respective segments.
The assets related to forests are allocated to the pulp and UWF paper segments, according to the production capacity of each segment.
The Group's real estate assets are allocated to the respective business segment.
The majority of the assets allocated to each of the individual segments, with the exception of receivables, is located in Portugal.
In accordance with the Navigator Company Group's financing policy, all loans are contracted by the Group's holding company, The Navigator Company, S.A., which is responsible for bearing all debt and related charges.
Accordingly, interest-bearing liabilities (Note 5.4) are allocated to the "Support" segment, which includes the Group's corporate centre (Holding), with the exception of the repayable grant related to the construction of the new Tissue plant, allocated to the "Tissue Paper" segment and a portion of the "Inpactus" grant allocated to the "UWF Paper" segment.
Following the change in the reporting of internal information to management at the end of 2020, we present below the segment reporting for 30 September 2020 restated:
| 30-09-2020 Restated | ||||||
|---|---|---|---|---|---|---|
| PULP MARKET | UWF PAPER | TISSUE PAPER | ENERGY | SUPPORT | TOTAL | |
| REVENUE | ||||||
| Sales and services rendered - products | 117,533,570 | 705,845,061 | 104,729,454 | 106,844,202 | - | 1,034,952,287 |
| Sales and services rendered - intersegment | 1,941,000 | - | - | - | (1,941,000) | - |
| Total Revenue | 119,474,570 | 705,845,061 | 104,729,454 | 106,844,202 | (1,941,000) 1,034,952,287 | |
| Réditos totais | 119,474,570 | 705,845,061 | 104,729,454 | 106,844,202 | (1,941,000) 1,034,952,287 | |
| PROFIT/ (LOSS) | ||||||
| Segmental profit | 6,979,173 | 99,896,601 | 2,212,953 | 15,759,307 | (25,259,061) | 99,588,974 |
| Operating profit | - | - | - | - | - | 99,588,974 |
| Financial results | - | - | - | - | (9,062,852) | (9,062,852) |
| Income tax | - | - | - | - | (15,264,189) | (15,264,189) |
| Profit after income tax | - | - | - | - | - | 75,261,933 |
| Non-controlling interests | - | - | - | - | (12,253) | (12,253) |
| Net profit | - | - | - | - | (12,253) | 75,249,680 |
| OTHER INFORMATION | ||||||
| Capital expenditure | 16,355,561 | 24,853,671 | 4,289,799 | 21,767,548 | 2,473,544 | 69,740,122 |
| Depreciation and impairment | (8,904,760) | (72,685,250) | (14,792,990) | (14,262,957) | (693,732) | (111,339,690) |
| Provisions ((increases)/ reversal) | (12,000) | (296,049) | (24,000) | - | 807,643 | 475,594 |
| OTHER INFORMATION | ||||||
| SEGMENT ASSETS | ||||||
| Goodwill | - | 376,756,383 | 583,083 | - | - | 377,339,466 |
| Property, plant and equipment | 128,779,056 | 707,961,216 | 156,755,016 | 208,742,258 | 2,179,085 | 1,204,416,632 |
| Right-of-use assets | 10,128,153 | 38,006,958 | - | - | 3,598,349 | 51,733,460 |
| Biological assets | 32,037,467 | 96,112,401 | - | - | - | 128,149,868 |
| Non-current receivables | 60,160 | 422,691 | 86,528 | - | 31,954,959 | 32,524,338 |
| Inventories Trade receivables |
19,810,516 16,913,502 |
170,732,190 105,721,927 |
20,350,301 26,333,029 |
456,725 - |
- - |
211,349,731 148,968,457 |
| Other current receivables | 2,863,525 | 34,121,775 | 246,207 | 4,896,194 | 72,328,784 | 114,456,485 |
| Other assets | 668,594 | 25,917,120 | 662,991 | 106,932 | 358,219,833 | 385,575,470 |
| Total Assets | 211,260,973 | 1,555,752,661 | 205,017,154 | 468,281,009 | 2,654,513,907 | |
| SEGMENT LIABILITIES | ||||||
| Interest-bearing liabilities | - | 548,394 | 36,701,187 | - | 951,839,025 | 989,088,606 |
| Lease liabilities | 10,515,397 | 39,238,946 | - | - | 3,679,722 | 53,434,064 |
| Other payables | 34,738,156 | 168,572,533 | 24,745,384 | 27,644,246 | 99,163,306 | 354,863,624 |
| Other liabilities | 16,696,031 | 73,426,107 | 2,796,529 | 4,999,767 | 56,857,280 | 154,775,714 |
| Total Liabilities | 61,949,584 | 281,785,980 | 64,243,100 | 32,644,012 | 1,111,539,333 | 1,552,162,009 |
| 30-09-2021 Amounts in Euro |
Pulp | UWF Paper | Tissue Paper | Energy | Support | Total Amount |
Total % |
|---|---|---|---|---|---|---|---|
| Portugal | 1,670,926 | 42,683,952 | 40,253,150 | 95,667,420 | - | 180,275,448 | 16% |
| Rest of Europe | 84,278,309 | 407,047,363 | 60,893,756 | - | - | 552,219,427 | 49% |
| America | 1,458,740 | 138,496,820 | 1,201,290 | - | - | 141,156,850 | 13% |
| Africa | 9,493,903 | 134,295,111 | 3,447,264 | - | - | 147,236,278 | 13% |
| Asia | 12,858,474 | 83,995,479 | 534,345 | - | - | 97,388,298 | 9% |
| Overseas | - | 1,406,894 | - | - | - | 1,406,894 | 0% |
| 109,760,351 | 807,925,619 | 106,329,805 | 95,667,420 | - | 1,119,683,196 | 100% | |
| Recognition pattern | |||||||
| At a point in time | 109,760,351 | 807,925,619 | 106,329,805 | 95,667,420 | - | 1,119,683,196 | 100% |
| Over time | - | - | - | - | - | 0% |
| 30-09-2020 Amounts in Euro |
Pulp | UWF Paper | Tissue Paper | Energy | Support | Total Amount |
Total % |
|---|---|---|---|---|---|---|---|
| Portugal | 3,382,271 | 55,118,884 | 39,203,406 | 106,844,202 | - | 204,548,764 | 20% |
| Rest of Europe | 54,708,009 | 384,595,862 | 59,747,273 | - | - | 499,051,144 | 48% |
| America | 736,251 | 95,084,821 | 2,799,669 | - | - | 98,620,742 | 10% |
| Africa | 11,819,164 | 96,077,386 | 2,728,012 | - | - | 110,624,562 | 11% |
| Asia | 46,887,874 | 74,519,219 | 251,094 | - | - | 121,658,187 | 12% |
| Overseas | - | 448,888 | - | - | - | 448,888 | 0% |
| 117,533,570 | 705,845,061 | 104,729,454 | 106,844,202 | - | 1,034,952,287 | 100% | |
| Recognition pattern | |||||||
| At a point in time | 117,533,570 | 705,845,061 | 104,729,454 | 106,844,202 | - | 1,034,952,287 | 100% |
| Over time | - | - | - | - | - | 0% |
In 2021 and 2020, no single customer accounted for 10% or more of the Group's total revenues.
For the nine-month period ended 30 September 2021 and 2020, Other operating income is detailed as follows:
| Amounts in Euro | 30-09-2021 | 30-09-2020 |
|---|---|---|
| Gains on disposal of non-current assets | 2,716,765 | 559,784 |
| Grants - CO2 emission allowances | 13,843,245 | 9,080,554 |
| Additional income | 655,426 | 1,261,180 |
| Operating grants | 2,117,680 | 2,931,006 |
| Reversal of impairment in receivables | 47,130 | 45,255 |
| Reversal of impairment in inventories | 18,717 | 9,709,455 |
| Gains on inventories | 1,117,381 | 1,542,898 |
| Own work capitalised | 707,046 | 322,027 |
| Compensation received | 89,445 | 2,116,763 |
| Other operating income | 2,457,958 | 4,250,349 |
| 23,770,793 | 31,819,271 |
Gains on CO2 allowances correspond to the recognition of the estimate of free allocation of allowances for 442,692 tons of CO2, at the average price of Euro 33.69 (482,453 tons of CO2, at the average price of Euro 23.82 as at 30 September 2020) (Note 3.2).
In the nine-month period ended 30 September 2021, Gains on disposal of non-current assets includes the sale of the wood and biomass park in Albergaria-a-Velha that was inactive, which generated a gain of Euro 2,458,230.
The reversal of impairment on inventories in 2020 resulted from the sale of UWF (Euro 4,575,051) and Tissue (Euro 1,069,943) paper waste, which led to the revision of the impairment amounts and their reversal.
As at 30 September 2020, Insurance compensation included the compensation associated with the failure of the steam turbine at the Setúbal combined gas power station.
| Amounts in Euro | 30-09-2021 | 30-09-2020 |
|---|---|---|
| Cost of goods sold and materials consumed | 449,564,880 | 420,975,784 |
| External services and supplies | ||
| Energy and fluids | 90,991,072 | 89,267,773 |
| Transportation of goods | 106,175,971 | 82,958,545 |
| Specialised work | 58,489,031 | 58,683,302 |
| Maintenance and repair | 20,771,528 | 25,799,695 |
| Insurance | 5,766,918 | 8,533,705 |
| Advertising and marketing | 8,184,957 | 9,259,257 |
| Rentals | 6,889,985 | 6,666,724 |
| Fees | 3,527,416 | 3,142,242 |
| Travel and accommodation | 1,774,539 | 1,641,919 |
| Materials | 1,666,079 | 1,778,918 |
| Communication | 1,117,157 | 947,201 |
| Subcontracts | 1,960,721 | 3,005,162 |
| Other | 6,211,056 | 5,973,667 |
| 313,526,432 | 297,658,110 | |
| Variation in production | (11,322,299) | 28,172,449 |
| Payroll costs (Note 7.1) | 109,299,163 | 94,355,851 |
| Other operating expenses | ||
| CO2 emission expenses | 19,236,922 | 12,987,588 |
| Impairment on receivables | 108,705 | 301,590 |
| Impairment on inventories | 3,199,757 | 341,601 |
| Other inventory losses | 1,512,557 | 692,079 |
| Indirect taxes and fees | 1,718,879 | 1,094,983 |
| Water resource fee | 1,431,852 | 1,805,068 |
| Losses on the disposal of non-current assets Other operating expenses |
23,655 2,799,738 |
122 179 3,186,324 |
| 30,032,065 | 20,531,412 | |
| Net provisions (Note 9.1) | (144,318) | (475,594) |
| Total operating expenses | - 890,955,923 |
861,218,012 |
In the nine-month period ended 30 September 2021, there was an increase in logistics, energy and CO2 costs. In Energy, there was an increase in electricity and natural gas prices, although the increase in costs was partially mitigated by the risk hedging policy with fixed-rate contracts for most of the 2021 purchases, and by the reduction in natural gas consumption due to the new biomass boiler in Figueira da Foz.
Logistics costs had a significant worsening, particularly in the third quarter, due to the imbalance in the global transport chain caused by the pandemic, which is affecting the economy across the board.
During this period, the efforts to contain fixed costs that began in 2020 continued, which explains the reduction in several items of External services and supplies.
In the nine-month period ended 30 September 2021 and 2020, External services and supplies costs incurred for investigation and research activities amounted to Euro 3,356,730 and Euro 3,364,107, respectively.
The expenses with CO2 correspond to the emission of 419,490 tons of CO2 (30 September 2020: 542,552 tons), thus observing a 23% reduction in CO2 emissions. The increase in this caption is mainly due to the rise of unit price of CO2 allowances.
