Hello everyone. Welcome to our second quarter 2022 results. We will start with a general presentation, and then we will move forward for our Q&A. Please note that the statements made today during the presentation and Q&A may include forward-looking statements to assist your understanding of our expectations for the future performance. These statements are subject to some risks that could cause actual results and events to differ materially. Second quarter results represent an all-time record in terms of EBITDA, with $587 million. This is the result of the good pricing environment we are seeing in all our business lines, in addition to a strong operational performance of all our facilities. The pulp business continued to have a strong result, even though we carried out two scheduled maintenance downtimes during the quarter, which affected our overall operating costs.
The Softys business shows a significant improvement in terms of EBITDA and EBITDA margins, as prices continued to move upwards to offset the cost pressures we have faced over the past quarters, and we also were able to increase both tissue paper and personal care products volumes. On the other hand, we have the Biopackaging business, which posted the lowest EBITDA because of the stoppage of the corrugated paper facility in Chile as the result of the fire by the end of March 2022, which affected both sales volumes and operating costs. Repairs of the machine are advancing according to our schedule, so we expect to start the paper operation in October 2022, and the losses should be covered by our insurance policy.
Revenues for the second quarter posted a 15% sequential growth, mainly driven by higher average prices in all business divisions, and a 26% annual increase also because of higher average prices in addition to higher sales volumes. Operational costs reached CLP 1.1 billion, increasing 9% compared to the previous quarter, and 27% compared to the same period last year, which represented 58% of total revenues, compared to 61% in first quarter 2022 and 58% in second quarter 2021. The quarter-on-quarter increase is mainly related to higher costs in pulp, partially driven by the maintenance downtimes carried out during the quarter. We also had a higher operating cost in Softys related to higher sales volumes and in Biopackaging as a result of the stoppage of the corrugated paper machine.
The year-on-year increases is mainly related to the higher sales volumes, as well as higher fuel and chemical costs for all businesses, as well as fiber costs for Softys and Biopackaging. Consolidated other operating expenses reached $242 million for the quarter. 17% higher quarter-on-quarter and 24% higher year-on-year, representing 12% of total revenues stable when compared to the first quarter 2022 and second quarter 2021. The quarter-over-quarter and year-over-year figure are explained by higher administrative expenses as well as higher logistics costs. There were also higher marketing expenses in Softys. On a consolidated basis, as I mentioned earlier, the company's second quarter EBITDA reached $587 million, increasing 26% compared to the previous quarter and to the same quarter last year.
Net income reached $225 million, decreasing 10% sequentially and 8% annually. This is the result of higher income taxes because of the better operational result and the negative effect we registered on deferred taxes, given the depreciation of the Brazilian real, offset by the higher EBITDA generation during the quarter. I would like now to turn the presentation over to Columba Enríquez, our Investor Relations manager, who will provide more details on our results by businesses.
Thank you, Fernando, and good morning, everyone. I'll start with the pulp business. Pulp production reached over 1 billion tons, down 7% quarter-over-quarter and 3% year-over-year. We can see that results vary by fiber. Softwood production increased 3% on a quarterly and annual basis, which is the result of the better operational performance of the Laja and Pacifico mills. On the other hand, hardwood production fell 9% quarter-over-quarter and 5% year-over-year as we carried out maintenance at Santa Fe 1 and Guaíba 2. Total market pulp sale volumes decreased by 1% quarter-over-quarter and increased 14% year-over-year.
Looking into results by fiber, softwood third-party sales increased by 7% quarter-over-quarter, with higher sales to China, Europe, and Latin America, and increased by 32% year-over-year with higher exports to most regions. Hardwood, on the other side, decreased 2% on a quarter-over-quarter basis, with lower sales to China, and increased 10% compared to the second quarter of last year, with higher exports to most markets. Softwood cash costs totaled $361 per ton, increasing 8% quarter-over-quarter and 13% year-over-year. This is the result of higher pulpwood costs, driven by higher third-party purchases and increased transportation, and higher chemical and oil prices. Hardwood cash costs totaled $225 per ton, increasing 18% and 28% compared to the previous quarter and the same quarter of last year, respectively.
