Suzano, the world’s leading pulp producer, commemorating its centenary this year, unveils its financial performance for the first quarter of 2024 (1Q24). The standout feature of this period is the significant advancement of the Cerrado Project, marking the largest capital investment endeavor in the company’s history. Situated in the municipality of Ribas do Rio Pardo, Mato Grosso do Sul state, the construction of the new pulp mill is now at an impressive 94% completion rate and is slated to commence operations within weeks. Once operational, it will stand as the world’s largest single-line pulp mill. With an earmarked investment totaling R$22.2 billion, of which R$19.1 billion has already been allocated by the end of April, the new facility is designed to boast an annual production capacity of 2.55 million tons of pulp. This pulp is utilized in the manufacturing of various products such as sanitary papers, printing and writing papers, and packaging paper.
Despite the combined impact of the mill’s construction investment and the recent downward trend in pulp prices, Suzano’s US dollar leverage at the close of the quarter stands at 3.5 times, falling within the confines set by the company’s policy.
Walter Schalka, CEO of Suzano, remarked, “This project is a pivotal moment in Suzano’s journey, signifying a significant cycle of value enhancement for the company. With the addition of this new facility, Suzano enters its centennial year even better positioned for growth, benefiting all stakeholders.”
The financial results also mirror the upward trajectory of international pulp prices, coupled with stable production costs compared to the preceding quarter, alongside seasonal variations in sales within the industry. Suzano reports an adjusted EBITDA of R$4.6 billion, with operating cash generation reaching R$2.5 billion. Total net revenue for the quarter amounted to R$9.5 billion, with Suzano recording a net income of R$220 million. The quarter concludes with net debt standing at US$11.9 billion, inclusive of Suzano’s share repurchase program and interest payments on equity.
The cash cost of pulp production, excluding downtimes, is reported at R$812 per ton. Pulp sales for the quarter totaled 2.4 million tons, with paper sales reaching 313,000 tons.