Goodwill is attributed to the Group's cash generating units (CGU's), as follows:
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| CGU of UWF paper production on Figueira da Foz | ||
| (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 (goodwill resulting from the acquisition of Navigator Tissue Ródão, |
||
| S.A.) | 583,083 | 583,083 |
| 377,339,466 | 377,339,466 |
Following the acquisition of 100% of the former Soporcel - Sociedade Portuguesa de Papel, S.A. (now Navigator Brands, S.A.), for Euro 1,154,842,000, Goodwill amounting to Euro 428,132,254 was determined.
The book value of Goodwill amounts to Euro 376,756,383 as it was amortised up to 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. From that date on, depreciation ceased and was replaced by annual impairment tests.
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.
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.
| Movements in intangible assets | Industrial property and |
C O2 emission allowances |
Other intangible |
Intangible assets under |
Total |
|---|---|---|---|---|---|
| Amounts in Euro | other rights | assets | construction | ||
| Gross amount | |||||
| Balance as at 1 January 2020 | 12,329 | 4,496,487 | - | - | 4,508,816 |
| Acquisitions/Assignments | - | 16 496 529 | - | 4,335 | 16,500,864 |
| Adjustments, transfers and write-offs | 4,335 | (15,196,731) | - | (4,335) | (15,196,731) |
| Balance as at 30 September 2020 | 16,664 | 5,796,285 | - | - | 5,812,949 |
| Acquisitions/Assignments | 4,335 | 5,264,590 | - | (4,335) | 5,264,590 |
| Disposals | - | - | - | - | - |
| Adjustments, transfers and write-offs | (4,335) | 841,745 | - | 4,335 | 841,745 |
| Balance as at 31 December 2020 | 16,664 | 11,902,620 | - | - | 11,919,284 |
| Acquisitions/Assignments | - | 34,087,125 | - | 17,622 | 34,104,747 |
| Disposals | - | - | - | - | - |
| Adjustments, transfers and write-offs | 17,622 | (24,788,284) | - | (17,622) | (24,788,284) |
| Balance as at 30 September 2021 | 34,286 | 21,201,462 | - | - | 21,235,748 |
| Accumulated amortisation and impairment losses | |||||
| Balance as at 1 January 2020 | (2,127) | - | - | - | (2,127) |
| Amortisation for the period (Note 3.6) | (3,316) | - | - | - | (3,316) |
| Impairment losses for the period | - | - | - | - | - |
| Balance as at 30 September 2020 | (5,443) | - | - | - | (5,443) |
| Amortisation for the period | (1,157) | - | - | - | (1,157) |
| Balance as at 31 December 2020 | (6,600) | - | - | - | (6,600) |
| Amortisation for the period (Note 3.6) | (9,024) | - | - | - | (9,024) |
| Balance as at 30 September 2021 | (15,624) | - | - | - | (15,624) |
| Net book value as at 1 January 2020 | 10,202 | 4,496,487 | - | - | 4,506,689 |
| Net book value as at 30 September 2020 | 11,221 | 5,796,285 | - | - | 5,807,506 |
| Net book value as at 31 December 2020 | 10,064 | 11,902,620 | - | - | 11,912,684 |
| Net book value as at 30 September 2021 | 18,662 | 21,201,462 | - | - | 21,220,125 |
| 30-09-2021 | 31-12-2020 | |
|---|---|---|
| CO2 allowances (units) | 565,765 | 516,319 |
| Average unit value (Euro) | 37.47 | 23.05 |
| Market quotation (Euro) | 42.55 | 32.72 |
| 2021 | 2020 | ||||
|---|---|---|---|---|---|
| Amounts in Euro | Tons | Amount | Tons | Amount | |
| Opening balance | 516,319 | 11,902,620 | 267,222 | 4,496,487 | |
| Allowances awarded free of charge | 442,692 | 14,914,280 | 482,453 | 11,492,030 | |
| Allowances acquired | 313,598 | 19,172,846 | 510,962 | 10,269,089 | |
| Allowances sold | - | - | - | - | |
| Allowances returned to the Licensing Coordinating Entity | (706,844) | (24,788,284) | (744,318) | (14,354,986) | |
| Closing balance | 565,765 | 21,201,462 | 516,319 | 11,902,620 |
| Land | Buildings and other |
Equipment and other PPE |
Assets under construction |
Total | |
|---|---|---|---|---|---|
| Amounts in Euro | constructions | ||||
| Gross amount | |||||
| Balance as at 1 January 2020 | 115,028,864 | 539,358,347 | 3,522,159,863 | 107,798,987 | 4,284,346,061 |
| Acquisitions | - | - | 5,986,435 | 63,749,352 | 69,735,787 |
| Disposals | (466,087) | - | (44,943) | - | (511,030) |
| Adjustments, transfers and write-offs | 8,528 | 1,188,738 | 30,023,474 | (38,759,756) | (7,539,016) |
| Balance as at 30 September 2020 | 114,571,304 | 540,547,085 | 3,558,124,829 | 132,788,583 | 4,346,031,802 |
| Acquisitions | - | - | (5,986,435) | 16,889,750 | 10,903,315 |
| Disposals | (70,317) | (9,246) | (882) | - | (80,445) |
| Adjustments, transfers and write-offs | 3,577 | 702,637 | 15,620,326 | (26,252,902) | (9,926,362) |
| Balance as at 31 December 2020 | 114,504,564 | 541,240,475 | 3,567,757,837 | 123,425,431 | 4,346,928,310 |
| Acquisitions | - | - | 13,203,708 | 38,584,874 | 51,788,582 |
| Disposals | (329,746) | - | (38,364) | - | (368,110) |
| Adjustments, transfers and write-offs | 41,051 | 1,094,359 | 82,774,588 | (93,109,746) | (9,199,748) |
| Balance as at 30 September 2021 | 114,215,869 | 542,334,835 | 3,663,697,770 | 68,900,558 | 4,389,149,033 |
| Accumulated depreciation and impairment losses | |||||
| Balance as at 1 January 2020 | - | (340,877,824) | (2,693,816,638) | - | (3,034,694,462) |
| Depreciation for the period (Note 3.6) | - | (9,121,927) | (105,123,788) | - | (114,245,716) |
| Disposals | - | 44,943 | - | 44,943 | |
| Adjustments, transfers and write-offs | - | 467,248 | 6,812,816 | - | 7,280,064 |
| Balance as at 30 September 2020 | - | (349,532,503) | (2,792,082,667) | - | (3,141,615,170) |
| Depreciation for the period | - | (2,200,389) | (29,154,770) | - | (31,355,158) |
| Disposals | - | 7,918 | 882 | - | 8,800 |
| Adjustments, transfers and write-offs | - | (467,248) | 10,450,060 | - | 9,982,812 |
| Balance as at 31 December 2020 | - | (352,192,222) | (2,810,786,495) | - | (3,162,978,717) |
| Depreciation for the period (Note 3.6) | - | (8,426,308) | (78,792,689) | - | (87,218,997) |
| Disposals | - | - | 33,009 | - | 33,009 |
| Regularizações, transferências e abates | - | 472,545 | 8,866,444 | - | 9,338,989 |
| Balance as at 30 September 2021 | - | (360,145,985) | (2,880,679,730) | - | (3,240,825,715) |
| Net book value as at 1 January 2020 | 115,028,864 | 198,480,523 | 828,343,225 | 107,798,987 | 1,249,651,599 |
| Net book value as at 30 September 2020 | 114,571,304 | 191,014,582 | 766,042,162 | 132,788,583 | 1,204,416,632 |
| Net book value as at 31 December 2020 | 114,504,564 | 189,048,253 | 756,971,343 | 123,425,431 | 1,183,949,593 |
| Net book value as at 30 September 2021 | 114,215,869 | 182,188,850 | 783,018,040 | 68,900,558 | 1,148,323,317 |
As at 30 September 2021, the item Assets under construction includes investments associated with ongoing development projects, in particular those related to the redesign of the wet pulp production zone no. 4 in Aveiro (Euro 10,456 thousand), the new chip stack in Aveiro (Euro 8,038 thousand), the environmental plan (Euro 7,749 thousand), the photovoltaic power plants in Figueira da Foz and Setúbal (Euro 2,214 thousand). The remainder is related to several projects for improving and optimizing the production process.
| Buildings and | |||
|---|---|---|---|
| Land | other | Total | |
| Amounts in Euro | constructions | ||
| Gross amount | |||
| Balance as at 1 January 2020 | 424,744 | 82,307 | 507,051 |
| Acquisitions | - | - | - |
| Disposals | - | - | - |
| Balance as at 30 September 2020 | 424,744 | 82,307 | 507,051 |
| Acquisitions | - | - | - |
| - | - | - | |
| Balance as at 31 December 2020 | 424,744 | 82,307 | 507,051 |
| Acquisitions | - | - | - |
| Disposals | - | - | - |
| Balance as at 30 September 2021 | 424,744 | 82,307 | 507,051 |
| Accumulated depreciation and impairment losses | |||
| Balance as at 1 January 2020 | (399,372) | (11,797) | (411,169) |
| Impairment losses (Note 3.6) | - | (1,234) | (1,234) |
| Balance as at 30 September 2020 | (399,372) | (13,031) | (412,404) |
| Impairment losses | - | (412) | (412) |
| Balance as at 31 December 2020 | (399,372) | (13,443) | (412,815) |
| Impairment losses | - | (1,234) | (1,234) |
| Balance as at 30 September 2021 | (399,372) | (14,677) | (414,049) |
| Net book value as at 1 January 2020 | 25,372 | 70,510 | 95,882 |
| Net book value as at 31 September 2020 | 25,372 | 69,276 | 94,647 |
| Net book value as at 31 December 2020 | 25,372 | 68,864 | 94,236 |
| Net book value as at 31 September 2021 | 25,372 | 67,630 | 93,001 |
| Other lease | ||||||
|---|---|---|---|---|---|---|
| Amounts in Euro | Forestry lands | Buildings | Vehicles | Software | assets | Total |
| Gross amount | ||||||
| Balance as at 1 January 2020 | 41,463,008 | 4,547,372 | 4,508,865 | 358,732 | 189,517 | 51,067,494 |
| Acquisitions | 6,246,360 | 103,667 | 2,428,965 | 197,639 | 5,158,458 | 14,135,088 |
| Disposals | - | - | - | - | - | - |
| Adjustments, transfers and write-offs | (862,347) | - | (30,691) | (195,782) | - | (1,088,821) |
| Balance as at 31 December 2020 | 46,847,021 | 4,651,039 | 6,907,138 | 360,588 | 5,347,974 | 64,113,761 |
| Acquisitions | 2,238,347 | - | 954,766 | 963,772 | - | 4,156,886 |
| Disposals | - | - | - | - | - | - |
| Adjustments, transfers and write-offs | (435,469) | - | (23,407) | - | - | (458,877) |
| Balance as at 30 September 2021 | 48,649,898 | 4,651,039 | 7,838,497 | 1,324,361 | 5,347,974 | 67,811,770 |
| Accumulated depreciation and impairment losses | - | |||||
| Balance as at 1 January 2020 | (3,006,912) | (702,301) | (1,612,924) | (162,455) | (64,977) | (5,549,570) |
| Depreciation | (3,179,144) | (666,983) | (2,082,337) | (113,479) | (822,907) | (6,864,849) |
| Disposals | - | - | - | - | - | - |
| Adjustments, transfers and write-offs | 5,314 | - | 10,723 | 111,622 | - | 127,659 |
| Balance as at 31 December 2020 | (6,180,743) | (1,369,284) | (3,684,538) | (164,312) | (887,884) | (12,286,761) |
| Depreciation | (2,282,243) | (385,543) | (1,352,231) | (428,659) | (822,502) | (5,271,177) |
| Disposals | - | - | - | - | - | - |
| Adjustments, transfers and write-offs | 93,108 | - | - | - | - | 93,108 |
| Balance as at 30 September 2021 | (8,369,877) | (1,754,827) | (5,036,769) | (592,971) | (1,710,385) | (17,464,830) |
| Net book value as at 1 January 2020 | 38,456,095 | 3,845,071 | 2,895,941 | 196,276 | 124,539 | 45,517,924 |
| Net book value as at 30 September 2020 | 38,456,095 | 3,845,071 | 2,895,941 | 196,276 | 124,539 | 45,517,924 |
| Net book value as at 31 December 2020 | 40,666,278 | 3,281,755 | 3,222,600 | 196,276 | 4,460,091 | 51,827,000 |
| Net book value as at 30 September 2021 | 40,280,021 | 2,896,212 | 2,801,728 | 731,389 | 3,637,589 | 50,346,940 |
The item Land 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 item Buildings refers to the lease agreement entered into between The Navigator Company, S.A. and Refundos - Sociedade Gestora de Fundos de Investimento Imobiliário, S.A. for the building located at Avenida Fontes Pereira de Melo, in Lisbon, for use as an office.
