Suzano (SUZ) 15 May 212021 Q1 Earnings call transcript

Ladies and gentlemen, thank you for holding and welcome to Suzano’s Conference Call to discuss the Results for the First Quarter of 2021. We would like to inform that all participants will be in a listen-only mode during the presentation of Mr. Walter Schalka, Chief Executive Officer; Marcelo Bacci, Financial and Investor Relations Executive Officer; Fabio Almeida, Paper and Packaging Executive Officer; Leonardo Grimaldi, Pulp Commercial Executive Officer; and Aires Galhardo, Pulp Operation Executive Officer. After the company’s remarks are completed, there will be a question-and-answer session when further instructions will be given. [Operator Instructions] Before proceeding, please be aware that any forward-looking statements are based on the beliefs and assumptions of Suzano’s management and on information currently available to the company. and depend they or on occur the uncertainties events to may risks, in therefore and circumstances future. involve assumptions relate because future not They that may

other economic results future Suzano statements. those and to industry general expressed affect results of that cause materially understand could also should conditions You and differ operating could in factors the forward-looking conditions, from such

proceed. Schalka. to Now, floor Walter Walter, the like Mr. turn Please, I you may would to over Mr.

It’s a quarter Good pleasure good day. Today, session. Suzano. – morning the to everyone. the we Welcome very all first a and with it’s end be the With have session, your today. on At will results great the you executive we afternoon important to of committee. be Q&A the of answer us ready to here, videoconference to

I for think day a it’s us. historical

operational only the not announcing company are the extremely future. for preparing We but good we are results,

terms the As the pulp you announcing capital keep the are we quarter. I discussing that have relevance start allocation to be been conditions, precedent may there approval Cerrado first you the this And we the to going we for presenting and we on future. know, for today that have would the one on would that are of about our alternatives share to of them several market we and had during certain you are to several with Project session. like highlights operational video

the about pulp mentioning volume. First,

very million We are market this positive to environment. tons quarter. ending is X.X sell able There

lagging geographic regions on all capture and its able since specific We the mix. yet to process are we certain have this development different in price not

in this a geographies. we very on large have different know, you prices during dispersion quarter As

with very comparing back On the comparing last extremely we with we the are quarter XXXX. last coke have that paper before we performance the stable year. COVID-XX come good issue first And had the the quarter inventories, level sales same at that of with market, the

best represent Just the BRLX.X higher more seasonal We year, the that first an the all last we for Even able had We of moments. you are the the of going benefit to quarter of few at first not of of are is not could billion in to so lead positive. a had remembering year. as comparison have at EBITDA pace, increase the this quarter a quarter us than XX% extremely billion the deleverage and cash mention during the than quarter reasons usually yet. to price this BRLX.X flow faster operating company to we adjusted

quarter. Our and prices I’d cash and per cash time on that fast going give extremely has a very this to with exchange higher position very But costs, that rate marginal strong the ton, have the increase you cost chemical on a could BRLXXX been pace. billion. warning down was FX at to a combined $X.X competitive. liquidity point A the of next costs like Net debt Brent at

we last of had year, $XX.X end remembering billion. Just

this projects. quarter. and a in are X.Xx be is between showing prices of of right it’s have have and that was higher the benefit going decrease That the last our during And roughly End now, X.X%, on results. level expansion we pace. effect of of down fast $XX.X better year on very $XXX positive policies X.X%, a and Now extremely the we financial at our million leverage Xx approaching Xx billion, in and

us. discipline financial is critical Our for

going going with is packaging on Fabio moment business. new a matter in to project. discuss paper the that performance to to now, you project, And floor share Cerrado, to this the of going is The are about conditions the Project am and and We our under yours, I our Fabio. pass

connection. in is Fabio having problems Walter,

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great. Okay,

good Walter in am here. the everyone. about presentation. Please Slide to Thanks, I #X connection sorry let’s the and turn problem morning,

the packaging XXXX. business imposed results Brazil, results. look second the wave excluding several year-over-year of packaging unit business better unit, quarter compared first by Suzano recovering our and when of solid delivered and the challenging business a paper pricing. paper business and international in The markets units paper in at and therefore, are Despite figures COVID the overall a Consumer Let’s for indicating specific demand presented basis, to performance domestic packaging the here

