Navigator crisis: €139m in losses, Portuguese diplomats on guard

  • ECO News
  • 16 August 2018

Both the government and its diplomatic bodies are monitoring the Navigator crisis, given the sudden increase of tariffs to 37% on paper sales to the US, which is causing severe damage to the company.

In a time when many countries are complaining over the protectionist rhetoric of Trump’s administration, you would not think Portugal would be an exception. And it isn’t. Navigator, a massive Portuguese company in the papermaking sector, has been hit by the rise of a new set of tariffs on paper imports to the USA.

The news did come as a shock to the company, especially given the latest diplomatic accords between Juncker and Trump: the two had met and reached an agreement that should start working on lifting barriers rather than creating new ones as this one,

It was seen by both leaders that these tariffs were adversely affecting both sides of the Atlantic.

On Friday night, Navigator informed the market that: “After being told, in April, by the North-American authorities, that the anti-dumping measure to be applied to paper sales to the US between August 2015 and February 2017 would be 0%, the United States Department of Commerce notified Navigator that the final tariff to be applied over that period’s sales will be instead raised to 37,34%”.

The company explains in this announcement, that the process started in 2015, when a provisory deposit tax of 29,53% was proposed. However, in January 2016, there was an administrative correction to the tax provision, that admitted it had been faulty, and the tax was reduced to 7,8%.

“Given that the North-American authorities did not request any extra documents or additional information, and that there haven’t been any considerable changes to the overall circumstances, we firmly believe that this decision is the reflection of the intentional, assumed pre-disposition from the US Department of Commerce to increase the final taxes from Navigator’s sales to the US, even though our company has a history of thoroughly cooperating with US’ authorities.” the company added in its statement.

Navigator considers that these taxes will have an effect of over €66m in losses in EBITDA (earnings before interest, taxes, depreciation and amortization) and over €45m on this year’s net profits.

The company has lost around €650m in assets in two hours, having dropped 18% in the stockmarket. Other Portuguese papermakers were also affected.

According to ECO’s calculations, NAvigator has lost €139,09m on the stock market.