The item Other includes the forklift truck rental contract signed in 2020.
| Amounts in Euro | 30-09-2021 | 30-09-2020 |
|---|---|---|
| Depreciation of property, plant and equipment for the period (Note 3.3) | 87,218,997 | 114,245,716 |
| Investment grants charged-off | (3,132,625) | (8,170,545) |
| Depreciation of property, plant and equipment, net of grants charged-off | 84,086,372 | 106,075,171 |
| Amortisation of intangible assets for the period (Note 3.2) | 9,024 | 3,316 |
| Depreciation of right-of-use assets for the period (Note 3.5) | 5,271,177 | 5,259,969 |
| Impairment of investment properties (Note 3.4) | 1,234 | 1,234 |
| 89,367,807 | 111,339,690 |
The reduction compared to the previous period is due to the change in the useful lives of the assets allocated to pulp production in Figueira da Foz, according to an evaluation report carried out by an independent entity.
| Amounts in Euro | 2021 | 2020 |
|---|---|---|
| Opening balance | 148,584,452 | 131,769,841 |
| Logging | (19,895,913) | (18,310,911) |
| Growth | 3,650,748 | 2,421,646 |
| New plantations and replanting (at cost) | 2,089,539 | 2,657,841 |
| Other changes in fair value | 7,801,774 | 9,611,452 |
| (6,353,852) | (3,619,972) | |
| Balance as at 30 June | 142,230,600 | 128,149,868 |
| Remaining quarters | 20,434,584 | |
| Balance as at 31 December | 148,584,452 |
The amount disclosed as Other changes in fair value relates mainly to expected forest management costs incurred in the period, changes in general valuation assumptions and changes in expectations compared to the annual model:
| Amounts in Euro | 30-09-2021 | 30-09-2020 |
|---|---|---|
| Costs of assets management | ||
| Forestry | 2,453,355 | 2,414,408 |
| Structure | 1,458,784 | 2,462,129 |
| Fixed and variable rents | 7,897,225 | 8,154,867 |
| 11,809,364 | 13,031,404 | |
| Changes in expectations | ||
| Variation in other species | 56,977 | 436,891 |
| Transport logistics costs | (3,608,053) | - |
| Other changes in expectations (structural costs, asset rationalisation) | (456,514) | (3,856,843) |
| (4,007,590) | (3,419,952) | |
| 7,801,774 | 9,611,452 |
In 2021, the Group revised the allocation of logistical costs of wood transportation, essentially as a function of the evolution of road diesel prices.
As at 30 September 2021 and 31 December 2020, the value of biological assets, by species, is detailed as follows:
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Eucalyptus (Portugal) | 112,723,946 | 118,916,833 |
| Pine (Portugal) | 6,493,056 | 6,311,003 |
| Cork oak (Portugal) | 6,352,850 | 6,050,894 |
| Other species (Portugal) | 648,266 | 591,289 |
| Eucalyptus (Mozambique) | 16,012,482 | 16,714,433 |
| 142,230,600 | 148,584,452 |
With regard to the Mozambique project, Navigator and the Mozambican Government continue to work under the terms of the MoU signed in 2018, namely on the conditions precedent, in particular on logistical issues relating to the Port of Macuze.
Work also started on harvesting timber from Portucel Moçambique's plantations in Manica, for export from the Port of Beira, which will make it possible, amongst other goals, to put Mozambique on the world map for this forest-based industry. In the first half of 2021, Portucel Mozambique made its first export of wood produced in Mozambique, from its plantations in Manica, with the shipment of a vessel containing 32,000 cubic metres of bark-free solid wood from the port of Beira, in Mozambique, to the port of Aveiro, bound for the Figueira da Foz Industrial Complex.
Two more ships are also scheduled for 2021, representing about 100,000 m3 of wood.
Concerning Eucalyptus, the most relevant biological asset in the financial statements, the Group extracted, in the nine-month period ended 30 September 2021, 324,895 m3 ssc of wood from its owned and explored forests (30 September 2020: 452,303 m3 ssc).
As at 31 December 2020 and 2019, (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.
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Raw materials | 98,765,354 | 92,421,384 |
| Goods | 297,582 | 268,916 |
| Subtotal | 99,062,935 | 92,690,300 |
| Finished and intermediate products | 84,996,616 | 77,760,647 |
| Products and work in progress | 2,525,734 | 3,101,026 |
| By-products and waste | 4,599,567 | 3,183,163 |
| Subtotal | 92,121,917 | 84,044,836 |
| Total | 191,184,853 | 176,735,137 |
As at 30 September 2021 and 31 December 2020, there are no inventories in which ownership is restricted and/or pledged as collateral for liabilities.
| Amounts in Euro | 2021 | 2020 |
|---|---|---|
| Balance as at 1 January | (2,157,570) | (11,121,848) |
| Increases | (3,199,757) | (341,601) |
| Reversals | 18,717 | 9,709,455 |
| Impact in profit or loss for the period | (3,181,040) | 9,367,854 |
| Charge-off | (713) | (1,004) |
| Balance as at 30 September | (5,339,323) | (1,754,998) |
| Remaining quarters | (402,572) | |
| Balance as at 31 December | (2,157,570) |
| 30-09-2021 | 31-12-2020 | ||||||
|---|---|---|---|---|---|---|---|
| Amounts in Euro | Non-curernt | Current | Total | Non-current | Current | Total | |
| Trade receivables | - | 178,013,052 | 178,013,052 | - | 133,591,397 | 133,591,397 | |
| Receivables - Group companies (Note 11.3) | - | 38 | 38 | - | 443,649 | 443,649 | |
| State | i ) |
- | 26,295,028 | 26,295,028 | - | 45,933,424 | 45,933,424 |
| Department of Commerce (EUA) | ii) | - | 1,374,623 | 1,374,623 | 3,245,517 | 6,608,333 | 9,853,850 |
| Enviva Pellets Greenwood, LLC (EUA) | iii) | 15,310,084 | 17,272,649 | 32,582,733 | 30,747,820 | 2,747,317 | 33,495,137 |
| Accrued income | iv) | - | 12,125,525 | 12,125,525 | - | 17,263,014 | 17,263,014 |
| Deferred expenses | iv) | - | 10,211,078 | 10,211,078 | - | 7,148,871 | 7,148,871 |
| Derivative financial instruments (Note 8.2.2) | - | 183,709 | 183,709 | - | 4,019,440 | 4,019,440 | |
| Other | 764,336 | 12,741,358 | 13,505,694 | 702,768 | 14,016,837 | 14,719,605 | |
| 16,074,420 | 258,217,061 | 274,291,480 | 34,696,105 | 231,772,282 | 266,468,387 |
i) State is detailed as follows:
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Value added tax - recoverable | 1,172,271 | 16,980,665 |
| Value added tax - reimbursement requests | 25,120,287 | 26,668,947 |
| Amounts pending reimbursement (tax proceeding favourable to the Group) | 2,470 | 2,283,811 |
| 26,295,028 | 45,933,423 |
As at 30 September 2021, the amount of refund requests comprised the following, by month and by company:
| Amounts in Euro | Sep / 2021 | Total |
|---|---|---|
| The Navigator Company, S.A. | 23,370,067 | 23,370,067 |
| Bosques do Atlântico, S.L. | 1,750,220 | 1,750,220 |
| 25,120,287 | 25,120,287 |
Up to issue of this report, the full amounts outstanding as at 30 September 2021 have been received.
As at 31 December 2020, the amount of reimbursement requests comprised the following, by month and by Company:
| Amounts in Euro | Nov/2020 | Dec/2020 | Total |
|---|---|---|---|
| The Navigator Company, S.A. Bosques do Atlântico, S.L. |
7,738,657 - |
16,406,001 2,374,289 |
24,144,658 2,374,289 |
| Eucaliptusland, S.A. | - | 150,000 | 150,000 |
| 7,738,657 | 18,930,290 | 26,668,947 |
All these amounts were received during the first half of 2021.
ii) As at 30 September 2021 and 31 December 2020, the balance corresponds to the amount receivable from the Department of Commerce (DoC) following the investigation initiated in 2015 of alleged dumping practices in exports of UWF paper to the United States by the subsidiary Navigator.
During 2021, the Department of Commerce confirmed the final rate to be applied for the fourth period of review from March 2019 to February 2021 at 2.21%, therefore the Group will soon receive approximately Euro 1.4 million for the difference between the deposits made and the final rate payable.
For the subsequent review periods (5 and 6), Navigator is estimated to pay to the DoC approximately Euro 4.5 million (Note 4.3).
iii) Reflects the present value of the amount still to be received from the sale of the pellet business. The nominal receivable shall bear interest at the rate of 2.5%.
iv) Accrued income and deferred expenses are detailed as follows:
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Accrued income | ||
| Interest receivable | 499,103 | 1,729,911 |
| Energy sales | 9,789,007 | 12,314,111 |
| Insurance compensation | 800,000 | 2,950,000 |
| Other | 1,037,415 | 268,992 |
| 12,125,525 | 17,263,014 | |
| Deferred expenses | ||
| Insurance | 2,119,734 | 252 |
| Rentals | 7,929,857 | 7,082,041 |
| Other | 161,487 | 66,578 |
| 10,211,078 | 7,148,871 | |
| 22,336,603 | 24,411,885 |
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Trade payables - current account | 210,052,134 | 166,359,755 |
| Trade payables - property, plant and equipment | 3,474,137 | 1,979,388 |
| State | 38,458,181 | 32,397,267 |
| Related parties (Note 10.3) | 1,185,839 | 769,888 |
| Other payables - CO2 emission allowances | 16,281,387 | 16,530,618 |
| Tax consolidation (Semapa) | 6,447,546 | 6,447,546 |
| Other payables | 1,308,508 | 516,599 |
| Derivative financial instruments (Note 8.1) | 8,335,927 | 6,196,001 |
| Accrued expenses - Payroll | 24,809,504 | 22,324,875 |
| Accrued expenses - Interest payable | 3,889,629 | 5,167,352 |
| Bonus payable to suppliers | 7,229,142 | 5,352,176 |
| Water resources tax | 838,321 | 1,104,037 |
| Rent liabilities | 15,540,351 | 13,683,172 |
| Other accrued expenses | 825,599 | 13,717,891 |
| Non-repayable grants | 8,631,048 | 11,103,125 |
| Current payables | 347,307,255 | 303,649,690 |
| Non-repayable grants | 29,441,372 | 30,234,237 |
| Department of Commerce (USA) (Note 4.2) | 4,555,922 | - |
| Non-current payables | 33,997,294 | 30,234,237 |
| 381,304,549 | 333,883,925 |
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Personal income tax witholding (IRS) | 1,756,798 | 2,765,825 |
| Value added tax | 33,538,702 | 26,852,922 |
| Social Security contributions | 2,259,239 | 2,202,862 |
| Other | 903,442 | 575,658 |
| 38,458,181 | 32,397,267 |
As at 30 September 2021 and 31 December 2020, there were no overdue debts to the State.