recovering our impact demands top X figure, first past the indicating best XXXX at QX the years, you been in for graph and As year. quarter terms major can last our the has sales in after volumes see look of

total quarter sold XXX,XXX the in recovery the is XX.X% our of a have which XX.X% and increase sales, the for below to in first paperboard We quarter by mainly sales the seasonality in a XX.X% demand demand were is XXX,XXX period. XX.X% between XXXX, products represented due of packaging tons of to XXXX, basis. year-over-year Strong year-over-year XX% have led approximately mainly first which to totaling during strong of tons, on sales we increase XXXX, grown market QX due paper periods. the the Domestic the our quarter, domestic a compared

demand Our domestic the second and XXXX. reflecting of paper by writing recovered, grew on which X.X% started a also year-over-year half print sales continuous basis, in

more quarter-over-quarter. to our logistics suffering the year-over-year first X.X% Rising with sales prices a better of growth paper quarter weaker bottlenecks. markets in higher with and conditions. continuous exporting of markets. and that, from And X.X% totaled pulp costs XX,XXX in international logistics pushed are Our Mainly international allowed a reduction a at coupled tons support XXXX, Suzano still real,

Looking average last and BRLX,XXX prices than note prices average ton, being totaled at our prices that per can X.X% in side, X% quarter lower our our than QX the higher year. QX we during higher left the of

price serve. to During and we the period, markets has increases to indirect multiple its announced all Suzano portfolio

these We expect the of come. increases price full implementation to in months

totaled our lower a BRLXXX the million a higher quarter-over-quarter basis that in seasonality on this at basis, mainly year-over-year periods. lower between of XXXX, and slide, X.X% on of EBITDA quarter note Looking the due to we right first being XX.X% part can

for all-time paper record margin which EBITDA business. BRLX,XXX Our packaging an the reached has is and ton, per

Now, I would the business present unit. our pulp Leo to to like results invite of

Thanks, Fabio, morning, good and everyone.

now to X So of our Page let’s presentation. move

you this will regions supported low still results first of quarter were pulp the volumes positive and all our note, solid business increasing XXXX, units at in sales by As with prices stocks.

several market first perceived and give to which the to we recap fundamentals, Just support continue Q on point, align the factors a which positive after the the quarter, quarter. throughout the inflection during ‘XX, this in fourth market present were first

production this quarter, have have have side pulp during book even both the producer we of we market side, low XXXX even and further container logistics unplanned, inventories challenges supply which reached When planned we supply trade, the the the On noticed constraints equation. and further on shipments, availability shortened on add break note of coming the the into downtime pulp.

as as grades, strong trends positive levels and side, also noticed tissue, all in grades, of consumption demand China’s the demand been economic world. well all other have a products end markets. has to the consumption specialty mentioned well the as On and paperboard printing production we as paper regions of from in of in and recovery of paperboard, exports supported recovery positive rates XXXX these writing by

increase been these support Additionally, in positive noticing help and price paper we obviously in grades fundamentals. paperboard most all which implementation have markets,

all like taking of that team and the recognize Regarding chain to remaining swift all the the been uninterrupted moment, of has in health mills and this pandemic very critical for quarter, would actions our operation focused for our strict, I and employees safety in on supply protocols very production COVID-XX our system. our

volumes and bring we inventory quarter, X.X have fourth mentioned, numbers These to million low pulp, the Looking in we are our which sold, endeavoring facing. sales. been problems supply the with caused at our needs to is efforts by and as scenario of in quarter, this our us for a market we and tons for levels that Walter constraints best line chain our have quarter consequently ideal turbulent customers’ meet logistics

tons months the for sales market pulp. reached last XX.X million of Our XX

prices, increase the were quarter fourth compared is prices per in sales when quarter, ton. Our which have first When first also in Brazilian BRLX.X strong a EBITDA terms, quarter, in in the XX% for reals per we to or to average an $XXX export factor EBITDA the presented the in which margin. quarter of a ‘XX, and equivalent both the to BRLX,XXX ton reached BRLX,XXX being the ‘XX, XX% in figures U.S. million we dollars reached or ton increase equivalent per

