Suzano S.A. (B3: SUZB3 | NYSE: SUZ), one of the world’s largest integrated pulp and paper producers, announces today its consolidated results for the third quarter of 2020 (3Q20).
HIGHLIGHTS
• Pulp sales of 2,527 thousand tons (stable vs. 3Q19).
• Paper sales of 319 thousand tons (+2% vs. 3Q19).
• Adjusted EBITDA1 and Operating cash generation² of: R$3.8 billion and R$2.9 billion, respectively.
• Adjusted EBITDA1 /ton3 from pulp of R$1,339/ton (+56% vs. 3Q19).
• Adjusted EBITDA1 /ton4 of paper of R$1,236/ton (+1% vs. 3Q19).
• Average net pulp price – export market: US$458/t (-13% vs. 3Q19).
• Average net paper price5 of R$4,081/ton (+1% vs. 3Q19).
• Pulp cash cost ex-downtime of R$600/ton (-8% vs. 3Q19).
• Capture of operating synergies in line with planning.
• Recovery of ICMS credits in Espírito Santo in the gross amount of R$146 million.
Executive Summary:
Despite the effects of the typical seasonality during this period of the year, Suzano maintained consistent results in the third quarter. In the pulp business, the highlights were the strong sales volume, stable inventories and a healthy production cash-cost in comparison with the previous quarter, once again demonstrating the continued gains in structural competitiveness, driven by the synergies resulting from the merger with Fibria. The performance of the paper business was boosted by strong growth in domestic sales, as a result of the seasonality of the period and with emphasis on the paperboard segment, after the second quarter marked by a historical decline in demand on account of the pandemic, especially in the printing & writing paper segment. The combination of healthy operating performance and the strong depreciation of average BRL against the USD fueled the 58% growth in adjusted EBITDA in relation to 3Q19 to reach R$ 3.8 billion.
As for financial management, in the third quarter the Company reduced its net debt in USD and leverage, measured by net debt/Adjusted EBITDA in the last twelve months. Its liquidity position remained solid, representing zero refinancing risk until 2022. Suzano has remained focused on financial discipline, as evident from its clear and consistent policies, and diligently plays its role of generating and sharing value in the long term.
The third quarter also witnessed progress on Environmental, Social and Governance (ESG). As part of its debt management, in September Suzano repurchased its bonds 2024, 2025 and 2026 issued by its whollyowned subsidiary Suzano Austria GmbH (“Suzano Austria”) new bonds to be placed in the international market at the principal amount of US$750 million. The new bonds have an environmental performance indicator (KPI) associated with the Company’s target to reduce greenhouse gas (GHG) emissions by 2025, which underscores Suzano’s commitment to be part of the solution to the global climate crisis and is aligned with the implementation of its Long-Term Target 2030 of reducing emissions, announced in the beginning of this year. Hence, the new bonds are classified as sustainability-linked bonds according to the principles established by the International Capital Markets Association. As a result, Suzano became the 2nd Company in the world and the 1st Company in the Americas to issue such a type of instrument, which allowed the monetization of the ESG aspect through the lower cost of funding obtained when compared to the issue of similar securities. This achievement keeps us motivated, after all it is only good for us if it is good for the world.
more detail at: https://s1.q4cdn.com/987436133/files/doc_financials/quarterly/2020/q3/Release-de-Resultados_3T20_ENG_vFinal_CVM.pdf