Revenue in Q2 2017 was $314.4 million, compared to $295.8 million in Q2 2016, an increase of $18.6 million or 6.3%. The increase in revenue was primarily due to higher sales volume and the favourable impact of foreign exchange on U.S. dollar sales. Cost of sales in Q2 2017 increased to $267.1 million, compared to $249.9 million in Q2 2016, primarily due to higher sales volumes, an increase in fibre and natural gas prices and the unfavourable impact of foreign exchange on U.S. dollar denominated costs, as well as higher freight and warehousing costs, partially offset by cost reduction initiatives and the impact of capital projects. As a percentage of revenue, cost of sales were 85.0% in Q2 2017 compared to 84.5% in Q2 2016. Net income in Q2 2017 was $9.9 million, compared to $12.0 million in Q2 2016, primarily due to an increase in the change in amortized cost of Partnership units liability of $2.5 million and an increase in tax expense of $1.3 million. These increases were partially offset by higher Adjusted EBITDA of $1.4 million. Click Read More below for additional detail.
Suzano, a global reference in the production of bioproducts from planted trees, announces its investment plan for 2020. The company will invest R$4.4 billion in maintaining and expanding its business. The amount planned for the year includes around R$200 million in expenditures that already were budgeted for in its capital expenditure plan for 2019.
The investments in maintenance planned for 2020 will amount to R$3.6 billion, while investments in expansion and modernization projects will require approximately R$300 million. The investments in projects involving the acquisition and/or formation of lands and forests will amount to R$400 million. Meanwhile, the ongoing projects at the ports in the states of São Paulo and Maranhão will consume approximately R$100 million over the coming year.
The company is announcing today that it will begin to manage, through its subsidiaries, approximately 100,000 hectares of land and a Construction License for a pulp mill with annual production capacity of 2.2 million tons, located in the Ribas do Rio Pardo region of the state of Mato Grosso do Sul. The assets, which already are recognized in the balance sheet, are strategically important for ensuring future options for growing the pulp business. In the short term, the company will continue to prioritize deleveraging, in accordance with its Debt Policy.
As an integral part of its plan for financial deleveraging through the divestment of non-operational assets, the company also announced to the market the signing of an agreement with Klabin for the sale of standing eucalyptus timber located on 14,000 hectares in the southern area of São Paulo state. The transaction is worth approximately R$400 million.
“With these series of transactions, we reaffirm our commitment to financial discipline, while securing new growth options for our company,” said Marcelo Bacci, Chief Financial and Investor Relations Officer.