During the quarter, 160.8 million reais were invested in Açu Port. Adding up all capex disbursed since 2007, 10.1 billion reais have been invested in the enterprise, with 6.4 billion reais coming from Porto do Açu Operações (Prumo Logística subsidiary) and 3.7 billion reais from Ferroport (a joint venture by Prumo and Anglo American) and Anglo American. The amounts do not contemplate capitalized interest.
“The start of 2016 was even more challenging than in 2015, with a crisis in the oil and gas industry and political and economic uncertainties domestically. But the beginning of operations of new terminals at Açu Port opens up a new perspective for our clients, as well as for the whole Northern region of Rio de Janeiro state,” said Prumo CFO Eugenio Figueiredo.
Operating since October 2014, Açu Port welcomed 143 vessels in the first three months of 2016, with more than 30 dedicated to iron ore.
Results
During 1Q16, 160.8 million reais were invested in Açu Port, with 43.6 million reais (not including capitalized interest) deployed mostly on Terminal 1 in the construction of breakwater and dredging works to increase depth to 20.5 meters. The remainder was deployed in construction works on the Oil Terminal (T-OIL), Multicargo Terminal (T-MULT), development of Terminal 2 (T2), and in the overall infrastructure of the enterprise.
Capex for 2016 is estimated at 750 million reais, with 360 million reais coming from Açu Petróleo and 390 million reais from Porto do Açu and other companies owned by Prumo.
During the period, net revenues by Prumo reached 30.5 million reais, increasing from one year earlier thanks mostly to new contracts signed during 2015.
In December 2015, Prumo changed the accounting treatment of Ferroport, which was previously accounted for as a joint operation for a joint venture. After the change, Ferroport results are no longer consolidated proportionally and are now recognized as equity income.
Financial results were impacted by increasing debt and by the start of operations, as financial expenses were no longer capitalized and are now shown in the earnings report. Financial revenues were favorably impacted by exchange rate fluctuations amounting to 127.5 million reais, due to dollar-denominated debt and conversion into Brazilian reais of figures posted by Açu Petróleo S.A., which uses the U.S. dollar as functional currency.
Financial expenses totaled 193.3 million reais, driven by interest, brokerage fees and monetary fluctuations. Financial revenues reached 184 million reais, made up mostly of interest on loans, returns on financial investments and exchange rate fluctuations. Net income in 1Q16 totaled 22.8 million reais. Administrative expenses fell to 28.4 million reais, or about 100 thousand reais less than one year earlier.
Cash and cash equivalents amounted to 475.2 million reais by the end of the quarter and net debt stood at 3.8 billion reais, including interest and monetary correction. Debt levels reflect refinancing of debt owed to Bradesco, Santander and BNDES, fully extended to the long run.
Highlights during the quarter
Operations started in the Brasil Port Logística Offshore unit, owned by Edison Chouest. Petrobras, which signed a contract to use six berths at the base, is the unit’s first client. The oil company is migrating to the port some operations that are executed in other locations. Brasil Port expects to create 180 jobs in this first phase. Located on the right-hand side margin of the channel on Terminal 2 (Onshore Terminal), the Edison Chouest facility will be the world’s largest offshore support base. With a total area of 597,400 m² and 1,030 meters of quayside, the unit has 15 mooring berths and a shipyard for repairing its own and third-party vessels.
Prumo and Açu Port were recognized in the IJGlobal Americas Awards 2015, held in New York in March. The enterprise was named “Deal of the Year” in the Latin American Ports category, for its debt renegotiations with Bradesco, Santander, BNDES and FI-FGTS last year. The event was organized by IJ Global (formerly known as Euromoney) and grants the most important awards in the international project finance market. It gathered representatives from the Americas and awarded infrastructure and energy projects recognized for their excellence, achievements and innovation.
In February, Technip manufactured a 16 inch-flexible line to serve Petrobras in exploring the pre-salt ocean layer. Two vessels moored at the company’s terminal, one for loading the structure (Sapura Diamante) and another to support hoisting (Sapura Topázio). T-MULT operators were responsible for tying the vessels. The operation took 8 days and the ship sailed to the Santos Basin.
Another highlight is the development of a specific area for driller mooring and transshipment of byproducts. Located on the South Pier of Terminal 2 (Onshore Terminal), the area will have 14.5 meters in depth and 450 meters of quayside. The Terminal for Vessel Support and Maintenance and the Terminal for Liquid Transshipment will be installed on the sheltered area, on the internal side of the South breakwater of Terminal 2. Planning and subsequent installation of chests (superstructure construction) will enable utilization of the breakwater itself as quayside, optimizing costs and increasing the port’s mooring capacity. The South Pier is going through an environmental licensing process. Construction started in March and operations will begin by year-end.