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Government grants | 3,231,811 | 4,997,433 |
| Grants - CO2 emission allowances | 2,496,680 | 1,425,646 |
| Other grants | 2,902,557 | 4,680,046 |
| Non-repayable grants - current | 8,631,048 | 11,103,125 |
| Government grants | 29,441,372 | 30,234,237 |
| Non-repayable grants - non-current | 29,441,372 | 30,234,237 |
| 38,072,420 | 41,337,362 |
The Navigator Company is a public company with its shares quoted on the Euronext Lisbon.
As at 30 September 2021, The Navigator Company, S.A.'s share capital of Euro 500,000,000 was fully subscribed and is represented by 711,183,069 shares without nominal value.
At the General Meeting held on 11 May 2021, a reduction of the Company's share capital from Euro 500,000,000 to Euro 495,597,957.49, the amount of the reduction being Euro 4,402,042.51, for a special purpose, by cancellation of 6,316,931 treasury shares, without par value. The Company will now have 711,183,069 ordinary shares outstanding, followed by a share capital increase from Euro 495,597,957.49 to Euro 500,000,000, the amount of the increase being Euro 4,402,042.51, with no change in the number of shares, to be paid up by incorporation of free reserves (surplus of legal reserve).
As at 30 September 2021 and 31 December 2020, the shareholders with qualified shareholdings in the Company's capital were as follows:
| 30-09-2021 | 31-12-2020 | |||
|---|---|---|---|---|
| Entity | No. of shares | % | No. of shares | % |
| Shares without nominal amount | ||||
| Semapa, SGPS, S.A. | 497,617,299 | 69.97% | 497,617,299 | 69.35% |
| Treasury shares | - | 0.00% | 6,316,931 | 0.88% |
| Floating shares | 213,565,770 | 30.03% | 213,565,770 | 29.77% |
| 711,183,069 | 100% | 717,500,000 | 100% |
| 30-09-2021 | 31-12-2020 | ||||
|---|---|---|---|---|---|
| No. of shares | Book value (Euro) |
No. of shares | Book value (Euro) |
||
| Treasury shares held at the beginning of the period | 6,316,931 | 20,189,264 | 6,316,931 | 20,189,264 | |
| Acquisition of treasury shares | - | - | - | - | |
| Disposals for the period | (6,316,931) | (20,189,264) | - | - | |
| Treasury shares held at the end of the period | - | - | 6,316,931 | 20,189,264 |
The market value of the treasury shares held on 31 December 2020 amounted to Euro 15,779,694, corresponding to a unit value of Euro 2,498.
As at 30 September 2021, the market capitalisation of the Company was Euro 2,159,151,797 (31 December 2020: Euro 1,792,315,000) compared to an equity, net of non-controlling interests, of Euro 1,037,803,047 (31 December 2020: 1,025,926,506).
| 30-09-2021 | 30-09-2020 | |
|---|---|---|
| Profit attributable to Navigator's shareholders (Euro) | 114,244,355 | 75,249,680 |
| Total number of issued shares | 711,183,069 | 717,500,000 |
| Average treasury shares in the portfolio | - | (6,316,931) |
| Weighted average number of shares | 711,183,069 | 711,183,069 |
| Basic earnings per share (Euro) | 0.161 | 0.106 |
| Diluted earnings per share (Euro) | 0.161 | 0.106 |
| % Equity |
Net profit | ||||
|---|---|---|---|---|---|
| Amounts in Euro | held | 30-09-2020 | 31-12-2020 | 30-09-2020 | 30-09-2020 |
| Raiz - Instituto de Investigação da Floresta e Papel | 3.00% | 291,325 | 275,182 | 10,448 | 12,253 |
| Portucel Moçambique | 90.02% | - | i) - |
- | - |
| 291,325 | 275,182 | 10,448 | 12,253 |
Non-controlling interests are related to RAÍZ – Instituto de Investigação da Florestal e Papel, where the Group owns 97% of the share capital and voting rights. The remaining 3% are owned by external associates.
In 2014, the Group signed agreements with IFC – Internacional Finance Corporation for the entry of this institution into the share capital of the subsidiary Portucel Moçambique, S.A., thus ensuring the construction phase of the Group's forestry project in Mozambique. In 2015, this Company performed a capital increase from MZM 1,000 million to MZM 1,680,798 million subscribing MZM 332,798 million corresponding to 19.98% of the capital at that date.
In February 2019, there was a reduction in the subscribed, underwritten and paid-up capital of the shareholder The Navigator Company, S.A. to MZM 456,596,000, corresponding to 90.02% of the Company's share capital, and the IFC's holding was revised to MZM 50,620,000, corresponding to 9.98% of the Portucel Moçambique's share capital.
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.
| Amounts in Euro | 2021 | 2020 |
|---|---|---|
| Opening balance | 275,182 | 273,817 |
| Net profit for the period | 10,448 | 2,532 |
| Other comprehensive income | 5,695 | (1,167) |
| Closing balance | 291,325 | 275,182 |
| 30-09-2021 | 31-12-2020 | |||||
|---|---|---|---|---|---|---|
| Amounts in Euro | Non-current | Current | Total | Non-current | Current | Total |
| Bond loans | 442,500,000 | 2,500,000 | 445,000,000 | 340,000,000 | 145,000,000 | 485,000,000 |
| Commercial paper | 205,000,000 | 35,000,000 | 240,000,000 | 240,000,000 | 135,000,000 | 375,000,000 |
| Bank loans | 114,017,857 | 12,718,254 | 126,736,111 | 79,305,555 | 11,527,778 | 90,833,333 |
| Charges with the issue of bonds | (3,903,478) | - | (3,903,478) | (3,449,340) | - | (3,449,340) |
| Repayable grants | 38,043,867 | 490,283 | 38,534,150 | 37,955,008 | 4,578 | 37,959,586 |
| Deferrals | (6,389,405) | - | (6,389,405) | (2,932,796) | - | (2,932,796) |
| Debt securities and bank debt | 789,268,840 | 50,708,537 | 839,977,377 | 690,878,427 | 291,532,356 | 982,410,783 |
| Average interest rate, considering | ||||||
| charges for annual fees and | 1.5% | 1.6% | ||||
| hedging operations |
In the nine-month period ended 30 September 2021, two short-term loans of Euro 40 million and Euro 25 million, which had been taken in the context of the start of the pandemic, were repaid. Two bond loans of Euro
100 and Euro 45 million and a Commercial Paper Programme of Euro 70 million were also repaid. On the other hand, two loans contracted in 2020 were disbursed, a 10-year EIB facility in the amounts of Euro 27.5 million and a 5-year bond loan of Euro 20 million. A new long-term financing of Euro 15 million was also contracted and issued.
On 5 August 2021, Navigator issued a bond loan in the amount of Euro 100 million with a five-year maturity, in exchange for the early repayment of a financing in the same amount, which had its maturity in 2023. This operation, to which a fixed rate swap was added, led to the extension of the average life of the Group's debt, as well as to a reduction of the Company's financing cost, besides representing a commitment to align with sustainability objectives.
The refundable grants include grants from AICEP - Agência para o Investimento e Comércio Externo de Portugal, as part of a number of research and development projects, which includes the grant under the investment agreement entered into with the Navigator Group subsidiary for the construction of the new Tissue plant in Aveiro. This agreement comprises a financial incentive in the form of a refundable grant, up to a maximum amount of Euro 42,166,636, without interest payment, with a grace period of two years, with the last refund happening in 2027.
| 30-09-2021 | ||||||
|---|---|---|---|---|---|---|
| Amounts in Euro | Amount | Outstanding amount | Maturity | Interest rate | Current | Non-current |
| Bond loans | ||||||
| Navigator 2015-2023 | 150,000,000 | 150,000,000 September 2023 Variable rate indexed to Euribor | - | 150,000,000 | ||
| Navigator 2019-2026 | 50,000,000 | 50,000,000 | January 2026 | Fixed rate | - | 50,000,000 |
| Navigator 2019-2025 | 50,000,000 | 50,000,000 | March 2025 | Variable rate indexed to Euribor | - | 50,000,000 |
| Navigator 2021-2026 | 20,000,000 | 20,000,000 | April 2026 | Variable rate indexed to Euribor | 2,500,000 | 17,500,000 |
| Navigator 2020-2026 | 75,000,000 | 75,000,000 December 2026 | Variable rate indexed to Euribor | - | 75,000,000 | |
| Navigator 2021-2026 | 100,000,000 | 100,000,000 | August 2026 | Variable rate indexed to Euribor | - | 100,000,000 |
| Commissions | - | (3,903,478) | - | (3,903,478) | ||
| European Investment Bank (EIB) | ||||||
| Loan EIB Energia | 24,791,667 | 24,791,667 December 2024 | Variable rate indexed to Euribor | 7,083,333 | 17,708,333 | |
| Loan EIB Cacia | 19,444,444 | 19,444,444 | May 2028 | Fixed rate | 2,777,778 | 16,666,666 |
| Loan EIB Figueira | 40,000,000 | 40,000,000 | February 2029 | Fixed rate | 2,857,143 | 37,142,857 |
| Loan EIB Biomass Boiler | 27,500,000 | 27,500,000 | March 2031 | Fixed rate | - | 27,500,000 |
| Commercial Paper Program | ||||||
| Commercial Paper Program 175M | 175,000,000 | 175,000,000 | February 2026 | Fixed rate | 35,000,000 | 140,000,000 |
| Commercial Paper Program 65M | 65,000,000 | 65,000,000 | February 2026 | Variable rate indexed to Euribor | - | 65,000,000 |
| Commercial Paper Program 75M | 75,000,000 | - | February 2026 | Variable rate indexed to Euribor | - | - |
| Commercial Paper Program 50M | 50,000,000 | - December 2025 | Variable rate indexed to Euribor | - | - | |
| Loans | ||||||
| Long-term loan | 15,000,000 | 15,000,000 | March 2026 | Variable rate indexed to Euribor | 15,000,000 | |
| Repayable grants | ||||||
| AICEP | 38,534,150 | 38,534,150 November 2027 | Fixed rate | 490,283 | 38,043,867 | |
| Deferrals | - | (6,389,405) | - | (6,389,405) | ||
| Bank credit facilities | ||||||
| Short-term facility - 20M | 20,450,714 | - | - | - | ||
839,977,377 50,708,537 789,268,840
| 31-12-2020 Amounts in Euro |
Amount | Outstanding amount | Maturity | Interest rate | Current | Non-current |
|---|---|---|---|---|---|---|
| Bond loans | ||||||
| Navigator 2015-2023 | 150,000,000 | 150,000,000 September 2023 Variable rate indexed to Euribor | - | 150,000,000 | ||
| Navigator 2016-2021 | 100,000,000 | 100,000,000 | April 2021 | Fixed rate | 100,000,000 | - |
| Navigator 2016-2021 | 45,000,000 | 45,000,000 | August 2021 | Variable rate indexed to Euribor | 45,000,000 | - |
| Navigator 2019-2026 | 50,000,000 | 50,000,000 January 2026 | Fixed rate | - | 50,000,000 | |
| Navigator 2019-2025 | 50,000,000 | 50,000,000 | March 2025 | Variable rate indexed to Euribor | - | 50,000,000 |
| Navigator 2020-2023 | 100,000,000 | 15,000,000 | August 2023 | Variable rate indexed to Euribor | 15,000,000 | |
| Navigator 2021-2026 | 20,000,000 | - | April 2026 | Variable rate indexed to Euribor | - | - |
| Navigator 2020-2026 | 75,000,000 | 75,000,000 December 2026 Variable rate indexed to Euribor | 75,000,000 | |||
| Commissions | - | (3,449,340) | - | (3,449,340) | ||
| European Investment Bank (EIB) | ||||||
| Loan EIB Ambiente B | 1,666,667 | 1,666,667 | June 2021 | Variable rate indexed to Euribor | 1,666,667 | |
| Loan EIB Energia | 28,333,333 | 28,333,333 December 2024 Variable rate indexed to Euribor | 7,083,333 | 21,250,000 | ||
| Loan EIB Cacia | 20,833,333 | 20,833,333 | May 2028 | Fixed rate | 2,777,778 | 18,055,555 |
| Loan EIB Figueira | 40,000,000 | 40,000,000 February 2029 | Fixed rate | - | 40,000,000 | |
| Loan EIB Biomass Boiler | 27,500,000 | - | - | - | - | |
| Commercial Paper Program | ||||||
| Commercial Paper Program 175M | 175,000,000 | 175,000,000 February 2026 | Fixed rate | - | 175,000,000 | |
| Commercial Paper Program 70M | 70,000,000 | 70,000,000 | April 2021 | Fixed rate | 70,000,000 | - |
| Commercial Paper Program 65M | 65,000,000 | 65,000,000 February 2026 | Variable rate indexed to Euribor | - | 65,000,000 | |
| Commercial Paper Program 75M | 75,000,000 | - February 2026 | Variable rate indexed to Euribor | - | - | |
| Commercial Paper Program 50M | 50,000,000 | - December 2025 Variable rate indexed to Euribor | - | - | ||
| Commercial Paper Program 40M | 40,000,000 | 40,000,000 | March 2021 | Variable rate indexed to Euribor | 40,000,000 | |
| Commercial Paper Program 25M | 25,000,000 | 25,000,000 | April 2021 | Variable rate indexed to Euribor | 25,000,000 | |
| Repayable grants | ||||||
| AICEP | 37,959,586 | 37,959,586 November 2027 | Fixed rate | 4,578 | 37,955,008 | |
| Deferrals | - | (2,932,796) | - | (2,932,796) | ||
| Bank credit facilities | ||||||
| Short-term facility - 20M | 20,450,714 | - | - | - |
As at 30 September 2021, the average cost of debt, considering the interest rate, annual fees and hedging operations, was 1.5% (31 December 2020: 1.6%).
