Suzano announces record operating cash generation of R$5.2 billion in 3Q21

Rhea-AI Summary

Suzano reported record operating cash generation of R$5.2 billion and adjusted EBITDA of R$6.3 billion for 3Q21. The company reduced net debt to US$10.7 billion, achieving a net debt to EBITDA ratio of 2.7 times. Driven by strong sales, pulp sales reached 2.7 million tons, while net revenue was R$10.8 billion. However, a negative noncash effect from currency translation led to a net loss of R$959 million. Suzano aims to remove 40 million tons of carbon by 2025 and has approved a new pulp mill project.

Positive

• Operating cash generation reached R$5.2 billion, a record since the Fibria merger.
• Adjusted EBITDA of R$6.3 billion set a new quarterly record.
• Net debt decreased to US$10.7 billion, with a net debt to EBITDA ratio of 2.7 times.
• Strong pulp sales volume of 2.7 million tons contributed to net revenue of R$10.8 billion.
• New carbon removal target brought forward to 2025.

Negative

• Noncash translation effect resulted in a net loss of R$959 million due to currency fluctuations.

SÃO PAULO & NEW YORK--(BUSINESS WIRE)-- Suzano, the global benchmark in the manufacture of bioproducts developed from eucalyptus, announces its results for the three months to September (3Q21), with operating cash generation reaching R$5.2 billion, a new quarterly record since the merger with Fibria in January 2019. Adjusted EBITDA reached a record of R$6.3 billion in 3Q21.

Due to the increase in adjusted EBITDA, combined with the fresh reduction in net debt to US$10.7 billion, ratio of net debt to EBITDA ended the quarter at 2.7 times in USD. With this, the company concludes its financial deleveraging cycle after the merger and kickstarts a new phase of expansion with the construction of a pulp mill in Ribas do Rio Pardo, Mato Grosso do Sul state.

Suzano’s strong results in recent quarters underline its competitive strength and cash generation potential. “This new quarterly record was achieved in spite of inflationary pressures, especially on commodities, and the logistics challenges that have marked international trade in 2021,” says Walter Schalka, CEO of Suzano.

The 3Q21 results were driven by strong sales volume. In the pulp segment, sales totaled 2.7 million tons. The company’s inventory levels remain below the desirable level from an operational standpoint. In the paper segment, sales volume totaled 337 thousand tons. Suzano’s net revenue came to R$10.8 billion in 3Q21.

In the bottom line, the weakening of BRL against USD at the end of the quarter was chiefly responsible for the negative net result of R$959 million. This is a noncash effect and is primarily explained by the balance of dollar-denominated debt when translated into Brazilian real.

Suzano has announced two important developments since the end of 3Q21. As part of its ESG agenda, the company revised its carbon removal target, bringing its goal to remove 40 million tons of carbon from the atmosphere by 2030 forward to 2025. On the expansion front, the company announced that its Board of Directors has approved the construction of a mill in Ribas do Rio Pardo. Details of the project will be disclosed on November 5.

“Our strategy remains focused on long-term results and on creating value for all our stakeholders. By announcing our new carbon removal target, we hope to encourage governments and companies to revisit their commitments so that COP26 becomes a strategic milestone for the advancement of a new low-carbon economy,” says Schalka.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211028006254/en/

Media

Hawthorn Advisors

Zinka MacHale

suzano@hawthornadvisors.com

Source: Suzano

FAQ

What were Suzano's financial results for 3Q21?

Suzano reported a record operating cash generation of R$5.2 billion and adjusted EBITDA of R$6.3 billion for 3Q21.

What is Suzano's net debt as of September 2021?

As of September 2021, Suzano's net debt is US$10.7 billion.

How much carbon does Suzano plan to remove by 2025?

Suzano aims to remove 40 million tons of carbon from the atmosphere by 2025.

What was the net revenue reported by Suzano in 3Q21?

Suzano reported net revenue of R$10.8 billion in 3Q21.

What caused Suzano's net loss in 3Q21?

The net loss of R$959 million in 3Q21 was primarily due to a noncash translation effect from currency fluctuations.