Suzano Reports Strong Operating and Financial Performance in Q2-2017

Suzano Papel e Celulose (B3: SUZB5), one of the largest integrated pulp and paper producers in Latin America, announces today its consolidated results for the second quarter of fiscal year 2017 (2Q17).

In the second quarter of 2017, the pulp segment continued to deliver solid results, driven mainly by strong and healthy demand from Asia. The commodity’s positive fundamentals once again supported successive price increases in all regions. The weaker BRL also had a positive effect on industry profitability.

The paper segment remained pressured by Brazil’s caustic macroeconomic scenario. The Suzano Mais Program, which works to strengthen relations with agents at the end of the value chain, helped to enhance the profitability of the paper business.

Suzano continues to focus intently on its structural competitiveness by optimizing its cost and expense structure. A highlight in the quarter was the performance of our pulp cash cost, which once again was the industry’s lowest, reflecting the continued downward trend towards our target cash cost of R$570/ton² for 2018 and R$475/ton² for 2021-2022.

Another factor supporting the Company’s strategy was its capital discipline, with the efforts in this area validated by the performance of Sustaining CAPEX/ton, which, supported by productivity gains, has continued to lag inflation.

Our commitment to financial discipline was further bolstered by the reductions in gross debt and leverage ratio, which ended the quarter at 2.7 times Net Debt/Adjusted EBITDA. The Company’s Net Debt, which is 100% denominated in U.S. dollar, has an average cost of 4.9% p.a. and average term of 62 months, which represents a solid financial profile.

The Adjusted EBITDA³ of R$973/ton and strong Cash Generation4 of R$766/ton represented other areas in which we outperformed the overall industry. The ROIC of 11.3% reflects the positive effects from exogenous factors (pulp price and exchange rate), as well as the disciplined control of costs and expenses.
more detail at:  http://ir.suzano.com.br/enu/6434/Earnings%20Release%202Q17_FV.pdf

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