to continue of we shutdown on be in the is the continue forward, to logistics, invite be the supply our strategy, back execution hemisphere, focus supportive. season, low addition for be next constraints continue With more mentioned fundamentals, losses our curtailments production continues to positive spring northern news major Project. to and strategic due in advantage like before. I order our so now very would to to Demand continues taking solid Cerrado demand on all to give expectations. production unexpected said, in as he I intake and that inventories, to the producer tight, which and of also Looking us considering still Supply commercial maintenance Walter markets, mainly the according to can that in global pulp our bold move, happen

with trees implementing great important life future. you the in It’s to have our you that last you to years. a very been share view our Thank tell we you, that renew opportunity discussing been It’s have the to about Leo. with several we purpose,

for to is but extremely moments side very to the would to a And important you important But environmental to the this ambition of very few project, our side, share society not with project this be details and is this only in impact project. on stakeholders. it as Our to is well. in positive the there economic – the going you social is it’s of about Aires vision mention all specific you. with

sequestration on years. impact environmental will shareholders value one coming good increasing through energy carbon will as in renewable effect our but side, create extremely benefits in our well have for through We increasing the our the and we

to system that see cost cash project the very world. announce policies. condition next in the cost and the close lowest certain to lowest specific our We follow under would can cash in financial and to this important probably And Board that the be first approved the conditions. very slide, you our is project going a Yesterday, the represent are very pleased of it’s very precedent

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in in short this use we technology announce been the a have And how of hopefully, in to use are going time, negotiations be with that. to able We we and discussions with whom for future. will and period

On the have moving with Slide that ahead strategy. been we see can you long-term #X, our

our have cash we This of of even to telling avenues cost of It’s are cost One average that system. the you with this better market. industry cost our is cash all the been pulp have be lowest our on of relevance to to competitiveness our the cash since the plants. going on during is we increase going Suzano comparing the going Day

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is increase that and economies scale, as will our important We well. of

of capacity We are going exceed tons system. our million total on to XX

that expand will project. We with believe we market addressable this the can

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we our ESG to our this week future project. the announce results higher even we will We that website. next on going pleased with targets very And have are were for

the that the region. are on impact side as We creating good and on a environmental extremely major specific country well, social

bit little going project. Now, that pass I am details a going Aires to is to explain this of to

region greatly and great Thank contribute Brazil. Good you, Suzano developing the this to a Walter. It’s economy will investment the in pleasure Grosso Mato do the of here be state to morning, you important that in the with of everybody. growth Sul announcing of

city excellent in base. surplus, million in system and of is This As be This the system Sul, of a Ribas combination efficient produce year, following you state do per of able total energy already our and megawatts know, Rio average; asset XXX supply an a and the competitiveness cost approximately tons factors: Mato treatment the of XXX of the Cerrado from to the of logistics is do Grosso will new cost production have Capital a in kilometers of leverage Campogrande. of the our XX modern kilometers; export in generation Pardo ratios it residues. for supplying of the lowest the eco-efficient in will plant result project pulp located production X.X

inside quarter and infrastructure, that invest the of of Our direct and estimate that of necessary the CapEx BRLXX.X industrial the to FX billion, will costs considering X.X%. is fence first project, in is the CapEx the XXXX Cerrado startup

the give I address to will the of floor project. financial who Cerrado Now, the Marcelo, issues

Thank you, Aires. Hello, everyone.

value XX, to in project Page position that must be determines we of us. the This Suzano will scenarios. to always production I’d Cerrado generating its enhance asset will more even seek of that is for like emphasize low-cost low-cost special a is globally. production it’s the that Moving sense to very in very

be following to with Page CapEx be concentrated show ‘XX. the will billion XX, in this XXXX year On XXXX, page, and the only spent that we BRLX.X expected in

years. for have the We company over preparing the last been that X

prepared our onwards. our therefore, are schedule years execution basis, in forward, that will with and Moving And constant maturities cope to we’ve where variable. on CapEx XXXX maturity be concentrated the the to a maturities debt

additional are from we So the very view CapEx. point financial well this of cope prepared discipline with to

forestry to our billion page, program million including of related XXXX CapEx related industrial following BRLXXX plus result project. of Cerrado infrastructure to BRLX update CapEx and of also project, the CapEx as additional this On for we the a announcement,

