Suzano Reports Record-high Operating Cash Generation¹ of R$3.5 billion in 2017

Suzano Pulp and Paper (B3: SUZB3), one of the largest integrated pulp and paper producers in Latin America, announces today its consolidated results for the fourth quarter of 2017 (4Q17) and for fiscal year 2017.
2017 HIGHLIGHTS
• Record-high Operating Cash Generation1 and Adjusted EBITDA²: R$3.5 billion and R$4.6 billion, respectively
• Strong operating results: record-high pulp production and sales
• Lowest nominal cash cost since 2014: R$599/ton
• Cost discipline: COGS/ton performance (-3.28%) lagged inflation in the period (+2.95%)
• Important advances in the Suzano Mais Program and greater flexibility in allocating volumes to the domestic and international markets
• Financial discipline: reduction in net debt; leverage ratio³ of 2.1 times; reduction in debt cost; rating upgraded to investment grade
• Liability management: placement of 30-year bonds in international market; reopening of 2026 and 2047 Bonds; repurchase of significant portion of 2021 Bonds; prepayment of liabilities
• Capital discipline: investments in line with initial budget and distribution of dividends based on operating cash generation
• Fluff: higher production and sales volumes
• Tissue: startup of production and sales of jumbo rolls and acquisition of Facepa
• Lignin Project: startup of production slated for 2018

MESSAGE FROM MANAGEMENT
The year 2017 was marked by the pulp industry’s strong performance, reflecting the growing demand driven primarily by Asia, and events (stoppages and conversions for other types of pulp production), mainly non-scheduled, which eventually limited the product supply. This combination of market fundamentals supported strong price increases during the year.

At the same time, the Company continued to focus on its strategic pillars of Structural Competitiveness. The ongoing optimization of its cost and expense structure was reflected in the pulp cash cost, which reduced 3,8% compared to the previous year and lower nominal value of the last years. This reinforces Suzano’s objectives to reach the cash cost of R $ 570 / ton¹ in 2018 and R$ 475 / ton¹ 2021-2022.

In the paper business, in 2017, the Brazilian market remained pressured by the macroeconomic scenario. The Company made important advances in the Suzano Mais Program, which enabled it to keep margins stable and to maintain its flexibility by successfully allocating volumes between the domestic and international markets.

Moreover, during the second half of the year, Suzano launched production and sales of the tissue paper manufactured by its units in Mucuri, Bahia and in Imperatriz, Maranhão. The Company also announced the acquisition of Facepa – Fábrica de Papel da Amazônia S.A. and launched the first brand of toilet paper in its portfolio, Max Pure®. In 2018, therefore, the Company will launch sales of finished goods in key markets of Brazil’s North and Northeast regions. With the expansion of its product portfolio, Suzano effectively creates value sustainably, maximizes its asset base and narrows its relations with end consumers.

The year 2017 was marked by achievements on other fronts as well. Finance discipline made possible liability management transactions that helped to significantly lengthen the average term (to 84 months) and to reduce both borrowing costs and its leverage ratio (to 2.1 times).
more detail at:  http://ir.suzano.com.br/ptb/6711/595675.pdf

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