The refund terms for the interest-bearing liabilities recorded as non-current are detailed as follows:
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Non-current | ||
| 1 to 2 years | 255 044 797 | 54 531 907 |
| 2 to 3 years | 107 009 083 | 263 446 294 |
| 3 to 4 years | 88 931 702 | 100 544 797 |
| 4 to 5 years | 264 390 035 | 114 461 463 |
| Above 5 years | 84 186 108 | 164 276 102 |
| 799 561 724 | 697 260 563 | |
| Commissions | (10 292 884) | (6 382 136) |
| 789 268 840 | 690 878 427 |
As at 30 September 2021, the Group had contracted Commercial Paper Programs, contracted and undisbursed long-term financing, as well as available but not used credit facilities of Euro 145,450,714 (31 December 2020: Euro 277,950,714).
As at 30 September 2021 and 31 December 2020, the Group's interest-bearing net debt was as follows:
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Interest-bearing liabilities (Note 5.7) | 839,977,377 | 982,410,783 |
| Cash and cash equivalents (Note 5.9) | (243,071,648) | (302,399,831) |
| Net interest-bearing debt | 596,905,729 | 680,010,952 |
| Lease liabilities | 52,161,322 | 53,080,919 |
| Net interest-bearing debt with lease liabilities | 649,067,051 | 733,091,871 |
Based on these Financial Statements, the financial ratios were as follows as at 30 September 2021 and 31 December 2020:
| Ratio | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Interest coverage | 22.59 | 30.62 |
| Indebtedness | 2.62 | 3.44 |
| Net Debt / EBITDA | 1.86 | 2.38 |
| 30-09-2021 | 31-12-2020 | |||||
|---|---|---|---|---|---|---|
| Outstanding | Interest on | Present value of | Outstanding | Interest on | Present value of | |
| Amounts in Euro | rents | liabilities | liabilities | rents | liabilities | liabilities |
| Below 1 year | 3,569,572 | 1,821,102 | 5,390,673 | 3,765,081 | 1,842,736 | 5,607,817 |
| 1 to 2 years | 3,083,222 | 1,684,346 | 4,767,568 | 3,370,911 | 1,702,752 | 5,073,663 |
| 2 to 3 years | 2,718,275 | 1,555,960 | 4,274,236 | 2,861,255 | 1,571,098 | 4,432,353 |
| 3 to 4 years | 2,035,561 | 1,433,867 | 3,469,428 | 2,533,056 | 1,448,561 | 3,981,617 |
| 4 to 5 years | 1,544,437 | 1,324,957 | 2,869,394 | 1,689,138 | 1,333,485 | 3,022,623 |
| Above 5 years | 22,139,615 | 9,250,408 | 31,390,023 | 21,467,905 | 9,494,941 | 30,962,846 |
| Present value of liabilities | 35,090,682 | 17,070,640 | 52,161,322 | 35,687,346 | 17,393,573 | 53,080,919 |
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Cash | 41,283 | 37,778 |
| Short-term bank deposits | 218,846,859 | 265,358,163 |
| Other short-term investments | 24,183,506 | 37,003,891 |
| 243,071,648 | 302,399,831 |
As at 30 September 2021 and 31 December 2020, the item Other short-term investments relates to the amounts invested by Navigator in a portfolio of short-term, highly liquid financial assets and issuers with adequate ratings.
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Balance as at 1 January | 982,410,783 | 877,131,386 |
| Payment of interest-bearing liabilities | (386,597,223) | (133,194,444) |
| Receipts from interest-bearing liabilities | 247,500,000 | 240,000,000 |
| Repayable grants | (2,882,045) | (1,371,910) |
| Change in charges for issuing loans | (454,138) | (154,248) |
| Variation in interest-bearing debt | (142,433,406) | 105,279,397 |
| Gross interest-bearing debt | 839,977,377 | 982,410,783 |
| Amounts in Euro | 9 months 30-09-2021 |
9 months 30-09-2020 |
|---|---|---|
| Interest paid on debt securities and bank debt | (8,382,602) | (7,425,032) |
| Commissions on loans and expenses with credit facilities | (2,483,815) | (2,789,854) |
| Interest paid by applying the effective interest method | (10,866,417) | (10,214,886) |
| Interest paid on lease liabilities | (1,513,091) | (1,511,360) |
| Financial expenses related to the Group's capital structure | (12,379,508) | (11,726,246) |
| Losses on financial instruments - foreign exchange hedging | - | - |
| Losses on financial instruments - interest rate hedging | (3,066,594) | (1,585,887) |
| Losses on financial instruments - trading | (3,954,838) | (299,032) |
| Accrual for option premiums | - | (1,092,487) |
| Other financial expenses and losses | (506,323) | (557,822) |
| Financial expenses and losses | (19,907,263) | (15,261,474) |
| Interest received on financial assets at amortised cost | 1,477,413 | - |
| Favourable exchange rate differences | 3,278,451 | 492,832 |
| Gains on financial instruments - foreign exchange hedging | 214,976 | 451,807 |
| Gains on financial instruments - hedging | - | 1,752,997 |
| Gains on compensatory interest | 2,195,880 | 2,474,247 |
| Other financial income anda gains | - | 1,026,739 |
| Financial income and gains | 7,166,720 | 6,198,622 |
| Financial results | (12,740,543) | (9,062,852) |
Financial results stood at negative Euro 12,740,543 (30 September 2020: Euro 9,062,852). This worsening, in the amount of Euro 3,677,691, results essentially from losses in derivative instruments. The costs of financing operations had a positive trend (Euro 0.4 million) due to the decrease in the average debt compared to the same period of the previous year.
| 9 months | 9 months | |
|---|---|---|
| Amounts in Euro | 30-09-2021 | 30-09-2020 |
| Current tax | 27,875,867 | 10,840,609 |
| Change in uncertain tax positions | (5,341,053) | (9,506,555) |
| Deferred tax (Note 6.2) | 7,246,246 | 13,930,135 |
| 29,781,060 | 15,264,189 |
As at 30 September 2021, current tax includes Euro 26,866,228 (30 September 2020: Euro 8,419,872) regarding the liability created under the aggregated income tax regime of The Navigator Company, S.A..
As at 30 September 2021 and 2020, the item Change in uncertain tax positions in the period reflects the favourable outcome of some proceedings related to matters with high uncertainty, as well as the change in tax estimate.
