Suzano Reports First Quarter 2023 Results

The more challenging macroeconomic scenario and market pulp fundamentals pressured the revenues during the quarter. The decline in pulp prices and sales volumes in relation to the previous quarter resulted in lower adjusted EBITDA from the segment compared to 4Q22. The paper business unit registered EBITDA per ton growth, driven by better prices despite lower sales volume associated with a strategy to recompose inventories. Consequently, adjusted EBITDA in the quarter came to R$6.2 billion, down 25% from 4Q22, and 20% higher than in 1Q22.

As for financial management, leverage in USD, measured by net debt/Adjusted EBITDA in the last 12 months, reached the lowest level post-merger, ending the quarter at 1.9 times despite the cycle of investments. The result of cash flow hedge operations once again attested to the long-term consistency of the financial policy in managing foreign exchange risk, with positive mark-to-market and cash adjustments in cash flow (ZCC) and swap operations.

Continuing the advances made in its strategy, within the context of the “Maintain relevance in pulp, through good projects” and “Be best-in class in the total pulp cost vision” avenues, the physical progress of Cerrado Project remains as expected, reaching 57%, while financial progress was 43%.

In line with the “Advance in the links of the chain” avenue, the Company received in April the approval from Brazil’s antitrust authority CADE to proceed with the acquisition of Kimberly-Clark’s tissue business. After CADE’s approval, the conclusion of the deal is still subject to the fulfillment of other conditions precedent typical to such transactions.

Lastly, within the “Playing a leading role in sustainability” avenue, the certifying agency Verra concluded the certification of 1.7Mt CO2e eligible for issuing credits. However, the Company has not yet issued said credits, and revenues will be recognized when the credits are sold, after deducting costs, if any.
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