By Brazil Stock Guide – Suzano SA (SUZB3, SUZ) reported a decline in first-quarter earnings as currency headwinds outweighed stronger pulp prices and higher sales volumes, underscoring the sensitivity of exporters to Brazil’s exchange rate.
Net income totaled 4.31 billion reais, down from 6.35 billion reais a year earlier, while adjusted EBITDA fell 6% year-on-year to 4.58 billion reais. The company said results were impacted by a stronger Brazilian real, even as pulp prices edged higher and volumes increased.
FX pressure offsets stronger pulp market
Suzano highlighted that the global pulp market showed positive performance in the quarter, supported by price increases and resilient demand for paper products.
Average net pulp prices reached about $562 per ton in export markets, up 1% from a year earlier. Sales volumes rose 7% to 2.83 million tons.
However, the appreciation of the Brazilian real against the US dollar eroded revenue in local currency terms, offsetting gains from higher prices and volumes.
The company’s pulp segment EBITDA declined 5% year-on-year, reflecting the currency impact alongside seasonal factors and higher costs tied to maintenance shutdowns.
Paper segment weaker on prices and volumes
The paper business faced additional pressure, with sales volumes down 3% year-on-year and average prices falling 8% in reais.
Adjusted EBITDA for the segment dropped 14% from a year earlier, mainly due to weaker pricing and lower demand in some international markets.
Revenue declines despite export exposure
Net revenue came in at 10.97 billion reais, down 5% from a year earlier, with 81% generated abroad.
Suzano said the decline was driven primarily by currency effects, lower paper prices, and reduced paper volumes, partially offset by stronger pulp sales.
Cash generation and leverage
Operating cash flow totaled 2.52 billion reais, down 4% year-on-year, while free cash flow weakened sharply due to higher interest payments and working capital effects.
Net debt stood at 68.1 billion reais, with leverage at 3.2 times EBITDA in reais and 3.3 times in dollars.
Suzano said its hedging strategy helped mitigate cost pressures, including those linked to energy markets and geopolitical tensions.
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