ENCE Energía y Celulosa, S.A.

Good afternoon, ladies and gentlemen. Welcome to the NCEF First Quarter 2020 results presentation. I will now hand over to Mr. Ignacio Colmenares, Executive Chairman, and Alfredo Abello, CFO. Gentlemen, please go ahead.

Good afternoon, ladies and gentlemen. I hope you and your families are all well. Thank you for joining NCEF First Quarter 2020 results conference call. Our CFO, Alfredo Arrello, and our head of IR, Alberto Valdez, are also connected from their homes. After the presentation, we will be pleased to answer any questions you may have. Let's start in slide number four with the main highlights of the quarter, which has been marked by the international spread of the coronavirus and historically low prices. The market seems to be changing. various producers have announced price hikes. I'm proud to tell you that our early reaction to the threat from this virus on February 24th and the rigorous application of our protocols to prevent and minimize the risk of the spread of the virus have allowed us to keep our people safe and we continue to operate normally. All MFES activities from forestry operations the pulp production and the generation of renewable energy have been considered essential by Spanish authorities and must therefore continue during this health crisis. In general terms, the pulp market has continued to operate normally, but prices have been exceptionally low. Demand increased by 7% year on year in January and February. Higher consumption of tissue paper and hygiene products has offset the recent decrease in the consumption of printing and writing papers. At the operating level, the capacity expansions made in 2019 began to be different. Pulp production increased by 9% and cash cost reduced by 4%. Pulp sales improved by 25% year on year with a better commercial. In the renewable energy business, the two new biomass plants built in Huelva and Porto Llano were commissioned on January 31st and March 31st, respectively. These two new plants represent a 44% increase in our renewable capacity, which will be noticed in the second quarter.

They will provide the group with greater stability.