Eternit knew how to capitalise on opportunities that presented themselves during 2012, and managed to overcome the challenges encountered in acting with transparency and commitment, with the generation of value, responding rapidly to signals in the market. Internationally, the economy continued to suffer from the effects of the global crisis; even so, the domestic market was able to keep itself relatively buoyant.
Despite the modest performance of the Brazilian economy in 2012, Eternit grew faster than the GDP growth rate in the construction segment. Global demand for chrysotile asbestos remained high during the year, leading the Company to maintain its strategy of running its mining operation at full capacity. In its line of finished products, production accompanied demand, with a capacity utilization rate of approximately 80% for fiber-cement products and 60% for concrete tiles.
This performance, combined with a satisfactory sales policy and appreciation of the US dollar against the Brazilian real, enabled the Company to achieve net consolidated revenue of R$906 million, up 10% compared to the previous year. Of particular note were chrysotile mineral exports which contributed strongly to sales. Net earnings reached the R$113 million mark up 16% year-on-year.
Among Brazil's listed companies, Eternit has one of the highest returns for its shareholders, being one of the few companies that reconcile growth with the distribution of dividends. In 2012, the amount distributed to shareholders by Eternit totalled R$72 million, representing a dividend yield of 9.0%.
Total investments in 2012 amounted to R$69 million, an increase of 50% compared to 2011. Of particular note was the construction of the bathroom chinaware plant in the state of Ceará, a joint venture with Organizações Corona, a Colombian multinational that has been operating for more than 130 years, with 17 plants in Colombia and
2 in the United States.
On October 31, 2012 the Federal Supreme Court began its judgement on the merit of the Direct Actions of Unconstitutionality (ADIs) referring to the laws against the use of asbestos in the states of Rio Grande do Sul and São Paulo, the result of a public hearing held by the Supreme Court on August 24 and 31, 2012, after exhaustive debates of a medical-scientific nature among Brazilian society. The result of the start of the ruling was one vote in favour and another against the state laws, at which point judgement was suspended.
Defence of this business continues to require substantial dedication by our employees. The Company has always acted in a transparent manner, with various initiatives focused on publicising information about this safe use of chrysotile asbestos . It has adopted leading-edge technology and extremely rigorous criteria for the safety of its operations, and operates a structured visitation program at the mining company and its fiber-cement plants, providing society with knowledge about its activities, and principally about the way we work with this mineral – having already received over 55,000 visitors since the implementation of this program in 2004.
The fiber-cement production plants and the mining company carry certification from DNV Veritas of Norway, with ISO 9001 certification for quality management, ISO 14001 certification for environmental management and OHSAS 18001 certification for occupational health and safety. Since 2007 the Eternit Group has been a signatory of the Global Compact for the combating of corruption and a supporter of the Millennium Targets, both initiatives of the United Nations Organisation (UN).
We are proud of the advances that have been made in staff management practices, sustainability and corporate governance. In 2012 the companies in the Eternit Group obtain various important awards in the areas of Corporate Governance, Investor Relations, Human Resources, Marketing, Engineering, Health and Safety, the Environment, and Products. These recognitions provide the Company with the credibility to carry out its expansion and diversification project.
In line with its Structured Program for Expansion and Diversification, Eternit began the second phase of its program known as Welcome to the Next 70 Years, which has the long-term objective of 50% of its sales being from products linked to diversification.
For the next few years, we envisage a promising outlook for our sector, which will benefit from the stimulus measures for the purchase of construction materials, with longer payback periods and lower financing costs, reduction in the tax burden on basic construction materials, and the acceleration of investment in infrastructure, generating jobs and incomes.
Diversification into segments that have synergy with our existing businesses, improvement in corporate governance, and the incorporation of sustainability at every level right across the Company, all represent important commitments to Eternit's future.
The Company is confident that there will be a recovery in the Brazilian economy, especially in the sector of which it is a part. Having a satisfactory capital structure, a low level of indebtedness and investments that are consistent with its Expansion and Diversification Plan, Eternit is well-positioned to capitalize on the opportunities in its operational segments.
Welcome to the next 70 years!