CIMENTO TUPI S.A.
MANAGEMENT REPORT - DECEMBER 31, 2014
Dear Shareholders:
In compliance with legal requirements and regulations, Cimento Tupi S.A. (“Company”)
submits to your appreciation its Management Report and the financial statements for the year
ended December 31, 2014.
1 - OPERATIONS
The Company’s business purpose includes manufacturing, selling and transporting
cement, lime and mortar of all types at the plants located in Volta Redonda - Rio de Janeiro
State, Pedra do Sino - Minas Gerais State and Mogi das Cruzes - São Paulo State; exploring
mineral deposits and using extracted products for cement manufacturing; rendering concretepaving services; and holding ownership interests in other companies.
2 - CEMENT INDUSTRY
The growing demand for cement in the country contributed to an increase in the prices
presented by the Company from 2010 to 2013. In 2014, the average sales price was stable in
relation to 2013 due to the downturn in civil construction activities as a result of the economic
measures imposed by the Brazilian government.
Price of Cement + Clinker – Company
292,54
291,10
2013
2014
286,59
281,38
266,59
2010
2011
2012
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3 - COMPANY’S SALES PERFORMANCE
In 2014, the volume of goods sold improved over 2013 due to the start up of operations
of the Company’s new production line in June 2013, together with an increase in the sales
force. Cement sales increased by 192 thousand tons and clinker sales grew by 89 thousand
tons, representing 11.23% and 69.00% of the total sales volume, respectively.
CEMENT SHIPMENT PER REGION (thousand tons)
2014
2013
Cement (tons)
1,901 1,709
Clinker (tons)
218
129
4 - COMPANY’S CONSOLIDATED ECONOMIC AND FINANCIAL PERFORMANCE
Operating revenue
The Company’s net sales totaled R$470,621 thousand in 2014 and R$394,415 thousand
in 2013, representing a 19.32% increase.
Gross Profit and Ebitda
The Company’s consolidated gross profit was R$141,460 thousand in 2014 and
R$116,103 thousand in 2013. Ebitda totaled R$119,994 thousand in 2014 and R$91,717
thousand in 2013, which represents an increase of 30.83%.
(R$ million)
Gross profit
Selling Expenses
General and administrative expenses
Key management personnel compensation
Other operating income (expenses)
Operating profit*
Depreciation, amortization and depletion
Non-recurring expenses (income)
EBITDA
* Before financial income and expenses
2014
141
(12)
(37)
(7)
3
88
19
12
119
2013
116
(9)
(26)
(7)
4
78
11
3
92
Net income (loss) for the year
In 2014, the Company reported losses of R$45,533 thousand derived substantially from
the devaluation of the Brazilian real against the U.S. dollar. Financial expenses associated with
this devaluation amounted to R$59,827 thousand in 2014.
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5 - INVESTMENTS
The Company incurred capital expenditures totaling R$35,127 thousand in 2014,
including R$17,211 thousand in the production line, R$2,411 thousand in logistics, R$6,372
thousand in new projects, R$3,272 thousand in administrative activities, among other initiatives.
6 - ENVIRONMENT
In 2014, the Company invested some R$931 thousand in environmental projects and
initiatives at its manufacturing units, such as Semana do Meio Ambiente (Environment Week),
Programa de Educação Ambiental (Environmental Education Program), Projeto de
Recuperação de Áreas Degradadas (Rehabilitation of Degraded Areas), and Projetos de
Destinação Adequada de Resíduos (Adequate Waste Disposal).
7 - GENERAL AND ADMINISTRATIVE EXPENSES
In 2014, the Company implemented a reorganization process including, but not limited
to, the introduction of a Shared Services Center, and incurred non-recurring extraordinary
expenses amounting to R$11,610 thousand.
8 - RELATIONSHIP WITH INDEPENDENT AUDITORS
In compliance with CVM Rule No. 381/2003, the Company represents that its
independent auditors Ernst & Young did not provide any other non-audit services in the course
of 2014.
The Management
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