So billion total of BRLX.X now CapEx. the year is guidance for the

we key XX, would to this Moving of highlight project. Page points the like to

as pulp. we First, cost very will the applications project with plant at pulp have additional the time, And our a be the so result the market will advantage applications continuous the new same it eco-efficiency will our our to that the with pulp of the of advancing years the with forest the growth is that and in significantly demand relevance and current goals enhance of that we over in will we Moreover, improve in the high us. important new ESG bring. belief

additional new change mitigation contributing So will energy that the climate this with region the to the inequality. forest will be exports, to be plus renewable impacted development plus of

We experienced our this a record with in of team projects a have, team, good very implementing very nature. in track

only size the will of generated that internally the now project confident budget. deliver Suzano that important new a this on very are we project we to which flow. So ability with a and at we this And is has able bring be on time time, this project with same implement point, to cash

to have that planning on position on have to years. the project-specific cash that compliance any the with financial today, this be we’re cash not absolute And take done rather the are financing, our but with flow new we going policy, rely will discipline. coming financial generation to plus We all over

around had So this this expansion past. cycles time when the is different we other in compared that very to

to move the conclude we ready the Q&A that, presentation, we’re to with and So session.

Instructions] [Operator Our Thiago comes question Bradesco. first from you. Thank Lofiego,

Thank guys. you. morning, Good

on questions two So my side.

the the that know, year little for under roughly like to or The the And of internal for like just XX% is You exactly potential you we something equation better. What rate as would this better the the right? Is this mean? side, XXX,XXX little this about project’s As of on right? XXX,XXX question, then second forestry far would project, CapEx supply the the understand I return. should the the involved contracts. So hectares, mentioned I like project, and hectares about long-term it first equation it’s own understand bit for the wood but does project already? first already new how to requirement the a one, just is wood demands I a think for project?

You be how with maybe maybe you of numbers? could to for very just rate maybe analysis mentioned What per a range scenario, BRLX, return, sensitivity scenario, $XXX with a there. the put like project would internal pulp range. slide understand and you BRLX some more the But a or us us asset goes the in give negative and ton

your question. Thanks for

side, on ready already again, X first mill. new means we the of most volume already mean, that, first the the That for wood contracted start on By wood the that, side years. So, we a for have I the to cycle. are

can maybe the versus needed additional could little term, be etcetera, you CapEx the leased what and estimate percentage tell to Carlos, land, for a the us ballpark land a us longer better? new owned of – understand bit

Yes.

right a can relevant I can that volume part onwards. plantation any Due basis being end of established. will and have and the I can the we information, commercial cannot increase our or for expanding the of we such other you now comprehend pace say to say forest only this By time will are all from is sensitivity our information the now. like sensitivity So that already the plantation we now hope area that that of disclose year,

Of course. thank you, Yes, Carlos.

But a this of us will pulp necessary read say very project that generation in positive too flow And sense of after be below is in always scenario, return of generation the the share shows generating value from scenarios, we your to above that the be, is cash, Thiago, return, course, positive to is are we our potential any in different the And capital. not be pulp numbers prices, have In I a too here. few according the analysis internally to cash not your cash you will the and that analysis to present value of have a history you. project only CapEx. report, prices. that what understand position specific will this I to the in different with of can to internal not relation cases, sensitive net most internal in But our view. rate from again, your of cost very the this analysis

you, Thank clear. again. you, That’s Carlos, Bacci. Thank

Staphos, Our next question comes America. Bank George from of

luck you positioning for just good Thank everyone. Cerrado that the be comfortable back how with what the project. way radius, go morning. think the had My guess should of but the and position how residuals, Hi, the cost could system. basket mill makes And to your of it I in be to around about existing the contributes fiber the mill the to cost details cost quantify will that a and Good going wanted versus you follow-on to the rank is results. there’s that or it’s question the logistics stack versus regarding then the you if wood a I mill? lowest we

It’s you It’s one of that question. you, our for this important to strategic and George. mention overview is views Walter very key to our answering to increase Thank to the competitiveness. future

is of have total area. As and factor critical it’s logistic number a to cost, OpEx on future that There the and combining we have you you we been industrial been telling know, the forest, CapEx our the working. disbursement that

all Specific asset extremely as every others. been the of in and this base. be And reason than more working to lowest the our project wood total know, first, XX% cost that to of Cerrado have you competitive. our going single in represent dimension on the going is the would of be behind We of is the plant

exit trucks chemical have discount very cash per as with as We us, of our In be degree is of much with total lower cost the average wood total but you very are with There to important as and could costs are to off-roads higher well. going our low only energy cost, industrial export a the to decrease well. side, in not going the know. is bigger we It’s trains. are trip that more to this may distance And going trucks, going plant. to bring with to operate more

