The Navigator Company group registers impairment due to project in Mozambique

30 April 2019

The Navigator Company group reported an impairment of 6.7 million euros and an additional provision of 12 million euros in 2018 due to its project in Mozambique, the Portuguese group said.

The impairment relates to the “fair value” of the biological assets established in Zambézia province and the provision became necessary due to the situation of the forestry project for the production of eucalyptus wood chips for export.

The document with results for the 2018 fiscal year noted that subsidiary Portucel Moçambique and the Mozambican government on 9 July 2018 signed a memorandum of understanding on the reshaping of the investment project, which would be carried out in two phases.

In the first phase, a forest base of around 40 000 hectares would be created to supply a unit (yet to be built) for the production of eucalyptus wood chips for export, of about 1 million tonnes per year, as part of an estimated overall investment of US$140 million.

The signing of the memorandum of understanding led to the creation of a joint team to ensure compliance with the required conditions to move forward with the investment, including setting up the logistics facilities needed to export the eucalyptus chips.

“The first phase of the project is therefore conditional on the proper resolution of the previous conditions identified in the Memorandum of Understanding signed with the Government of Mozambique, which has not been verified so far,” the document said.

Portucel Moçambique was founded under Mozambican law in 2009 and that same year was also granted Land Use and Utilisation Rights (DUAT) of 173,000 hectares in Zambézia province and 183,000 hectares in the province of Manica for a 50-year period. (Macauhub)