January 29, 2018 / 10:46 PM / a year ago

UPDATE 1-Brazil's Fibria trims 2018 capex as Horizonte 2 ramps up

(Recasts with capex estimate, details of earnings)

SAO PAULO, Jan 29 (Reuters) - Brazilian pulpmaker Fibria Celulose SA plans to trim investments by a fifth this year as production ramps up at its new Horizonte 2 plant, adding to what the company forecast would be a slow increase in global wood pulp output in coming months.

Fibria said in a securities filing on Monday it was budgeting 3.7 billion reais ($1.2 billion) for capital spending this year, including 444 million reais for Horizonte 2, down from total investments of 4.67 billion reais in 2017.

The outlook came as the world's largest producer of eucalyptus pulp reported fourth-quarter net income of 280 million reais, reversing a loss of 92 million reais a year earlier due to stronger pulp prices and currency effects.

Fibria's earnings before interest, taxes, depreciation and amortization (EBITDA) nearly tripled from a year earlier to 1.808 billion reais, compared with the consensus estimate of 1.914 billion reais compiled by Thomson Reuters.

The company sold a record 6,212 tonnes of pulp last year as Horizonte 2 came online. Fibria reduced its leverage from 3.2 to 2.4 times EBITDA, prepaying some of its debt.

Because most of Fibria's debt is denominated in dollars, the depreciation of Brazil's currency — such as a 5 percent slide in the fourth quarter and a more dramatic swing a year earlier — weighs on short-term earnings, although it provides long-term benefits to the company's export-focused business model.

$1 = 3.15 reais Reporting by Tatiana Bautzer; Editing by Marguerita Choy and Susan Thomas

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