Suzano sets sales record in 2024 with new mill in Mato Grosso do Sul state and acquisition in the U.S.

Rhea-AI Summary

Suzano (SUZ), the world's largest pulp producer, reported record-breaking sales of 12.3 million tonnes in 2024, up 7% from 2023. This growth was primarily driven by the new Cerrado Project pulp mill in Ribas do Rio Pardo and recent U.S. paperboard mill acquisitions.

Net revenues increased 19% to R$47.4 billion, with Adjusted EBITDA growing 31% to R$23.8 billion. Operational cash generation rose 40% to R$16.2 billion. However, the company reported a R$6.7 billion net loss due to accounting impacts from USD-denominated debt and hedging operations.

The company invested R$17.1 billion in 2024, with R$4.5 billion allocated to the Cerrado Project. The new mill completed its learning curve in under six months, helping reduce pulp cash cost by 6% to R$828/tonne. Net leverage improved from 3.1x to 2.9x despite significant investments, including U.S. acquisitions and a stake in Lenzing.

Positive

• Record sales volume of 12.3 million tonnes (+7% YoY)
• Net revenue increase of 19% to R$47.4 billion
• Adjusted EBITDA growth of 31% to R$23.8 billion
• Operational cash generation up 40% to R$16.2 billion
• Pulp cash cost reduction of 6% to R$828/tonne
• Net leverage improvement from 3.1x to 2.9x

Negative

• Net loss of R$6.7 billion due to USD debt and hedging impacts
• Significant capital expenditure of R$17.1 billion in 2024

Insights

Financial Analyst

Suzano's 2024 results demonstrate exceptional operational execution and strategic expansion. The record sales volume of 12.3 million tonnes and 19% revenue growth to R$47.4 billion underscore the company's strengthening market position. The 6% reduction in pulp cash cost to R$828/tonne is particularly noteworthy, as it enhances competitive advantages in a commodity market where cost leadership is crucial.

The rapid completion of the Cerrado Project's learning curve in under six months represents an industry milestone that will likely generate sustained cost benefits. This operational achievement, combined with strategic U.S. acquisitions, positions Suzano to capture value across different geographical markets and reduce exposure to single-market risks.

While the R$6.7 billion net loss might appear concerning, it's important to understand that this is an accounting effect from USD-denominated debt translation, not an operational issue. For an export-oriented company like Suzano, USD debt actually serves as a natural hedge against revenue streams, as weaker BRL typically leads to higher BRL-denominated export revenues.

The company's financial management deserves recognition for reducing net leverage to 2.9x while simultaneously executing major capital investments, maintaining a R$2.8 billion share buyback program, and distributing R$1.5 billion in shareholder returns. This balanced capital allocation approach demonstrates strong financial discipline and commitment to stakeholder returns.

The US$100 million commitment to sustainability initiatives, particularly the partnerships with Cambridge University and IUCN, positions Suzano strategically for the growing importance of ESG credentials in global markets. This investment could yield long-term competitive advantages through improved access to green financing and premium market positioning.

SÃO PAULO--(BUSINESS WIRE)-- Suzano, the world’s largest pulp producer, announces its quarterly results for both the final quarter (4Q24) and the full year (2024). Pulp and paper sales reached a new record of 12.3 million tonnes, rising 7% on 2023, mainly driven by the additional capacity from the new pulp mill in Ribas do Rio Pardo in Mato Grosso do Sul state. Further capacity from the recent acquisition of paperboard mills in the United States has also contributed to the record sales volume.

The higher sales volumes and favorable exchange rates boosting export revenues resulted in net revenues of R$47.4 billion in 2024, 19% higher than in 2023. Adjusted EBITDA grew 31%, to R$23.8 billion, while operational cash generation increased 40%, reaching R$16.2 billion. Suzano reported a net loss of R$6.7 billion due to the accounting impact of US dollar denominated debt and hedging operations translating into Brazilian Real. There is no immediate cash impact of this accounting adjustment and the potential cash effect will only occur at debt and hedging maturity.

Suzano invested R$17.1 billion in 2024, with R$4.5 billion specifically allocated to the new mill - the Cerrado Project - in Ribas do Rio Pardo. The world's largest single pulp production line began operations on July 21 and completed its learning curve process in less than six months, well ahead of expectations and setting a record timeline in the industry's history. The new mill has also contributed to reducing Suzano's pulp cash cost by 6% to R$828/tonne in 2024 versus the prior year.

Beto Abreu, CEO of Suzano, commented:

“We successfully completed our Cerrado Project and made significant strides in our strategy, with the acquisition of assets in the U.S. and a stake in Lenzing, the Austria-based textiles business. Despite these investments, we ended 2024 with lower net leverage than the prior year, reflecting Suzano's discipline in capital allocation, operational competitiveness and financial strength”.

Suzano’s net leverage in U.S. dollars fell from 3.1 times in December 2023 to 2.9 times at the end of 2024, in line with Suzano’s commitment to execute its largest-ever capital investment project within the limits established in the company’s policy. In addition to maintaining robust investment plans, Suzano allocated R$2.8 billion to fund its share buyback program and paying a total of R$1.5 billion as interest on equity to its shareholders.

In the year of its centenary, Suzano reached the mark of 56,000 direct and indirect employees and embarked on an ambitious commitment to invest up to US$100 million over a ten-year period in initiatives focusing on research, knowledge generation and education for sustainability, in collaboration with renowned international institutions, including the University of Cambridge and the non-governmental organization IUCN, among others.

Suzano's central goal is to drive global efforts to protect and restore nature by developing expertise and leadership in sustainability, and accelerating research and education in conservation, climate change, and water resource management.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250212112172/en/

Hawthorn Advisors

Jamie Plotnek

suzano@hawthornadvisors.com

Source: Suzano

FAQ

What were Suzano's (SUZ) key financial results for 2024?

Suzano achieved record sales of 12.3 million tonnes, net revenues of R$47.4 billion (+19% YoY), Adjusted EBITDA of R$23.8 billion (+31%), but reported a net loss of R$6.7 billion due to USD debt accounting impacts.

How much did Suzano (SUZ) invest in the Cerrado Project in 2024?

Suzano invested R$4.5 billion in the Cerrado Project out of total investments of R$17.1 billion in 2024.

What impact did the new Cerrado mill have on Suzano's (SUZ) operations?

The Cerrado mill helped reduce pulp cash cost by 6% to R$828/tonne and contributed to the 7% increase in total sales volume.

How did Suzano's (SUZ) net leverage ratio change in 2024?

Suzano's net leverage improved from 3.1 times in December 2023 to 2.9 times at the end of 2024.

What was Suzano's (SUZ) shareholder return policy in 2024?

Suzano allocated R$2.8 billion to share buybacks and paid R$1.5 billion in interest on equity to shareholders.