In the third quarter of 2017, the pulp industry continued to present strong and healthy demand. The commodity’s positive fundamentals once again supported successive price increases in all regions. Cash generation from pulp sales came to R$ 809/ton and sales volume was affected by the longer downtime at the Imperatriz Unit for completing the unit’s debottlenecking project. The downtime also affected the cash cost of pulp production in 3Q17, but the downward trend of the last 12 months remains in place for reaching the optimal structural cash cost.
In the paper segment, despite the more challenging scenario in Brazil, we were able to keep sales volume stable in relation to 3Q16 given our flexibility for redirecting products between the domestic and international markets. Cash generation recovered in the quarter to reach R$ 756/ton.
The increase in the Company’s cost and expense structure has lagged inflation due to productivity gains and the focus on cost discipline.
Our commitment to financial discipline is reinforced by the reductions in both gross and net debt, as well as by significant lengthening of our amortization profile (from 62 to 80 months). The leverage ratio remains at a healthy level (2.3x Net Debt/Adjusted EBITDA) and the total average debt cost remains competitive (4.4% p.a. in USD).
The Adjusted EBITDA² of R$1.041/ton and strong Cash Generation¹ of R$795/ton were other metrics in which we outperformed the overall industry. The ROIC of 13.0% reflects the positive impact from pulp prices, as well as from cost and expense discipline and the margin recovery in the paper segment.
We further expanded Suzano’s product portfolio with the launch, in September, of the production and sales of tissue jumbo rolls at the Mucuri Unit. In the fourth quarter, we will launch, on time and on budget, production at the Imperatriz Unit.
more detail at: http://ir.suzano.com.br/enu/6608/Earnings%20Release%203Q17_VF.pdf