In the periods presented, the Group considers a nominal tax rate in Portugal of 27.5%, resulting from the tax legislation as follows:
| 2021 | 2020 | |
|---|---|---|
| Portugal | ||
| Nominal income tax rate | 21.0% | 21.0% |
| Municipal surcharge | 1.5% | 1.5% |
| 22.5% | 22.5% | |
| State surcharge - on taxable income between Euro 1,500,000 and Euro 7,500,000 | 3.0% | 3.0% |
| State surcharge - on taxable income 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% |
| 9 months | 9 months | |
|---|---|---|
| Amounts in Euro | 30-09-2021 | 30-09-2020 |
| Profit before tax | 144,035,863 | 90,526,122 |
| Expected tax at nominal rate (21%) | 30,247,531 | 19,010,486 |
| Municipal surcharge (2021: 1.64%; 2020: 1.58%) | 2,364,683 | 1,433,642 |
| State surcharge (2021: 4.05%; 2020: 3.91%) | 5,827,686 | 3,535,129 |
| Income tax resulting from the applicable rate | 38,439,900 | 23,979,257 |
| Nominal tax rate for the period | 26.69% | 26.49% |
| Differences (a) | (748,149) | 1,902,912 |
| Excess on income tax estimate | (7,183,618) | (9,867,025) |
| Tax benefits | (727,073) | (750,954) |
| 29,781,060 | 15,264,189 | |
| Effective tax rate | 20.68% | 16.86% |
(a) This amount concerns mainly:
| 9 months 30-09-2021 |
9 months 30-09-2020 |
|
|---|---|---|
| Gains / (Losses) for tax purposes | 2,627,814 | 583,028 |
| Gains / (Losses) for accounting purposes | (2,664,562) | (627,709) |
| Taxable provisions and impairment | 1,291,758 | 1,517,264 |
| Tax benefits | (3,073,437) | (3,144,340) |
| Post-employment benefits | (899,833) | 90,719 |
| Other | (2,280) | 8,500,717 |
| (2,720,540) | 6,919,679 | |
| Tax impact (27.5%) | (748,149) | 1,902,912 |
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Assets | ||
| Corporate income tax (IRC) | - | - |
| Amounts pending reimbursement (tax proceedings favourable to the Group) | 1,579,845 | 3,482,762 |
| 1,579,845 | 3,482,762 | |
| Liabilities | ||
| Corporate income tax (IRC) | 20,439,512 | 13,012,879 |
| Additional tax liabilities (IRC) | 25,018,303 | 22,898,753 |
| 45,457,815 | 35,911,632 |
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Income tax for the period | 27,875,867 | 25,415,652 |
| Payments on account, Special payments on account and Additional payments on account | (9,563,007) | (11,094,358) |
| Withholding tax receivable | (20,009) | (33,315) |
| Income tax payable/ (recoverable) from prior periods | - | - |
| Other receivables/ (payables) | 2,146,661 | (1,275,100) |
| 20,439,512 | 13,012,879 |
The amounts of corporate income tax paid in the period are detailed as follows:
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Income tax paid/ (received) from prior periods | 2,698,167 | (30,685,733) |
| Payments on account, Special payments on account and Additional payments on account | 9,563,007 | 11,094,358 |
| Withholding tax | 20,009 | 33,315 |
| Reimbursements of tax proceedings favourable to the Group | (2,048,511) | (6,303,952) |
| Payments of additional tax liabilities | - | 10,157,363 |
| Other income tax payments (reimbursements) | - | (3,717,791) |
| Income tax payments/ (receipts) | 10,232,671 | (19,422,440) |
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| 2013 Corporate income tax (RETGS) | 86,215 | 86,215 |
| 2010 Corporate income tax (RETGS) | 607,260 | 2,341,168 |
| 2010 to 2012 RFAI - compensatory interests | 511,555 | 469,351 |
| 2017 Corporate income tax - Navigator Tissue Rodão | 347,336 | 347,336 |
| Other | 27,479 | 238,692 |
| 1,579,845 | 3,482,762 |
The movements in the period are detailed as follows:
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Balance at the beginning of the period | 3,482,762 | 7,198,086 |
| Increases | 145,594 | 3,157,855 |
| Reimbursements | (2,048,511) | (6,303,952) |
| Reversals | - | (569,227) |
| 1,579,845 | 3,482,762 |
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Balance at the beginning of the period | 22,898,753 | 36,228,728 |
| Increases | 8,371,818 | 4,749,869 |
| Reversals | (6,252,267) | (18,079,844) |
| Amount recognised in the income statement - (gain) / loss | 2,119,551 | (13,329,975) |
| 25,018,304 | 22,898,753 |
As at 30 September 2021 and 31 December 2020, 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 | 30-09-2021 | 31-12-2020 |
|---|---|---|
| 2005 Aggregate corporate income tax | 10,394,386 | 10,394,386 |
| 2006 Aggregate corporate income tax | 8,150,146 | 8,150,146 |
| 2015 Corporate income tax - Navigator Tissue Ródão, S.A. | - | 7,586,361 |
| 2016 Aggregate corporate income tax | - | 2,697,180 |
| 2016 State surcharge | 3,761,397 | 3,761,397 |
| 2017 State surcharge | 8,462,724 | 8,462,724 |
| 2018 State surcharge | 12,223,705 | 12,223,705 |
| 42,992,358 | 53,275,899 |
| As at 1 January | Income Statement | Other | As at 30 September | |||
|---|---|---|---|---|---|---|
| Amounts in Euro | 2021 | Increases | Decreases | Equity | liabilities | 2021 |
| Temporary differences originating deferred tax assets | ||||||
| Taxed provisions | 6,974,025 | 431,284 | (1,709,955) | - | - | 5,695,354 |
| Adjustment of property, plant and equipment | 71,179,011 | 10,255,012 | (19,854,505) | - | - | 61,579,518 |
| Financial instruments | 8,879,577 | - | - | 532,042 | - | 9,411,619 |
| Deferred accounting gains on inter-Group transactions | 15,145,588 | 7,391,695 | (1,771,615) | - | - | 20,765,668 |
| Government grants | 203,588 | - | - | - | - | 203,588 |
| Conventional capital remuneration | 7,000,000 | - | (1,680,000) | 560,000 | - | 5,880,000 |
| Tax incentives for investment | 1,997,180 | - | - | - | - | 1,997,180 |
| 111,378,969 | 18,077,992 | (25,016,075) | 1,092,042 | - | 105,532,928 | |
| Temporary differences originating deferred tax liabilities | ||||||
| Pensions and post-employment benefits | (224,593) | 650 761 | - | (906,271) | - | (480,102) |
| Deferred accounting losses on inter-Group transactions | (9,929,599) | - | - | - | 10,191,596 | 261,997 |
| Valuation of biological assets | (23,121,032) | 5 904 499 | - | - | (17,216,533) | |
| Adjustment of property, plant and equipment | (272,907,547) | 2,938,217 | (29,275,942) | - | - | (299,245,272) |
| Government grants | (6,406,374) | 370,562 | - | 1,495,601 | - | (4,540,212) |
| (312,589,145) | 9,864,039 | (29,275,942) | 589,330 | 10,191,596 | (321,220,123) | |
| Deferred tax assets | 30,079,993 | 4,971,448 | (6,879,421) | 300,311 | - | 28,472,331 |
| Tax incentives for investment | 549,224 | - | - | - | - | 549,224 |
| Deferred tax assets | 30,629,217 | 4,971,448 | (6,879,421) | 300,311 | - | 29,021,555 |
| Deferred tax liabilities | (85,962,014) | 2,712,611 | (8,050,884) | 162,066 | 2,802,689 | (88,335,533) |
| As at 1 January | Income Statement | As at 31 December | |||
|---|---|---|---|---|---|
| Amounts in Euro | 2020 | Increases | Decreases | Equity | 2020 |
| Temporary differences originating deferred tax assets | |||||
| Taxed provisions | 6,793,848 | 180,177 | - | - | 6,974,025 |
| Adjustment of property, plant and equipment | 69,004,705 | 2,174,305 | - | - | 71,179,011 |
| Financial instruments | 8,525,155 | - | - | 354,422 | 8,879,577 |
| Deferred accounting gains on inter-Group transactions | 18,864,851 | - | (3,719,263) | - | 15,145,588 |
| Government grants | 203,588 | - | - | - | 203,588 |
| Conventional capital remuneration | 9,660,000 | - | (3,220,000) | 560,000 | 7,000,000 |
| 113,052,148 | 2,354,482 | (6,939,263) | 914,422 | 109,381,789 | |
| Temporary differences originating deferred tax liabilities | |||||
| Pensions and post-employment benefits | (510,040) | - | (638,963) | 924,411 | (224,593) |
| Deferred accounting losses on inter-Group transactions | (9,994,509) | 64,910 | - | - | (9,929,599) |
| Valuation of biological assets | (25,999,474) | - | 2,878,442 | - | (23,121,032) |
| Adjustment of property, plant and equipment | (249,833,138) | - | (23,074,409) | - | (272,907,547) |
| Government grants | (6,077,044) | 862,557 | - | (1,191,888) | (6,406,374) |
| (292,414,206) | 927,467 | (20,834,930) | (267,477) | (312,589,145) | |
| Deferred tax assets | 31,089,341 | 647,483 | (1,908,297) | 251,466 | 30,079,993 |
| Tax incentives for investment (Note 3.5) | 549,224 | - | - | - | 549,224 |
| Deferred tax assets | 31,638,565 | 647,483 | (1,908,297) | 251,466 | 30,629,217 |
| Deferred tax liabilities | (80,413,906) | 255,054 | (5,729,606) | (73,556) | (85,962,014) |
As at 30 September 2021 and 31 December 2020, the rate of 27.50% was used in the measurement of deferred taxes.
| 9 months | 9 months | |
|---|---|---|
| Amounts in Euro | 30-09-2021 | 30-09-2020 |
| Remuneration of Corporate bodies - fixed | 2,502,720 | 2,493,179 |
| Remuneration of Corporate bodies - variable | 1,680,255 | 7,580 |
| Other remunerations | 77,740,948 | 73,268,277 |
| Social Security contributions | 16,623,006 | 13,370,398 |
| Post-employment benefits (Note 7.2) | 1,090,114 | 1,100,354 |
| Other payroll costs | 9,662,120 | 4,116,063 |
| Payroll costs | 109,299,163 | 94,355,851 |
| 30-09-2021 | 31-12-2020 | Var. 21/20 | |
|---|---|---|---|
| Market pulp | 254 | 258 | (4) |
| UWF | 1,786 | 1,831 | (45) |
| Tissue | 379 | 380 | (1) |
| Other | 738 | 763 | (25) |
| 3,157 | 3,232 | (75) |
Other Payroll costs for the nine-month periods ended 30 September 2021 and 2020 are detailed as follows:
| 9 months | 9 months | |
|---|---|---|
| Amounts in Euro | 30-09-2021 | 30-09-2020 |
| Training | 239,176 | 253,500 |
| Social action | 1,629,965 | 712,729 |
| Insurance | 3,887,713 | 3,555,162 |
| Contractual termination compensations | 3,625,138 | (890,667) |
| Other | 280,128 | 485,338 |
| 9,662,120 | 4,116,063 |
The increase in social action expenses in 2021 is primarily due to expenses related to Covid-19 testing at the Group's units.
In 2020, due to the inability to terminate contracts as a result of joining the simplified lay-off scheme, there was a reversal of the estimates recognised in previous years.
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.
The Group has responsibilities with post-employment benefit plans for a reduced group of Employees who have chosen to maintain the defined benefit plan or who have chosen to maintain a safeguard clause, the latter
following the conversion of their plan into a Defined Contribution Plan. 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 2021, three Defined Contribution plans were in force covering 2,889 employees (2020: 2,816 employees) (Note 7.2.3).
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:
| 30-09-2021 | 31-12-2020 | |||
|---|---|---|---|---|
| No. of beneficiaries |
Amount | No. of beneficiaries |
Amount | |
| Past service liabilities | ||||
| Assets, including individual accounts | 435 | 73,906,804 | 458 | 77,829,641 |
| Former employees | 113 | 23,356,289 | 103 | 22,158,138 |
| Retired employees | 557 | 93,436,258 | 547 | 91,265,747 |
| Market value of the pension funds | (180,847,897) | (178,691,062) | ||
| Total net liabilities | 1,105 | 9,851,454 | 1,108 | 12,562,465 |
| 30-09-2021 | 31-12-2020 | |
|---|---|---|
| Social Security benefits formula | Decree-Law no. 187/2007 of 10 May | |
| Disability table | EKV 80 | EKV 80 |
| Mortality table | TV 88/90 | TV 88/90 |
| Wage growth rate | 1.00% | 1.00% |
| Technical interest rate | 1.25% | 1.25% |
| Return rate on plan assets | 1.25% | 1.25% |
| Pensions growth rate | 0.75% | 0.75% |
| Amounts in Euro | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Present value of liabilities | 151,199,735 | 154,456,240 | 179,880,752 | 191,253,527 | 190,699,351 |
| Fair value of assets and reserve account | 146,109,493 | 147,131,961 | 173,292,676 | 178,691,062 | 180,847,897 |
| Surplus/ (deficit) | (5,090,242) | (7,324,279) | (6,588,076) | (12,562,465) | (9,851,454) |
| 2021 Amounts in Euro |
Opening balance |
Remeasurement | Current services cost |
Interest expense |
Actuarial deviations |
Payments | Closing balance |
|---|---|---|---|---|---|---|---|
| Pensions with Autonomous Fund | 191,253,527 | - | 22,441 | 1,176,588 | 957,990 | (2,711,195) | 190,699,351 |
| 191,253,527 | - | 22,441 | 1,176,588 | 957,990 | (2,711,195) | 190,699,351 | |
| 2020 Amounts in Euro |
Opening balance |
Remeasurement | Current services cost |
Interest expense |
Actuarial deviations |
Payments | Closing balance |
| Pensions with Autonomous Fund | 179,880,752 | - | 67,304 | 3,098,478 | 13,875,538 | (5,668,545) | 191,253,527 |
| 179,880,752 | - | 67,304 | 3,098,478 | 13,875,538 | (5,668,545) | 191,253,527 |
Funds allocated to the defined benefit pension plans - evolution
| Amounts in Euro | 2021 | 2020 |
|---|---|---|
| Balance as at 1 January | 178,691,062 | 173,292,676 |
| Charge for the period | 1,000,000 | - |
| Expected income for the period | 1,097,792 | 1,492,235 |
| Remeasurement | 2,923,621 | (1,738,904) |
| Pensions paid | (2,711,195) | (2,596,185) |
| Other changes | (153,383) | (153,382) |
| Balance as at 30 June | 180,847,897 | 170,296,440 |
| Remaining quarters | 8,394,622 | |
| Balance as at 31 December | 178,691,062 |
The assets of the pension fund related to the defined benefit plan are under the management of Schroders, BlackRock and Credit Suisse, as detailed below:
| Amounts in Euro | 2021 | 2020 |
|---|---|---|
| Defined benefit and Conta 1 : | ||
| Ocidental - Pensions | 681,187 | 4,358,496 |
| Schroders | 70,858,992 | 68,356,435 |
| BlackRock | 71,582,350 | 66,399,325 |
| Conta 1 - Credit Suisse | 37,725,368 | 39,576,805 |
| Total Defined benefit and Conta 1 | 180,847,897 | 178,691,062 |
Funds allocated to defined benefit plans - composition of assets
| Amounts in Euro | 30-09-2021 | % | 31-12-2020 | % |
|---|---|---|---|---|
| Listed securities in active market | ||||
| Bonds | 112,104,449 | 62.0% | 110,570,981 | 61.9% |
| Shares | 49,236,102 | 27.2% | 47,196,654 | 26.4% |
| Public debt | 14,628,810 | 8.1% | 12,142,648 | 6.8% |
| Liquidity | 4,197,349 | 2.3% | 4,480,780 | 2.5% |
| Other short-term investments | 681,187 | 0.4% | 4,300,000 | 2.4% |
| 180,847,897 | 100% | 178,691,062 | 100% |
The assets of the pension fund do not include any assets of the Group.