This is mainly explained by the costs involved in scheduled maintenance downtimes, as well as higher chemical and energy prices, and also higher pulpwood costs. Pulp prices during the second quarter of 2022 reached $954 per ton for softwood, and $797 per ton for hardwood. An 18% and a 19% increase respectively compared to the previous quarter. Compared to the second quarter of last year, prices also show an important improvement, increasing 8% for softwood and 14% for hardwood. As a result of this, revenues for the pulp business totaled approximately $841 million, increasing 20% quarter-on-quarter and 29% year-over-year.
Looking into the forestry segment, third-party forestry sale volumes increased by 2% quarter-over-quarter, mainly due to higher sales of softwood and decreased 26% year-over-year, driven by higher internal consumption of pulpwood and sawlogs, which resulted in lower third-party volumes. This was offset by higher sales of solid wood products. Forestry sales increased 14% quarter-over-quarter and 34% year-over-year, reaching $167 million. This is mainly the result of an improvement in average prices and a better product mix. Revenues for our pulp and forestry business increased 19% compared to the previous quarter, and 30% compared to last year, reaching around $1 billion. EBITDA improved 31% sequentially and 28% compared to the second quarter of 2021, reaching approximately $500 million. While the margin reached 49%.
The quarter-over-quarter and year-over-year EBITDA increase was primarily due to higher average prices as well as higher sale volumes, which were able to offset higher operating costs driven by higher cash costs and maintenance costs. Now going to the Biopackaging business. Sales volumes to third parties increased by 2% quarter-over-quarter and 1% year-over-year. In both cases, driven by the incorporation of Iguaçu's paper sacks, Sack Kraft and specialty paper volumes, which were offset by the lower corrugated paper and corrugated boxes volumes as a result of the stoppage of the corrugated paper machine. Average sale prices decreased 1% sequentially. Average sale prices decreased 1% sequentially and posted a 20% annual increase, with all products showing significant increases except boxboard, which was stable.
As a result, revenues increased by 1% quarter-over-quarter and 21% year-over-year, reaching $306 million. The Biopackaging business EBITDA totaled $39 million, decreasing 39% compared to the first quarter of 2022, and 6% compared to the second quarter of 2021. EBITDA margin reached 13%, decreasing from the 21% of the previous quarter and the 16% of the same quarter of last year. The sequential annual decrease in EBITDA is mainly from the stoppage of the corrugated paper machine, which affected both sales volumes and operating costs since it was necessary to buy papers from third parties to supply our corrugated boxes operation. This was partly offset by the integration of Iguaçu. Also, on a year-on-year basis, the result was compensated by the significant increase in average prices.
Now moving to Softys. Revenues increased by 16% quarter-over-quarter and 23% year-over-year, reaching $668 million. Tissue paper sale volumes increased 7% compared to the previous quarter and 9% compared to the second quarter of 2021. Quarter-over-quarter, we registered higher volumes in Peru, Argentina and Brazil. The latter one partly explained by the consolidation of Carta Fabril on June 1st. Year-over-year, results are also explained by the integration of Carta Fabril in addition to higher volumes in Peru. Personal care products sale volumes increased 2% sequentially and annually. The increase is also partly explained by the personal care volumes of Carta Fabril. We also saw higher feminine care products volumes in Peru and Argentina during the quarter.
Average sale prices measured in US dollars increased 10% for tissue paper and personal care products compared to the first quarter of 2022, and increased 11% for tissue paper and 27% for personal care products compared to the second quarter of last year. In both cases, the increase relates to higher prices in local currencies and some other initiatives to offset the cost increase. Softys EBITDA reached $64 million during the quarter, compared to $32 million in 1Q 2022 and $57 million in 2Q 2021. EBITDA margin reached 9.5%. The quarter-over-quarter increase comes mainly from higher average prices as well as higher tissue paper and personal care product volumes, which were able to offset the increase in SG&A. The year-over-year increase also relates to higher sales from higher average prices and sale volumes.
This was partly offset by increased operating costs due to higher fiber costs, especially pulp and raw materials for personal care products, as well as higher SG&A. I will turn the call back to Fernando to go through our cash generation and financial execution.
