Suzano (SUZB3) Q1 2025 earnings summary

Executive summary

• Q1 2025 results aligned with management's plan, with inventory rebuilt to normalized levels despite concentrated maintenance downtimes and heavy maintenance limiting pulp volumes; operational readiness and cost discipline remain strong.

• Net revenue reached R$11.6 billion in 1Q25, up 22% year-over-year, driven by higher sales volumes in both pulp (+10%) and paper (+25%), and the impact of the new US packaging operation.

• Consolidated adjusted EBITDA was R$4.9 billion, up 7% year-over-year but down 25% sequentially, with margin at 42%.

• Net income surged to R$6.3 billion from R$220 million in 1Q24, mainly due to positive financial results from BRL appreciation and derivative gains.

• Strategic focus remains on deleveraging, disciplined capital allocation, and strengthening competitive position amid escalating global uncertainty.

Financial highlights

• Pulp sales volume: 2,651 thousand tonnes (+10% YoY, -19% QoQ); paper sales: 390 thousand tonnes (+25% YoY, -9% QoQ).

• Adjusted EBITDA: R$4.9 billion (up 7% YoY, down 25% QoQ); margin 42%.

• Net debt stood at R$74.2 billion (US$12.9 billion); leverage at 3.1x in BRL and 3.0x in USD.

• Free cash flow yield (LTM): 18.5%, up 3.2 p.p. year-over-year.

• Net financial result: R$7.7 billion income, driven by FX gains and derivatives.

Outlook and guidance

• Cash production costs expected to decline in coming quarters, with Q4 2024 as a reference for 2025.

• Management expects total operational expenditure for pulp to reach R$1,900/t by 2027, in line with the plan.

• Cerrado project capex is 97% complete, with R$0.6 billion remaining for 2025.

• Free cash flow generation anticipated under any pulp scenario; US packaging operations expected to reach breakeven soon.

• No anticipated impact from OECD Pillar Two rules on financial statements.