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Aracruz Celulose S.A. 08 July 2008

Company News Alert

2Q 08 results fall below our expectations

ADR HOLD Aracruz Celulose S.A.’s (Aracruz) 2Q 08 y-o-y revenue growth was driven by an increase in net pulp
Fundamental stock Direct
prices access
offsetting the to the infull
decline report
sales free
volumes. The of charge
company at a y-o-y decline in operating
reported
performance due to the ongoing cost pressures led by higher input costs. The ADR depreciated 5.7%
http://www.iirgroup.com/researchoracle/viewreport/show/20236
after the announcement of lower than market expected 2Q 08 results. Although the strong demand
outlook for pulp prevails, taking into account the lower than expected 2Q 08 results and ongoing cost
pressures on the company, we are likely to revise our estimates and target price when we come to
revalue the company in our next update report. Hence, we do not anticipate a change in the current
HOLD rating for the ADR.
Ticker: ARA
Target price: US$77.00
Current price: US$68.21
Price change since (5.4%) We will reassess the ADR rating for Aracruz in the coming weeks.
last report:

Brazilian SELL At current levels, the Brazilian preferred stock no longer supports our SELL rating. However, as we
continue to anticipate a negative currency impact on the Brazilian stock over the medium term1, and
Preferred as we expect to revise our estimates downwards, we do not anticipate a change in our current SELL
rating.
Stock
Ticker: ARCZ6.SA
Target price: BRR10.01
Current price: BRR10.95
Price change since (4.8%) We will reassess the Brazilian preferred stock in the coming weeks.
last report:

Supervisor: Meera Patil

Analyst: Abhay Amlekar Investment horizon- short term actionable trading strategies
Editor: Adil Bahar, PhD This report addresses the needs of strategic investors with a long-term investment horizon of 6-24 months. If
Global Research Director: this report is provided to you by your broker under the Global Settlement, you may now also access (free of
Satish Betadpur, CFA charge) the short-term trading outlook that we publish from time to time for this issuer, looking at the coming
5-30 days for readers with a shorter trading horizon. These are available on-line only at
Next news due: www.researchoracle.com.
3Q 08 results, 07 October 2008
Aracruz announced its 2Q 08 results on 07 July 2008. Net revenues for the quarter were in line with
our as well as market expectations while EBITDA and net income were significantly below our as well
as consensus estimates, primarily due to higher-than-expected increase in total operating costs and
expenses. The highlights of the results, reported under US GAAP, are as follows:

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