SÃO PAULO--(BUSINESS WIRE)--Suzano (NYSE: SUZ), a global reference in the manufacture of bioproducts developed from the cultivation of eucalyptus, announces today its results for the 2Q20. The quarter was marked by the strong growth in pulp shipments, the favorable exchange rate and an excellent performance in controlling costs. These factors enabled Suzano to end the period with operating cash generation of R$3.4 billion, which is the best quarterly result since its merger with Fibria, which was concluded in early 2019. Adjusted EBITDA reached R$4.2 billion, which also is the strongest result since January last year.
Pulp sales came to 2.8 million tons in the quarter, which helped to reduce the company’s inventories by 200,000 tons. Suzano also sold 235,000 tons of paper in the period. The solid growth in pulp sales, combined with an exchange rate favorable for exports, resulted in net revenue of R$8.0 billion in the period.
Another positive highlight was pulp cash cost, which is considered the industry’s key indicator for the competitiveness of a company’s production. The result of R$599 per ton, excluding the effects from scheduled downtimes, was 14% lower than in the 2Q19.
“The 2Q20 numbers show Suzano’s capacity to generate cash flow, with successive gains in competitiveness driven by progress in the capture of synergies, even in a more challenging period. Given the most serious pandemic in modern history, our teams have led the company to our best result since the merger,” said Walter Schalka, CEO of Suzano.
With the strong operating cash generation, the company’s leverage ratio in 2Q20 fell to 4.7 times in U.S. dollar terms. Currency variation, which on one hand leveraged net revenue growth, on the other affected the financial result by generating a net loss of R$2.1 billion.
“The quarterly result reflects our operational excellence in sales and costs, as well as the beneficial effects from the weaker local currency. The same FX effect that leveraged cash generation once again also produced a negative impact on the financial result, due to the effects from currency variation on the company’s dollar-denominated debt. However, given the very long average maturity term of our debt of approximately seven years, the current level of the exchange rate is highly favorable for our company, which earns most of its revenues in U.S. dollar as well,” said Marcelo Bacci, CFO and IRO of Suzano.