UPDATE 1-Brazil’s Fibria posts loss on currency, wood pulp prices

(Adds details of earnings, Horizonte 2 project)

Jan 30 Brazil’s Fibria Celulose SA , the world’s largest eucalyptus pulp producer, posted a quarterly loss on Monday as weaker prices and a stronger local currency undermined its export-focused business.

Fibria reported a fourth-quarter net loss of 92 million reais ($29 million) on Monday, compared to a net profit of 910 million reais a year earlier, according to a securities filing.

Fibria said in a securities filing that earnings before interest, taxes, depreciation and amortization, excluding one-time non-cash effects, a gauge of operating profit known as adjusted EBITDA, fell 50 percent to 804 million reais.

Operational earnings missed an average estimate of 860 million reais in a Reuters poll of four analysts. Without the adjustments, EBITDA fell 62 percent to 667 million reais.

Global wood pulp prices have recovered in recent months on stronger Chinese demand after falling about 20 percent in 2016.

That drop, combined with a roughly 20 percent appreciation of Brazil’s currency, the real, has hurt the earnings of the country’s pulp producers, adding to expectations of mergers and acquisitions in the sector.

The Brazilians are still pressing ahead with new plants, unlike some international rivals, including Fibria’s Horizonte 2 project in midwest Brazil, which is set to add around 2 million tonnes of new capacity starting this year.

Fibria said it had completed 77 percent of the physical plant for Horizonte 2 in December, surpassing its expectations, after investing 57 percent of its budget so far.

($1 = 3.13 reais) (Reporting by Brad Haynes; editing by Diane Craft)