May 8 (Reuters) - Chilean industrial conglomerate

Empresas Copec on Thursday posted an 8.5% drop in

first-quarter profit, as weaker forestry results from lower pulp

prices and panel volumes were partly offset by a stronger energy

sector performance.

First-quarter profits hit $208 million compared to $228

million in the same quarter last year, while revenues increased

1.8% to $7.25 billion.

The results landed below the expectations of analysts polled

by LSEG, who had predicted a net profit of $220 million and

revenues of $6.6 billion.

Forestry subsidiary Arauco, which contributes

the bulk of Copec's earnings, saw a decline of 22.4% in its core

earnings driven by falling pulp prices and lower volumes, offset

by higher wood prices.

Copec said while the sector showed positive pricing

trends and improved sales toward the end of the quarter, overall

market conditions worsened in March amid escalating trade

tensions and newly announced tariffs, which fueled uncertainty.

Energy operating income rose on higher sales and margins

at Copec Chile, growth in Terpel's lubricants unit, and improved

results at Abastible, boosted by its new Gasib unit in Europe

and stronger performance across Latin America.

Copec, which also operates a large fuel distribution

network, holds mining interests and runs fishing operations,

confirmed construction began in April on its $4.6 billion

"Sucuriu Project" pulp mill in Brazil. The plant is expected to

produce 3.5 million metric tons of dry cellulose annually, with

operations set to begin in late 2027.