of combine that going And our pulp going any you to for to If combining see system. this this you FX all mentioned, the the these alternative is Marcelo cash are reason and that single other any plant we behind going are is of that price in believe, plant than be as to we issues, generate future. lower

you. thank Walter,

point of benefit what you And over assumption a project clarification Just would turn the for cycle? of then question, in, energy I it as over. say, other the my we the will course baked energy your have to

what’s in? here in terms today been additional we new What based of happened, we been have just pricing has on cost that what asking As cash we see But should about embedded we in benchmarks. the that’s pricing inflation in any by have. sit benefit should expect bake pricing Q? published pricing in initiatives accepted And that from inventory might not you reflected customers, already you what that the XQ? should I’m and for

you, Thank George.

The question company, energy major sales cash the cost. a Just an complementing related will add your to operate plant this with we grid. with

going years. today, not guidance any tell information we energy are during on what going but that We to today, But different I not last the not disclosure from be prices. have it’s can to you about

plant. high. it’s the years, is if of price very the have is energy this if amount course, the price average the same that today, future Of compare calculations But exactly of in the that today, this use we the last for you we

clear. Very

the talk Now, about will Leo market.

George. Yes, sure. Hi, morning. Good

a are quickly levels So maybe America, as China, these you, also are. prices. implemented $X,XXX. we some talking that especially announced these U.S. It as prices. now bear the the to these market is the price price increase have changed both April of important you $XX for prices and North directions, announced is about recently of our for which actual of that and the local to May price with mind implementation in conditions it’s little new strongly up for so And believe that to per in that at prices current bit were to curves a support are such mentioned prices, bringing BRLX,XXX fully also mention announced know, realization Europe $XXX the we ton but and all delays, announced lately no they a I as factors, or are that the result has following the discount down, in of this when indexes being delays moving the the important And from fully and or

our for can noticing indexes all have We we coming some the but all are up taking And of prices to again also more geographic have will all been and say to assured that we in the of only China the prices customers the days fully structures system, That’s XX not impacted that due the across that been different also for mix, to quarter. to price realized rest now been they we late all catch Also, also as the even but up. lead are which reporting. throughout have these shipments in announced offering higher world. now being customers, please are implemented, all

Our Corretora. Sassoon, next comes Itau from question Daniel

everyone. and taking project approval My for to first to question on my Hi, is related the potential the this comes good question of project. morning the project. on Thanks upside congrats

regards eventually higher – think the second X as you X.Xx would to point volumes think CapEx be the price then at And have you there is my more the on could ratio years, bridge which the of peak debt-to-EBITDA for the the CapEx, regards For so X.X capacity? even projects following debottlenecking room part in it do instance, policy? you of not the net front. that project? pulp your that to the question million In tons is are nominal of flexibility postponing Do capacity of of which than to the in or

prices. increase of do If full that the final pass-through you think perspective? they been to a ability mentioned could recent comment Which of the have pressured you you clients seeing more margin just customers are your from your on on

propose increase moment, capacity. X.X follows the the your company and million of of seek to in foreseeing can to from volume. in respect curve, the – investment dimension the price return learning initiatives With Daniel. morning, plant general we at maximum following access the are is first this production But order this question, possible total to the to Good bottlenecks production tons. complementary the project capacity Usually,

hoping margin. question to paper Leonardo. related now So go I your related When this increases, producers, or is to Daniel price – second

been even in done these seen prices the we effectiveness increasing most during as them will terms levels, of In again. these but new printing producers – The announcements more their raw As also tissue, all-time be effect pulp currency has levels is low In to seeing, recover have we increases for significant though been some paper and see price past material price are. levels, market And in the made first from and abroad terms, allow reaching or increases high round of increases months supportive high they grades RMB recently, we board have in to China, are writing fluctuation specialty as fluctuations, increase as a presenting as markets, and XXXX, local challenge presented for holiday. have these inflation. all price the markets. other has being Day the This all of well price speed about ability trying price players a before price major increase segment December this new with as And of the very watching increase price to of fundamentals can share roughly their to implementations important China equation lease move recently In tissue to and market to very happen been in sizes the all and the and be in be are we closely also new the their our this in the at this producers a And announced business. RMBXXX we Labor implementation. increase of the dispute do different competitiveness our ability – just make that’s speak. or among this so in will to to view, being is are RMBXXX. their

guys. you, Thank

Marcelo was question bit yet. answered second about the not think a answer could that I little

the major with the equipment CapEx still Daniel, negotiating Yes, flexibility, suppliers. on we are

