Suzano reports strong operational gains in Q2 despite currency-driven net loss

Suzano, the world’s largest producer of market pulp, reported solid operational results for the second quarter, buoyed by recent increases in pulp prices, higher sales volumes — particularly in the paper segment — and a favorable exchange rate for exports. Despite these positive operational indicators, the company posted a net loss of R$ 3.77 billion attributable to controlling shareholders, a stark contrast to the R$ 5.07 billion net profit recorded during the same period last year. The shift into the red was primarily attributed to currency depreciation affecting foreign-denominated debt and the mark-to-market of derivative instruments.

In terms of revenue, Suzano achieved R$ 11.49 billion between April and June, representing a 25% increase compared to the same period in the previous year and a 22% growth from the prior quarter. The company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose by 60%, reaching R$ 6.29 billion, with an adjusted EBITDA margin of 55%. This margin improved by 12 percentage points from the previous year, underscoring a reduction in cash production costs for pulp.

Suzano’s cash production cost, excluding maintenance stoppages, was R$ 828 per ton — a 10% year-over-year decrease, though it was 2% higher than in the first quarter of 2024.

During the second quarter, Suzano’s sales volumes reached 2.88 million tons, marking a 3% increase from the previous year. Of this total, 2.55 million tons were pulp, up by 1% from the same period in 2023, while paper volumes amounted to 333 thousand tons, reflecting a 13% rise.

Operational cash flow more than doubled to R$ 3.5 billion, supported by lower cash outflows as the Cerrado Project nears operational status. Concurrently, investments decreased by 37%, totaling R$ 3.96 billion for the period. As of June, the company’s financial leverage ratio stood at 3.2.

“It was a very strong quarter, driven by improved pulp prices, with robust demand in Europe and the United States, and some challenges in China”, stated Beto Abreu, Suzano’s newly appointed CEO. He also noted that the combination of higher pulp prices and the advantages of a depreciated exchange rate for exports had allowed Suzano to begin its financial deleveraging process even before the new plant’s operations commenced.