Suzano Reports Q3-2022 Results

Record cash generation and advances on strategic agenda

HIGHLIGHTS
• Pulp sales of 2,797 thousand tons (+5% vs. 3Q21).
• Paper sales³ of 331 thousand tons (-2% vs. 3Q21).
• Adjusted EBITDA1 and Operating cash generation²: R$8.6 billion and R$7.2 billion, respectively.
• Adjusted EBITDA¹/ton from pulp of R$2,741/ton (+28% vs. 3Q21).
• Adjusted EBITDA1/ton3 of paper of R$2,812/ton (+61% vs. 3Q21).
• Average net pulp price in export market: US$821/ton (+25% vs. 3Q21).
• Average net paper price3 of R$6,905/ton (+40% vs. 3Q21).
• Pulp cash cost ex-downtime of R$883/ton (+24% vs. 3Q21).
• Leverage ratio declines to 2.1 times in USD and 2.2 times in BRL, despite the investment cycle.
• Cerrado Project completes 31% of physical progress and 24% of financial progress

Executive Summary:
The third quarter of 2022 was marked by strong hardwood pulp prices, thanks to solid demand and the lack of new production capacities. In a scenario of sustained high market prices, the Company showed sharp increase in realized pulp prices, which, combined with higher sales volume (the highest since 1Q20), resulted in record EBITDA generation by the segment. Pulp production cash cost varied slightly, still pressured by high chemical and energy prices. The paper segment set a new EBITDA record, up 58% year on year, driven by strong demand in all market segments and by operating efficiency. Adjusted EBITDA was a record R$8.6 billion, growing significantly over the already high result of the previous quarter.

Regarding financial management, leverage in USD, measured by net debt/Adjusted EBITDA in the last 12 months, fell to 2.1 times, despite the investments made and is in line with the Company’s capital allocation strategy. 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 operations (ZCC). Finally, the hedge policy was streamlined, with a wider range of net debt dollarized and the maximum term of foreign exchange exposure extended from 18 to 24 months. The Company thus seeks to hedge its cash flows more effectively in the long term amid the current foreign exchange scenario.
more at: https://s1.q4cdn.com/987436133/files/doc_downloads/2022/10/3Q22/Release-de-Resultados_3T22_ENG_vFinal_com-p%C3%A1ginas_SEC.pdf

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