Suzano Reports Operating Cash Generation of R$3 Billion in Fourth Quarter 2020

Rhea-AI Summary

Suzano reported robust financial results for 4Q20 and fiscal year 2020, achieving operating cash generation of R$ 3 billion in the quarter and R$ 11.5 billion for the year, reflecting a 63% increase over 2019. Adjusted EBITDA rose to R$ 4 billion in 4Q20 and R$ 15 billion for the year, up 39%. Strong pulp sales of 10.8 million tons, a 15% increase, boosted total sales by 12% to 12 million tons. The leverage ratio improved from 4.9 to 4.3, highlighting effective debt management.

Positive

• Operating cash generation of R$ 11.5 billion for 2020, a 63% growth from 2019.
• Adjusted EBITDA reached R$ 15 billion, representing a 39% increase year-over-year.
• Pulp sales increased by 15% to 10.8 million tons in 2020.
• Total sales grew by 12%, reaching 12 million tons.
• Reduced debt by US$ 1.2 billion in 2020.
• Leverage ratio improved from 4.9 times to 4.3 times.

Negative

• Paper sales decreased by 6% to 1.2 million tons.
• -

Suzano, a global reference in the manufacture of bioproducts developed from the cultivation of eucalyptus, announces its results for the fourth quarter of 2020 (4Q20) and for fiscal year 2020. The company reported operating cash generation of R$ 3 billion in 4Q20 and of R$11.5 billion in fiscal year 2020, which represents growth of 63% over 2019. Adjusted EBITDA, another important indicator, came to R$4 billion in the quarter and R$15 billion in the year, representing an increase of 39% compared to the prior year.

Suzano’s financial results in 2020 were supported by strong sales volume, the favorable exchange rate for exports, rigid cost controls, including the resilience in production cost, the capture of synergies and its robust cash generation capacity, despite the impacts caused by the covid-19 pandemic on the global economy and by the shift in people’s routines around the world.

“We overcame all obstacles in the year, which has been so unique for human history, with the conviction that we are even stronger than we were before the pandemic. We made progress internally by strengthening our post-merger culture and externally by significantly deleveraging, among various other advances,” said Walter Schalka, CEO of Suzano.

The company’s cash generation capacity, combined with its control of debt, led the leverage ratio (net debt/adjusted EBITDA) to decline from 4.9 times to 4.3 times in U.S. dollar in the comparison of 2020 with 2019.

Pulp sales were another highlight in the year, with Suzano selling 10.8 million tons of pulp in 2020, 15% more than in 2019. Meanwhile, paper sales fell by 6%, to 1.2 million tons. As a result, Suzano’s total sales reached 12 million tons, up 12% over 2019, and supporting the growth of 17% in net revenue in the year, to R$30.5 billion.

“The numbers confirm the resilience of Suzano’s operations. We generated cash of R$11.5 billion and were able to reduce our debt by US$1.2 billion over the course of 2020. We also reduced our inventories, which today are at the lowest level of the last five years, advanced in the sale of non-strategic assets and captured synergies in the year of R$1.3 billion (pretax), which exceeded our initial projection,” said Marcelo Bacci, CFO and IRO of Suzano.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210210005984/en/

FAQ

What were Suzano's financial results for 4Q20 and fiscal year 2020?

Suzano reported operating cash generation of R$ 3 billion in 4Q20 and R$ 11.5 billion for the entire year 2020, a 63% increase from 2019.

How did Suzano's adjusted EBITDA perform in 2020?

Adjusted EBITDA for Suzano was R$ 4 billion in 4Q20 and R$ 15 billion for the fiscal year 2020, which marks a 39% increase compared to the previous year.

What were the key sales figures for Suzano in 2020?

In 2020, Suzano sold 10.8 million tons of pulp and 1.2 million tons of paper, with total sales reaching 12 million tons, up 12% from 2019.

How did Suzano manage its debt in 2020?

Suzano reduced its debt by US$ 1.2 billion in 2020, leading to an improvement in its leverage ratio from 4.9 to 4.3.

What impact did the COVID-19 pandemic have on Suzano's operations?

Despite challenges from the pandemic, Suzano reported strong cash generation and maintained rigid cost controls, supporting its financial results.