So the modified. logistics advance why or But It’s important structures the time if other CapEx CapEx we that, or additional than related necessary. not, CapEx this outside can one reasons CapEx to point, to minimize still of are announcing schedule forestry to are the the be over we alternative considering CapEx. at more items because

At will to additional the have CapEx XXXX, certainly this in we years. the have will manage the minimize in point, some So have first room tried we volume flexibility. year but we to

Thank Perfect. you.

comes Correa, Pactual. question next BTG Our from Leonardo

Thank everyone. you. morning Good Yes.

back started the and at The leverage then, first had impact looking was right? [indiscernible] an net XXXX, BRLXX negative and Suzano’s for changed, BRLX currency question consolidating acquired the Marcelo, right, the Suzano debt billion. numbers early that numbers, billion, unexpected Since Fibria number in clearly, Marcelo, about when

can on right? high, type seen new we’ve and your the always, up maybe debt. wanted this you again, see just go the on debt still this targets with and EBITDA the debt. evolution you has we and prices But And time has currency deleveraging right, seeing right? question, get changed net announced net the basis to So the I very BRLXX how where on been big in trending, project that. know thinking changed. what being for improved absolute at generation see a and understand never debt effort cycles on I headwind, [indiscernible] would maybe as So of many completely I net through and now are thoughts of billion absolute net in your Walter. a the is especially right? thoughts focus if [indiscernible] second down And of to BRLXX – you you terms denominator, of markets, on billion be lived that we’ve aggressively [indiscernible] an has quite mean that where just

dispute process have been right, guys at Just back to moving how and now and the improved. turmoil the you this the on more net thought approval the under I on environment, the basics, is a of thinking perspective point? shareholders. thinking the leverage from right? region why in understand manageable cycle is But main competitor debt-to-EBITDA big competitive with mean I still between just the a

region. project a the have doesn’t it moving any So that seem to competitors up been in approve

more say, the execution. guys viewing, bit you on project of thought environment the Thank much. a very So let’s why are I and process just wanted now to for how understand you

Leo, your thank you question. for

the remember of because at it billion. debt we believe our keep is denominated is or dollar have in our we generate This net our merger, indirectly the XXX% that this which cash $XX around terms the all. after of currency is to in debt, to in currency net In indirectly right which terms And debt the that looking was flow. we

posted $X.X billion debt. reductions significant In on of down reduction the came the our years. coal in we year, of We’ve of that a even this by we reduced year, very year, So been of difficult our first $XX number sequence history. a years quarter the we had this net that nominal And like last XXXX average where in debt. lowest price billion, billion, over from so of doing the $X.X we scenarios even in net

a gave our of we net So number have merger, we’ve the the the around billion. of to goal to moving been the time that very along we debt By $XX was well market gave. direction

course, basis, ton about capacity. we approaching on per $XX talk a and that of We per that around be are number when billion $XXX of would ton

So $XX.X to mean if about capacity billion. adjust new would the you billion that $XX to that

even the So be during well will below execution phase we the that of project.

this do which policy. of EBITDA we, at of us our EBITDA, that an prices. when number debt nominal the $XX even well approaching the will And established well idea keep course, in also in scenarios, is we in and and manageable even relation that at the be see in is we that that today be consider to But the very very within scenario leverage favored by will have to the positive year this we We on we a ourselves don’t absolute our projections more forever our is basis point, the limits difficult on time, in pulp to course, over billion high. believe we end the relative is a and of fact to financial