As at 30 September 2021 and 31 December 2020, two defined contribution plans were in force for most of the employees.
The assets of the pension fund that finance the defined contribution plans are under the management of the BMO, as detailed below:
| No. of | Profitability | No. of | Profitability | |||
|---|---|---|---|---|---|---|
| Amounts in Euro | beneficiaries | % | 2021 | beneficiaries | % | 2020 |
| Defined contribution (BMO): | ||||||
| Defensive sub-fund | 113 | 0.55% | 8,073,775 | 128 | 3.52% | 9,063,068 |
| Conservative sub-fund | 383 | 2.32% | 19,705,770 | 391 | 4.05% | 19,684,340 |
| Dynamic sub-fund | 687 | 4.91% | 16,720,640 | 685 | 4.57% | 15,440,179 |
| Aggressive sub-fund | 1,706 | 7.99% | 5,978,512 | 1,612 | 4.34% | 5,163,381 |
| Total Defined contribution | 2,889 | 50,478,697 | 2,816 | 49,350,968 |
The effect of these plans in the income statement for the nine-month periods ended 30 September 2021 and 2020 was as follows:
| Amounts in Euro | 9 months 30-09-2021 |
9 months 30-09-2020 |
|---|---|---|
| Defined benefit plans | ||
| Current services | 22,441 | 33,652 |
| Interest expenses | 1,176,588 | 1,549,230 |
| Expected return on plan assets | (1,097,792) | (1,492,235) |
| Waiver of liabilities | - | - |
| 101,237 | 90,647 | |
| Defined contribution plan | ||
| Contributions of the period | 988,877 | 1,009,707 |
| 988,877 | 1,009,707 | |
| Costs for the period | 1,090,114 | 1,100,354 |
| 30-09-2021 | 31-12-2020 | ||||||
|---|---|---|---|---|---|---|---|
| Amounts in Euro | Trading derivatives |
Hedging derivatives |
Net total | Trading derivatives |
Hedging derivatives |
Net total | |
| Opening balance | 3,160,131 | (5,336,692) (2,176,560) | 536,035 | (4,316,491) (3,780,456) | |||
| New contracts / settlements | (623,573) | 3,566,626 | 2,943,053 | 623,573 | 2,982,135 | 3,605,708 | |
| Change in fair value through profit or loss | (3,954,838) | (2,851,618) | (6,806,456) | 2,000,523 | (3,647,914) | (1,647,391) | |
| Change in fair value through other comprehensive income | - | (2,112,255) | (2,112,255) | - | (354,422) | (354,422) | |
| Closing balance | (1,418,280) | (6,733,938) | (8,152,218) | 3,160,131 | (5,336,692) (2,176,561) |
| 30 September 2021 Amounts in Euro |
Notional | Currency | Maturity | Positive (Note 4.2) |
Negative (Note 4.3) |
Net total |
|---|---|---|---|---|---|---|
| Hedging | ||||||
| Hedging (future sales) | 99,500,000 | USD | 2021 | - | (1,872,291) | (1,872,291) |
| Hedging (future sales) | 18,000,000 | GBP | 2021 | - | (538,659) | (538,659) |
| Interest rate swaps - Bonds | 375,000,000 | EUR | 2026 | 160,007 | (3,800,843) | (3,640,836) |
| BHKP Pulp | 2,280,000 | USD | 2021 | - | (682,151) | (682,151) |
| 160,007 | (6,893,945) (6,733,938) | |||||
| Trading | ||||||
| Foreign exchange forwards (future sales) | 125,731,678 | USD | 2023 | - | (1,441,982) | (1,441,982) |
| Foreign exchange forwards (future sales) | 7,325,000 | GBP | 2021 | 23,488 | - | 23,488 |
| Foreign exchange forwards (future sales) | 400,000 | CHF | 2021 | 214 | - | 214 |
| 23,702 | (1,441,982) (1,418,280) | |||||
| 183,709 | (8,335,927) (8,152,218) | |||||
| 31 December 2020 Amounts in Euro |
Notional | Currency | Maturity | Positive (Note 4.2) |
Negative (Note 4.3) |
Net total |
| Hedging | ||||||
| Hedging (future sales) | 204,000,000 | USD | 2021 | 831,818 | (668) | 831,149 |
| Hedging (future sales) | 72,000,000 | GBP | 2021 | - | (515,688) | (515,688) |
| Interest rate swaps - Bonds | 200,000,000 | EUR | 2025 | - | (5,501,229) | (5,501,229) |
| BHKP Pulp | 9,120,000 | USD | 2021 | - | (150,926) | (150,926) |
| 831,818 | (6,168,511) (5,336,693) | |||||
| Trading | ||||||
| Foreign exchange forwards (future sales) | 100,228,946 | USD | 2023 | 2,564,049 | - | 2,564,049 |
| Foreign exchange forwards (future sales) | 5,425,000 | GBP | 2021 | - | (27,345) | (27,345) |
| Foreign exchange forwards (future sales) | 225,000 | CHF | 2021 | (146) | (146) | |
| Future purchase of CO2 allowances (Note 3.2) | 2,545,625 | EUR | 2021 | 623,573 | - | 623,573 |
| 3,187,622 4,019,440 |
(27,491) (6,196,001) (2,176,562) |
3,160,131 |
Cash flow hedge | Exchange rate risk EUR/USD and EUR/GBP
In this context, during the last quarter of 2020, the Group contracted several financial structures to cover the portion of the net foreign exchange exposure of estimated sales in USD for 2021, which is estimated at about USD 292,000,000. The derivative financial instruments are Zero Cost Collar, in an amount of USD 204,000,000 and GBP 72,000,000, which expire on 31 December 2021.
During January 2021, the Group concluded the contracting of derivative financial instruments by acquiring USD 88,000,000 in Zero Cost Collar, thus guaranteeing total coverage of the estimated value of exposure for 2021.
During the last quarter of 2020, the Group made a partial amortisation of Euro 50,000,000, related to the Navigator 2015-2023 bond loan, also performing the settlement of the associated IRS.
During the first quarter, the Group increased its interest rate hedges, by contracting a swap in the amount of Euro 75,000,000 to set the interest rate associated with the Navigator 2020-2026 bond loan, of the same amount. At the end of the second quarter, the Group contracted a new interest rate hedge, in the amount of Euro 100,000,000, to set the interest rate associated to the Navigator 2021-2026 bond loan, starting in August 2021.
As in the previous year, the Group periodically monitors its exposure to the price of BHKP pulp.
During the fourth quarter of 2020, the Group opted to acquire a financial instrument to hedge the pulp price, by contracting a swap to set the price of 12,000 tons of pulp for the next 12 months, ended 31 December 2021.
| Amounts in Euro | Legal proceedings |
Other | Total |
|---|---|---|---|
| 1 January 2020 | 5,506,894 | 14,441,452 | 19,948,347 |
| Increases | 2,050,968 | 452,308 | 2,503,276 |
| Reversals | (2,978,870) | - | (2,978,870) |
| Impact in profit or loss for the period | (927,902) | 452,308 | (475,594) |
| Exchange rate adjustment | (91,110) | - | (91,110) |
| Other transfers and adjustments | - | 1,177,318 | 1,177,318 |
| 30 September 2020 | 4,487,882 | 16,071,078 | 20,558,961 |
| Increases | 115,729 | 2,670,152 | 2,785,881 |
| Reversals | - | - | - |
| Impact in profit or loss for the period | 115,729 | 2,670,152 | 2,785,881 |
| Exchange rate adjustment | 64,493 | - | 64,493 |
| Other transfers and adjustments | - | - | - |
| 31 December 2020 | 4,668,104 | 18,741,230 | 23,409,335 |
| Increases | 716,191 | - | 716,191 |
| Reversals | (348,445) | (512,064) | (860,510) |
| Impact in profit or loss for the period | 367,746 | (512,064) | (144,318) |
| Exchange rate adjustment | (16,250) | - | (16,250) |
| Other transfers and adjustments | 271,640 | - | 271,640 |
| 30 September 2021 | 5,291,240 | 18,229,166 | 23,520,407 |
No refunds of any nature are expected in respect of these provisions.
