Suzano (SUZB3) Q2 2025 earnings summary

Executive summary

• Pulp and paper sales volumes rose sharply year-over-year, with pulp up 28% and paper up 24%, driving strong sales and EBITDA growth.

• Adjusted EBITDA reached R$6.1 billion, up 25% sequentially but down 3% year-over-year, with operating cash generation at R$4.1 billion.

• Net income was R$5.0 billion, a turnaround from a loss in 2Q24, but down 21% from 1Q25.

• Announced a US$1.7 billion joint venture with Kimberly-Clark, expanding global tissue operations, and a wood swap deal with Eldorado to optimize costs.

• Announced a 3.5% production reduction over the next 12 months to maintain profitability and returns.

Financial highlights

• Net revenue was R$13.3 billion, up 16% year-over-year and 15% sequentially, driven by higher sales volumes.

• Adjusted EBITDA margin was 46%, up 4 p.p. sequentially but down 9 p.p. year-over-year; EBITDA for the quarter reached BRL 5.4 billion with a 52% margin.

• Net debt at US$13.0 billion, leverage ratio at 3.1x, and liquidity at US$5.9 billion.

• Free cash flow reached R$989 million, with adjusted FCF at R$2.6 billion, up 5% sequentially and 36% year-over-year.

• Average cost of debt was 5.0% p.a., with an average term of 74 months.

Outlook and guidance

• Cash production cost decline reaffirmed for 2H25, with pulp cash cost ex-downtime at R$832/t, stable YoY and down 3% sequentially.

• CapEx trend expected to decline in 2026, barring opportunistic investments; 2025 capex guidance revised upward to R$13.3 billion due to a biological asset transaction.

• US packaging operations expected to achieve positive EBITDA from 3Q25; Kimberly-Clark JV expected to close by mid-2026.

• Focus remains on executing current initiatives, deleveraging, and not pursuing new M&A in the near term.