Suzano Reports a Strong Second Quarter Performance With Record Cash Generation

Rhea-AI Summary

Suzano, a leading integrated pulp and paper producer, reported a robust second quarter for 2022, showcasing a 17% increase in net revenue to R$11.5 billion compared to R$9.8 billion in 2Q21. The adjusted EBITDA also surged by 6% to R$6.3 billion. Sales volumes for pulp and paper rose significantly, with a 5% increase in pulp sales to 2.66 million tons and a 10% rise in paper sales to 324,000 tons. The company also raised its 2022 CAPEX guidance to R$16.1 billion and initiated a new share buyback program.

Positive

• Adjusted EBITDA increased by 6% to R$6.3 billion.
• Net revenue surged by 17% to R$11.5 billion.
• Pulp sales volumes rose by 5% to 2.66 million tons.
• Paper sales volumes increased by 10% to 324,000 tons.
• Net debt to EBITDA leverage ratio improved to 2.3x.
• Raised 2022 CAPEX guidance to R$16.1 billion.
• New share buyback program initiated.

Negative

• None.

NEW YORK & SÃO PAULO--(BUSINESS WIRE)-- Suzano, one of the world’s largest integrated pulp and paper producers, announces its second quarter results for 2022.

• Adjusted EBITDA of R$6.3 billion, up 6% on 2Q21 (R$5.9 billion)
• Operating cash generation of R$5.1 billion, up 2% on 2Q21 (R$4.9 billion)
• Net revenue of R$11.5 billion, up 17% on 2Q21 (R$9.8 billion)
• Substantial sales volume increase:
  • 5% increase in pulp sales volumes to 2.66 million tons (2Q21: 2.54 million tons)
  • 10% increase paper sales volumes to 324,000 tons (2Q21: 296,000 tons)
• Net debt to EBITDA leverage ratio of 2.3x (1Q22: 2.4x)
• Increased 2022 CAPEX guidance of R$16.1 billion from previously announced R$13.6 billion

Strong second quarter performance across these financial verticals was driven by both higher sales prices, given more favourable market conditions for pulp and paper markets; and higher sales volumes, given fewer scheduled maintenance shutdowns. Cost management discipline also improved adjusted EBITDA and cash generation.

“These excellent second quarter results are not only testament to higher pulp prices and positive market demand, but as well as the continued efforts of our various teams to ensure Suzano boosts operational efficiency. With this firm financial and operational footing, Suzano is intent on expanding our capacity to create, and share, value with our stakeholders,” said Walter Schalka, CEO of Suzano.

The Cerrado Project, a new pulp plant which is being built in Mato Grosso do Sul state, is progressing precisely as scheduled, closing the second quarter of 2022 with a physical progress "inside-the-fence" of 21%. This one plant alone will create up to 10,000 direct jobs during construction and 3,000 new employment opportunities once operational.

The second quarter also saw the acquisition of land properties, the launch of Suzano Ventures, and new plans to build a consumer goods plant in Espírito Santo. Additionally, in recent months Suzano has announced a higher dividend payment in 2022 and a share buyback program, with a new buyback program announced today.

On a social front, Suzano intends to double the number of beneficiaries attended by its social programs to 50,000 people in 2022. Meanwhile, on an environmental front, the numerous projects under development include one of the largest landscape restoration programs in Brazil, covering 35,000 hectares of areas under restoration, and the goal of connecting 500,000 hectares of forest fragments by 2030.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220727005783/en/

Hawthorn Advisors

Jamie Plotnek

suzano@hawthornadvisors.com

Source: Suzano

FAQ

What were Suzano's second quarter results for 2022?

Suzano reported a 17% increase in net revenue to R$11.5 billion, with adjusted EBITDA rising 6% to R$6.3 billion in the second quarter of 2022.

How much did Suzano's pulp and paper sales volumes increase in 2Q22?

Pulp sales volumes increased by 5% to 2.66 million tons, while paper sales volumes rose by 10% to 324,000 tons in the second quarter of 2022.

What is the updated CAPEX guidance for Suzano in 2022?

Suzano raised its 2022 CAPEX guidance to R$16.1 billion, up from the previous R$13.6 billion.

What new initiatives did Suzano announce in its second quarter report?

In its second quarter report, Suzano announced a new share buyback program and the launch of Suzano Ventures.