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Guarantees provided | ||
| Navigator guarantees for EIB loans | 49,236,111 | 56,666,667 |
| Portuguese Tax Authorities (AT) | 6,513,318 | 15,264,923 |
| IAPMEI | 1,280,700 | 1,280,701 |
| Customs clearance - USA | - | 5,671,909 |
| Customs clearance | 1,250 | 1,250 |
| Spanish State Tax Agency | 1,033,204 | 1,033,204 |
| Portuguese Environment Agency | 1,565,104 | 1,141,618 |
| Simria | 338,829 | 338,829 |
| Other | 684,650 | 700,971 |
| 60,653,166 | 82,100,072 |
| Amounts in Euro | 30-09-2021 | 31-12-2020 |
|---|---|---|
| Purchase commitments | ||
| Property, plant and equipment - Manufacturing equipment Wood |
34,410,987 | 9,367,666 |
| Commitments to acquisitions in the subsequent period | 61,200,000 | 191,698,539 |
| Commitments to long-term acquisitions | 164,500,000 | 79,200,000 |
| 260,110,987 | 280,266,205 |
| Share equity owned | ||||||
|---|---|---|---|---|---|---|
| 30-09-2021 | 31-12-2020 | |||||
| Company | Head Office | Direct | Indirect | Total | Total | Main business activity |
| Parent Company: The Navigator Company, S.A. Subsidiaries: |
Portugal | - | - | - | - Sale of paper and pulp | |
| Navigator Brands , S.A. | Portugal | 100.00 | - | 100.00 | 100.00 | Acquisition, exploitation, lease or concession of the use and disposal of trademarks, patents and other industrial or intelectual property |
| Navigator Parques Industriais, S.A. | Portugal | 100.00 | - | 100.00 | 100.00 Industrial real estate management | |
| Navigator Paper Figueira, S.A | Portugal | 100.00 | - | 100.00 | 100.00 Paper production | |
| Empremedia RE , AC | Ireland | 100.00 | - | 100.00 | 100.00 Insurance mediation and consultancy | |
| Raiz - Instituto de Investigação da Floresta e Papel | Portugal | 97.00 | - | 97.00 | 97.00 Applied research in the field of pulp and paper industry and forest activity |
|
| Raiz Ventures , SA | Portugal | - | 97.00 | 97.00 | 97.00 | Promotion of business units directly or indirectly related to research, development and innovation activities in the field of forest-based bioeconomy |
| About the Future - Essential Oils, SA | Portugal | - | 97.00 | 97.00 | 97.00 Production, rectification adn wholesale of essential oils | |
| Enerpulp – Cogeração Energética de Pasta, S.A. | Portugal | 100.00 | - | 100.00 | 100.00 Energy production | |
| Navigator Pulp Figueira, S.A. | Portugal | 100.00 | - | 100.00 | 100.00 Production of pulp and rendering of administration, management and internal advisory services |
|
| Ema Cacia - Engenharia e Manutenção Industrial, ACE |
Portugal | - | 74.20 | 74.20 | 74.20 | |
| Ema Setúbal - Engenharia e Manutenção Industrial, ACE |
Portugal | - | 80.20 | 80.20 | 80.20 | Rendering of industrial maintenance services |
| Ema Figueira da Foz- Engenharia e Manutenção Industrial, ACE |
Portugal | - | 79.80 | 79.80 | 79.80 | |
| Navigator Pulp Setúbal, S.A. | Portugal | 100.00 | - | 100.00 | 100.00 Production of pulp | |
| Navigator Pulp Aveiro, S.A. | Portugal | 100.00 | - | 100.00 | 100.00 Production of pulp | |
| Navigator Tissue Aveiro, S.A. | Portugal | 100.00 | - | 100.00 | 100.00 | |
| Navigator Tissue Ródão , S.A. | Portugal | - | 100.00 | 100.00 | 100.00 | Production of tissue paper |
| Navigator Tissue Iberica , S.A. | Spain | - | 100.00 | 100.00 | 100.00 Sale of tissue paper | |
| Portucel Moçambique - Sociedade de | Mozambique | 90.02 | - | 90.02 | 90.02 Forestry production | |
| Desenvolvimento Florestal e Industrial, Lda Navigator Internacional Holding SGPS, S.A. |
Portugal | 100.00 | - | 100.00 | 100.00 Management of shareholdings | |
| Navigator Financial Services sp . Zoo * | Poland | 25.00 | 75.00 | 100.00 | 100.00 Financial services | |
| Navigator Forest Portugal, S.A. | Portugal | 100.00 | - | 100.00 | 100.00 Forestry production | |
| EucaliptusLand, S.A. Sociedade de Vinhos da Herdade de Espirra - |
Portugal | - | 100.00 | 100.00 | 100.00 Forestry production | |
| Produção e Comercialização de Vinhos, S.A. | Portugal | - | 100.00 | 100.00 | 100.00 Wine production | |
| Gavião - Sociedade de Caça e Turismo, S.A. | Portugal | - | 100.00 | 100.00 | 100.00 Management of hunting resources | |
| Afocelca - Agrupamento complementar de empresas para protecção contra incêndios, ACE |
Portugal | - | 64.80 | 64.80 | 64.80 Rendering of forest fire prevention and fighting services | |
| Viveiros Aliança - Empresa Produtora de Plantas, S.A. |
Portugal | - | 100.00 | 100.00 | 100.00 Production of plants in nurseries | |
| Atlantic Forests, S.A. | Portugal | - | 100.00 | 100.00 | 100.00 Rendering of services within the scope of forestry activity | |
| Bosques do Atlantico, SL | Spain | - | 100.00 | 100.00 | and trade in timber 100.00 Wood, biomass and forestry trade |
|
| Navigator Africa, SRL | Italy | - | 100.00 | 100.00 | 100.00 Wood, biomass and forestry trade | |
| Navigator Paper Setúbal , S.A. | Portugal | 100.00 | - | 100.00 | 100.00 Paper and energy production | |
| Navigator North America Inc. | USA | - | 100.00 | 100.00 | 100.00 Sale of paper | |
| Navigator Afrique du Nord | Morocco | - | 100.00 | 100.00 | 100.00 | |
| Navigator España, S.A. | Spain | - | 100.00 | 100.00 | 100.00 | |
| Navigator Netherlands, BV | The Netherlands | - | 100.00 | 100.00 | 100.00 | |
| Navigator France, EURL | France | - | 100.00 | 100.00 | 100.00 | |
| Navigator Paper Company UK, Ltd | United Kingdom | - | 100.00 | 100.00 | 100.00 | |
| Navigator Italia, SRL | Italy | - | 100.00 | 100.00 | 100.00 | |
| Navigator Deutschland, GmbH | Germany | - | 100.00 | 100.00 | 100.00 | Rendering of sales brokerage services |
| Navigator Paper Austria, GmbH | Austria | - | 100.00 | 100.00 | 100.00 | |
| Navigator Paper Poland SP Z o o | Poland | - | 100.00 | 100.00 | 100.00 | |
| Navigator Eurasia Navigator Rus Company, LLC * |
Turkey Russia |
- - |
100.00 100.00 |
100.00 100.00 |
100.00 100.00 |
|
| Navigator Paper Mexico | Mexico | 25.00 | 75.00 | 100.00 | 100.00 | |
| Navigator Middle East Trading DMCC | Dubai | - | 100.00 | 100.00 | 100.00 | |
| Navigator Egypt, ELLC | Egypt | 1.00 | 99.00 | 100.00 | 100.00 | |
| Empremédia - Corretores de Seguros, S.A. | Portugal | 100.00 | - | 100.00 | 100.00 Insurance mediation and consultancy | |
| Navigator Abastecimento de Madeira, ACE | Portugal | 97.00 | 3.00 | 100.00 | 100.00 Sale of wood |
* Company liquidated in 2021 (Note 10.2)
| Share equity owned | ||||||
|---|---|---|---|---|---|---|
| 30-09-2021 | 31-12-2020 | |||||
| Company | Head Office | Direct | Indirect | Total | Total | Main business activity |
| Pulpchem Logistics, A.C.E. | Portugal | 50.00 | - | 50.00 | 50.00 Purchases of materials, consumables and services used in the pulp and paper producton process |
|
During the nine-month period ended 30 September 2021, the consolidation perimeter was changed from the previous period by the liquidation of the following companies:
Navigator Financial Services sp . Zoo;
Navigator Rus Company, LLC
| 30-09-2021 | 31-12-2020 | ||||||
|---|---|---|---|---|---|---|---|
| Amounts in Euro | Receivables (Note 4.2) |
Payables (Note 4.3) |
Lease liabilities (Note 5.5) |
Receivables (Note 4.2) |
Payables (Note 4.3) |
Lease liabilities (Note 5.5) |
|
| Shareholders (Note 5.2) | |||||||
| Semapa - Soc. de Investimento e Gestão, SGPS, S.A. | 38 | 7,470,630 | - | - | 7,001,046 | - | |
| Other subsidiaries of the Semapa Group | |||||||
| Secil - Companhia Geral Cal e Cimento, S.A. | - | 66,005 | - | 443,648 | 35,503 | - | |
| Secil Britas, S.A. | - | 81,240 | - | - | 86,954 | - | |
| Secil Prebetão, S.A. | - | 5,475 | - | - | - | - | |
| CMP ‐ Cimentos Maceira e Pataias, S.A. | - | 2,547 | - | - | 23,682 | - | |
| Unibetão, S.A. | - | 7,488 | - | - | 66,595 | - | |
| Other related parties | |||||||
| Sonagi Imobiliária, S.A. | - | - | - | - | - | 188,841 | |
| Hotel Ritz, S.A. | - | - | - | - | 3,654 | - | |
| 38 | 7,633,385 | - | 443,649 | 7,217,434 | 188,841 |
| 9 months | 9 months | |||||||
|---|---|---|---|---|---|---|---|---|
| 30-09-2021 | 30-09-2020 | |||||||
| Amounts in Euro | Purchase of goods and services |
Sales and services rendered |
Other operating expenses |
Purchase of goods and services |
Sales and services rendered |
Other operating expenses |
Financial (expenses) / income |
|
| Shareholders (Note 5.2) | ||||||||
| Semapa - Soc. de Investimento e Gestão, SGPS, S.A. | 7,547,845 | 34 | - | 6,790,621 | - | 9,217 | - | |
| 7,547,845 | 34 | - | 6,790,621 | - | 9,217 | - | ||
| Other subsidiaries of the Semapa Group | ||||||||
| Secil - Companhia Geral Cal e Cimento, S.A. | 105,687 | 15,750 | - | 50,847 | 12,000 | - | - | |
| Secil Britas, S.A. | 181,544 | - | - | 33,261 | - | - | - | |
| Secil Prebetão, S.A. | 5,475 | - | - | - | - | - | - | |
| CMP ‐ Cimentos Maceira e Pataias, S.A. | 8,695 | - | - | 36,303 | - | - | - | |
| Unibetão, S.A. | 5,753 | - | - | 78,684 | - | - | - | |
| 307,155 | 15,750 | - | 199,095 | 12,000 | - | |||
| Other related parties | ||||||||
| Sonagi Imobiliária, S.A. | - | - | - | - | - | - | (732) | |
| Refundos - Soc. Gestora de Fundos de Inv. Imobiliário, S.A. | - | - | - | - | - | - | - | |
| Hotel Ritz, S.A. | 18,192 | - | - | 4,224 | - | - | - | |
| 18,192 | - | - | 4,224 | - | - | (732) | ||
| 7,873,192 | 15,784 | - | 6,993,940 | 12,000 | - | (732) |
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 69.4% 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.
A lease agreement was also entered into between Navigator Brands, S.A. (formerly called Navigator Paper Figueira, S.A.) and Cimilonga – Imobiliária, S.A. under which an office was leased in Semapa SGPS, SA headquarters' building, in Lisbon, which was terminated in 2020.
The Navigator Company, SA and Refundos - Sociedade Gestora de Investimentos Imobiliário, SA, also entered into a lease agreement beginning on 1 June 2017 and ending on 31 May 2027, automatically renewable for a 5-year period, regarding the lease of an office building located in Lisbon, Avenida Fontes Pereira de Melo. Since the Company was sold to a third party, it is no longer considered a related party in 2020.
In the identification of the Navigator Company Group's related parties for the purpose of financial reporting, the members of the Navigator Company Group's Board of Directors and other corporate bodies were considered as related parties.
João Nuno de Sottomayor Pinto de Castello Branco Board of Directors Chairman
António José Pereira Redondo Chairman of the Executive Board
Adriano Augusto da Silva Silveira Executive Board Member
José Fernando Morais Carreira de Araújo Executive Board Member
Nuno Miguel Moreira de Araújo Santos Executive Board Member
João Paulo Araújo Oliveira Executive Board Member
João Paulo Cabete Gonçalves Lé Executive Board Member
Manuel Soares Ferreira Regalado Member
Maria Teresa Aliu Presas Member
Mariana Rita Antunes Marques dos Santos Member
Ricardo Miguel dos Santos Pacheco Pires Member
Sandra Maria Soares Santos Member
Vítor Manuel Rocha Novais Gonçalves Member
Vítor Paulo Paranhos Ferreira Member
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