Thank you very much, Columba. On April 12th, we took control over the forest and industrial assets of Iguaçu Celulose e Papel, with operations in the states of Paraná and Santa Catarina in Brazil. On June 1st, we took control over Carta Fabril, with tissue and personal care mills in the states of Rio de Janeiro and Goiás in Brazil as well. Both acquisitions were dispersed in the second quarter. In addition, the BioCMPC project continues advancing according to schedule, and we spent $42 million during the second quarter. The project had a 29% physical completion as of June 30, and is expected to start up in the fourth quarter of 2023.
As a result, capital expenditures during the second quarter totaled $385 million, increasing compared to the $106 million during the first quarter, and of the $74 million during the second quarter of last year. Free cash flow as a result was negative by $489 million, which is the result of the higher investments in addition to the dividend and tax payments. We closed the second quarter of the year with $4.5 billion in total debt and cash of approximately $800 million, leaving our net debt at approximately $3.7 billion, increasing compared to the previous quarter and the last year as a result of the lower cash level.
The net debt to EBITDA ratio closed the quarter at 9.1 times, increasing compared to the previous quarter, but improving from the level we had last year. I would like to mention that on April 13, we closed a $500 million bank loan structure, a sustainability-linked bullet loan with six banks, further deepening our sustainable finance journey. In addition, we paid the $500 million bond that was due in April. I would like this opportunity to tell you a little bit more about the recent acquisition that we announced last week. Softys Mexico will acquire the Puebla mill in Mexico from Ontex. This plant has 26 lines dedicated to the manufacture of baby and adult diapers, where they have approximately 30% of market share and feminine care products.
The agreed price is MXN 5.45 billion and a deferred payment of an additional MXN 500 million. This transaction, as usual, is still subject to condition precedent, including the approval of antitrust authorities, and we're expecting it to be completed by the first quarter of 2023. This acquisition allows Softys to be a relevant player in the personal care business in Latin America, and reinforce the growth strategy of the personal care products segment and the Mexican market.
2022 continues to be a year with a strong operational performance and positive market trends, which have allowed us to deliver a record quarterly EBITDA figure. We will continue focusing on the execution of our strategy based on the five pillars, operational excellence and procurement, commercial excellence, efficient growth, innovation and digitalization, and sustainability. We know this is the right path to guide us towards our long-term goals and to create shared value for all our stakeholders.
Thank you, Fernando. We will now begin the Q&A session. For that, we have here today Francisco Ruiz-Tagle, CEO of CMPC, and Raimundo Varela, CEO of CMPC Pulp. They will be available to answer any questions. Now, to ask a question, please raise your hand through the platform or type your question in the chat section. With that, I will give the word to Isabella Vasconcelos. Isabella, please unmute your mic. There you go.
Hi. Hi. Thanks, Columba. Good morning. Can you hear me well? Yes? Okay, great. I have two questions on my side. First on the pulp market side, congratulations on the results. I just wanted to get a bit more feedback on the outlook for pulp market dynamics for the next couple of months. If you continue to see room for prices to remain stable or have you seen any sort of pressure in the key markets, specifically China? We've heard some pressure from the paper makers on the softwood side. So far prices have remained stable. Just wanted to see your view there.
The second question on the tissue business, specifically on the outlook for margins. We've seen a stronger than expected recovery in margins in the second quarter, at least for us. I just wanted to see if you guys have any additional price increases that are expected to flow through results in the third quarter, and your view on margins overall. Those are my questions. Thank you.
Yeah. We will start with the first question by Raimundo.
Thank you, Isabella, for your question. I think the market is still stable, the pulp market. We are seeing a strong market in Europe and in the U.S., in both fibers. I think stocks there are still relatively low, and the paper makers have been able to pass into prices and continue to pass into prices the higher pulp. We see a healthy demand, even though it's summer and usually it's slower. We still see a strong market in Europe and the U.S. I think China has been a little bit more challenging lately. As you said, in the softwood side, where prices declined by about $20-$30 in July.