And we’ve project well. asset right that precedent global but our the believe competitiveness our now a thank the addressing local vision expand have logistics share this the mentioned good in and always not short very materials. the project. the believe question. this increase share, going we Leo, and This we demand discussing we believe return system proceed policy going to the area all second And combining Marcelo the we allow to to all that to have relevant now. infrastructure. addressable in period fiber bring social we of are the permits as market respecting, not this have that our our that that base And of We for as we position other that reached we balanced of organic time, is with financial only side reason allow on project we with you come be the believe right much the higher We only a believe forest And and terms can shareholders. will all but government. growth gain region, almost proceed, with to that conditions that to believe been years that you to and in We our industrial market your of the to for to supply the we preparing for very would could all conditions market the of future. financial that is ourselves are over decision the have disputable the conditions the

that this and first for we may balanced see, at this As you new would commissioning have XXXX. plant be the that project. Then our time, the be would market is to of the quarter ambition believe positive in

you, Marcelo. Thank Walter and

Our next Carlos Stanley. De Morgan question comes Alba, from

much. you very Yes. morning Thank Good everyone.

attractive about us cannot even can discussion deliver this cost horizontal to little to logistics to more system? much the I sense cost, how to pulp and to bit be? options Thank production costs, little lower a So if the on you average more the you Just is? production line would would for to give logistic on the Port? how could that would comment the expected if for number on range if this your you. could mill also, to you much just a And production elaborate the comment bit if the maybe disclose compare how much Santos perhaps than like how or cost current the of cost ask the the add the that pulp project, And keeping can the a you from

I’ll Thank your you, Carlos. take first question.

But strategic of Our technology even projection current that applied current per average in And what equipment that mentioned also a better don’t mill average cost production the startup of the of one, number reason quarters the the of in with view that the disclose BRLXXX combination we the over a two use we the very can – you far deals. for always on the been the can of of the Suzano, production. X as new ton. the tell beginning, mill, after which that This this we new among ramp-up, of is And the our cash as And the line and last the Lagova. is a as from different is scale of unit of terms basis. behind radius, technology than I in point strategic has Walter cost lower mill-by-mill dispersion better new time. low will is, phase reasons, go have mill, of new be and after around cost-producing this lowest cost gets

Hey, This your Good is Carlos. for morning. question. Carlos speaking. Thanks

now. whole different it’s concluded. we which solution. It’s are current our And further cannot cannot comments about cost for already But information a we defined studied have disclose can On options any alternatives, the We have of discussions we say due done, we any system, now. make [indiscernible], part that and being. for also, reason, same for the to the being the the time

that. understand can you hope I So

to Santos are it’s Port. to we that operate mention going important Carlos, very at

Santos to is at very But logistic have is the right Grosso This the point are two mention time. the we There two to are have about then side is be know, the That this from port to the this alternatives of I state terminals operate yet. side, cost in – terminals we is that costs Port. volumes not extremely level over both [indiscernible] that which have today Project. as at Tres the at not of is that combining and and decide the But assure on sites different we reason do Sul do to same as move can the to of do the the of competitive. rail with are of from disclosure may point rail from we going terminals you this We alternatives, these DX-XX to time. want going situation. Carlos you to Mato may you important We there. this going left are Lagoas of And that know,

And pulp your Alright. if was how and squeeze much responses, I Thank appreciate first you. a the may last question, quarter? the the prior production I in production,

disclosing. Go not are We ahead, Marcelo.

disclose No, production we have on. to now anymore not from decided levels the

will not do. and number on going but disclose to combined companies, other a disclose we the the our see with to also continuing our to official individually be will you’re competitors most the basis statistics associations, of We as

Thank Alright. you

comes Caio from next Credit Suisse. question Our Ribeiro,

the Thank everyone. for opportunity. Yes, morning you good

next same discussions But higher cash cost in in cases, wood long-term the competitive curve projects much be the industry. seems very coming in chips new first it depend that projects there cost. my naturally in sustainable generate projects that question should are which, are hardwood time, pulp. prices of for perspective. online cost And It would at So online is they imported cash few could to lot in the would the seems a the tend of years China, that on from are many changes that on a come the and that

sustainable what that right? throughout in then a see for trending hardware cash you that, itself? that will or to And you approved it’s but goals that your project if of the that the little to Project further know I that start of achieve the long-term for talk a pulp ramping it lower. secondly, a I even this the XXXX. prices ahead, looking help project of how light whether up you lower bit ask I could wanted Or cost wanted And a you contemplated per could level be just cost XXXX cash see that ton. $XXX believe could of in pulp be in to cash then cash Cerrado So guidance still could cost contribute China, to reaching costs, on year, is you about not? now And year in was how

long-term Leonardo. Caio, first foresee is regarding this hard It’s will prices your question that. to take I for pulp.