However, in August, we already sold and committed our softwood volume at unchanged prices compared to July. We see that as a sign of stabilization of the market. In hardwood, in China, we increased prices in July, and in August we already concluded our business unchanged, which we also see there are signs of stability.
The second question, Fernando will take it. Fernando, you can go.
Thank you. Thanks, Isabella. Regarding tissue markets, in general, I'll just separate the question in two. We have been working very hard on improving our costs. Of course, we have been facing strong cost pressures due to higher fibers and other important raw materials. But internally, we have been working very hard to improve our efficiencies and with big success. On the other hand, we also have been able to transfer some of these higher costs to prices with significant price increases in most of the markets where we operate. We expect to be able to continue with that trend in the coming months.
Okay. The next question comes from, Rafael Barcellos. Rafael, you're gonna unmute your mic.
Oh, okay. Can you hear me?
Yes, we can hear you well.
Good morning. Thanks for taking my question. My first question is about capital allocation. I just would like to understand what is the main focus at the moment. I mean, should we continue to expect CMPC focusing on dividends and small to medium acquisitions on the tissue segment, which is exactly what the company has done over the past few quarters? Or the company is still considering like a bigger investment, like a new pulp mill in Brazil. I think it would be interesting if you could discuss a bit your strategy on capital allocation. My second question is a quick follow-up question on the pulp dynamics. Could you please give us more detail on the softwood side?
Recently we saw another relevant pulp producer announcing a lower softwood price in China. It would be interesting if you could comment a bit if you are seeing any pressure on the softwood side. Thank you.
Part of the question, hi, Rafael, connected with what you are thinking on for our pulp business on investments. You know, well, we have been investing on and in our pulp business during the last year, increasing our capacity in Guaíba. We are now adding 350,000 extra tons in that mill. And of course, creating the firm base for future investments. Still, we haven't announced anything concrete because we haven't decided anything yet. But with the firm conviction about growing in our pulp business as one of our strategic areas of CMPC.
In connection with some pressure on the softwood pulp in China, I will transfer to Raimundo to answer that.
Thank you.
Thank you, Rafael, for the question. I think what we see, as I mentioned, is that the softwood market is a little bit more challenging in China. We saw that in early July where prices dropped, but we were able to conclude our business in July at -$20 to -$30. In August, we already concluded August volume at unchanged. You know, so again, I see that as a sign of stability. I think, given that the rest of the markets are still very strong in both fibers, what we do is we move a little bit of volume from China into other markets, and basically, without much difficulty, we were able to place that volume that we took out of China into other markets.
You know, we're in summer, you know, so it's relatively normal to have some lower demand, you know. We see again. In September onwards, the demand usually improves. I mean, there are some concerns, of course, in the economy, you know, that might affect prices. That might happen, I think. For the time being, we see stability.
Okay. Thanks a lot.
Our next question comes from Jens Spiess. Jens, you can now go.
Yes. Hello. Can you hear me?
Yes, we can hear you well.
Okay, perfect. I just want to ask on the Mabe acquisition in Mexico, if you could give a bit more details in terms of the capacity that you will be adding. Also, if you could comment, there was some news article mentioning that the transaction was made at 10 times EBITDA. I think 10 times EBITDA for the last 12 months. Could you comment on that if that's correct? What do you plan to do in terms of the brand? Are you keeping the brand?
Is there much overlap versus your existing portfolio in Mexico? I think it's not, right? It's mainly personal care, the Ontex acquisition. Thank you.
Thank you, Jens, for the question. First of all, we haven't disclosed about EBITDA and EBITDA multiples. Having said that, we are adding with this acquisition about 26 production lines. This is about 2 billion units of product. Since we're very little in Mexico, there's no overlap between our own brands and the brands we are acquiring with this transaction, which are brands that are very valuable in the market and of course very valuable for us. We see a very strong synergy between our two operations.
Today, we have a big operation in tissue, in Mexico, and with this we'll be also big in personal care products.
Okay. Perfect. Thank you.
Now we'll, Caio Ribeiro, you can now ask your question.
Yes, good morning, everyone. Can you guys hear me?
Yes, we can hear you well.
Okay, perfect. My first question is on your free cash flow generation. There was a big cash outflow from items that you labeled as others. I just wanted to get your sense on what were the main items that compose that line, you know, that $290 million cash outflow, and whether this number should come down in the coming quarters. Then secondly, on your pulp cash costs, I just wanted to get a sense on what you expect going forward and, you know, whether most of those inflationary pressures have already happened. Thank you.
Thanks for the question. Yeah, regarding. Of course, we had a strong hit on our free cash flow due to the acquisitions and the closing of the transaction of Iguaçu and Carta Fabril. On the other account, we had basically two items. One is VAT related to this transaction and also to some of the projects, which are basically credits that we will use further in the future. But also we made some investment for cash investments, short-term investment that for accounting reasons go into this account, but are basically cash on hand investment that have less than 90 days.
This is more or less which is on this others accounts. Raimundo.
Thank you, Caio, for the question. I take the second part regarding the cash costs involved. Definitely, the numbers show that we have seen a price or cost increase in some of the raw materials, the chemicals, the fuels. We see that we probably passed the peak of the prices of those products. I mean, we are still with prices relatively high, but we don't see a trend that those will continue to increase, no? I would think that those will be stable in the next months.
At the same time, we have worked very hard on improving our specific consumption of each one of those raw materials in order to mitigate the increase.
Perfect. That's very clear. Thank you.
Thank you, Raimundo, and thank you, Fernando. Our next question comes from Hernan Kaznowski. Hernán, you can ask your question.
Good morning. Thank you, Columba, and congratulations everybody on the great results for the quarter. My question is related to the financing plan for let's say the next few quarters. Ahead we have, some-
Hernan, are you there?
Yes.
Well, please remember then that to ask a question, you can raise your hand by clicking the hand button and/or type it in the chat section.
Can you hear me?
Yes, we can hear you well now.
Oh, okay. Great. Thank you. Again, congratulations on the results. My question was related to the financing plan ahead. There are a few big tickets in the next few quarters, like the dividends of CLP 180 million, the acquisition of Mave, CLP 270 million on a first installment, and then we have the maturity of the 2023 bond in May for $500 million. I would like to maybe get more color on what is the financial plan there. Maybe if you are planning to go to the capital markets to refinance the debt and also the current cash position is a little bit below what we have seen in the last few quarters.
You feel comfortable with that position, or you are planning maybe to preserve more cash flow in the next few quarters?
Thanks, Hernan, for the question.
Of course, we have a pressure on our cash position. We are very comfortable with the cash we have today on hand. The amount we feel comfortable is in the range of $700 million, so we closed the quarter around there. We are still generating a lot of cash, as Raimundo mentioned. Pulp prices support that. We are also looking for different alternatives on top of the dividend, the acquisition of Mabe. We have a bond due in May, a $100 million international bond.
Probably, yes, we will be in the market refinancing that facility and probably looking some other financing for the acquisitions on the CapEx we have on the pipeline.
Okay. Thank you very much.
We have different alternatives that we have been exploring, not only in the international market, but also in Chile and in other local markets where we operate.
There you go. Thank you, Fernando.
We have a question from the chat. It says, how is the situation in the south of Chile, and what actions are you taking around it? I think this one goes for Francisco.
Well, thank you for the question. Well, as you know, the situation in the south of Chile in some areas has been kind of a complex situation. Our operations have not been affected, you know, because those extreme situations of violence have happened in some particular areas. Still, it's a problem and a state problem, actually. It has been hard to solve the situation of violence. The way we're operating, we have to move to other areas where we of course have the possibility to produce our raw material for the mills. In general, it hasn't affected our production. It is a concern, and of course.
We hope, you know, the situation start being better in the future. The government has announced some initiatives in order to control that. Still in place several problems in the south of Chile.
Perfect. Thank you, Francisco. If you have a question, any other question, please remember to raise your hand or to type it in the chat section. We'll wait a couple of seconds. Well, as we don't have any further questions, I would like to thank Raimundo, Francisco, and Fernando for your time. Thank you all who joined this presentation, and hope you have a great day. Thank you all.