prices are demand supply and by obviously, determined As fundamentals.

difficult and even position In demand, mentioned gaps But pulp our the is Suzano bleached our to fossil-to-fiber able have current believe opportunities forecasted. in to to of future demand. to enables fill to will over new as our Being with we create demand what additions again, additional which very growth, which so in fiber-to-fiber in us all in the We alternatives, Day, or needed in production market that. such hardwood, you chemical for terms other and there sense. also and still terms that of you shared fulfill guys that be an view, all view the be will this the in

indeed part And related your the are region. are Hubei that to lot those how about being all we be is China also Chinese have projects for believe Regarding been come indeed, a China. capacity the forward. will of projects to the of and projects, going hard resource announced the that paper in will Guangxi question limited we And to incentives have that some region. the that the of on production, given board, understand believe indeed woodchip these projects, or big we monitoring understand we a been as But the very or maybe moving part pulp forward of a in

have we So monitoring. been

all in of from also as challenge been be for to chips true wood it order announcements world to and reality. China regions see a overcome huge the part of biggest to become other have a these monitoring trade to We

total times quarter, year. and X% probably as X%, that disbursement range around Okay. mentioned costs end coming XXXX, this your XXXX. our fuel cost was wood In freight. the the in cash by cash fossil complete in is with higher meetings, Marcelo in see second the relation affected In to production rising not number external and or consequently, of we for quarters other second negative the stable cost from will remaining relation throughout the the the see of Such then question, in number. on of Then guidance months, mainly cost and our price update year, following of projects pressure the our how

Thank very you understood. Okay, much.

next Our comes JPMorgan. from Marcio question Farid,

on Thank the a follow-up you. Good question morning everyone. just quick itself. I project have

surprises think the were couple of a I there last during night announcement.

announcement The guess, timing concerns to first the the announcement, in one I are obviously come this expecting of was the later year.

CapEx being the the have the also a the to than type So, of terms, higher basically to terms just cash announcement second still this of right Tres is but short-term the understand Fibrias, couple are mean that It point time quarter. about conditions difficulties why for ago. visibility of around supply XX% investing, to I and flow you know And trying related is has this in is with been years U.S. last was long-term, the dollar unfortunately, announced. Lagoas us. XX% in that better make now? COVID In challenges long confident generation, you I but and the considering this to how – the

seems but I inflation? be little related higher that higher. trying to logistics it’s costs, what this inflation, understand So is bit main driver of just that equivalent to etcetera, was but expecting to be understand the sounds is I included. a logistics it business to

to well. it more So we like CapEx can come expect as sounds

on Or pulp that are everyone. wanted see high a And you markets, some but but to mentioned question tightness books order seeing well, are you saying a the if is not I that still are you you If that Can I you’re out about comment the Obviously, relatively [indiscernible] no understand there. mean now. still you good, but you bit be a you’re disclosing I – anymore, little to know are guess just on saying would market? tight still production still? Thanks to still you that no? as can Leo, prices, getting lastly, guys great? are market clients I know everybody Leo maybe

Thanks very the for question. much, Marcio

project. about to answer like First, the I would timing of the

this And we well our generation sanitary have on of only position disbursement that If position, CapEx minor will are of in to position, going a I have financial have early has we we is better representing cash with the project, the positioned are have very year, are in very next a our robust. to quarters, Meaning limited. CapEx year, deep year, but the analysis have going of very well ton, cash amount. year, to on to realized in we to pulp different been Then we the per going that the to pulp very a to comfortable the generation And position very a bring this with the that going a believe you positive strong are total planning as this X% Related mentioned, be for we this be that are to see condition not going as we are next cash year. much due the to prices position. And the company. you higher surface since two issues. with end disbursements you higher just forecast COVID, are effect coming

a was brownfield, Lagoas not Tres the a that greenfield. First

and prices all-time it. FX. our is are Of point the the difference have combined we course, iron ore that we with we steel infrastructure to project, very that And on that. consider necessary All certain the do is on second there on high high

BRLX,XXX quarters, better go have believe than average this a America. fence that benefit price the ton in of we are projects we steel the It’s time. on basically lower point bit believe not considering the ore, that that in per this be If that, little considered we will to ton other per iron We South to roughly you some coming could that CapEx of inside on the have at project.

Should I now? right jump

Thanks, Walter. clear. Thant’s

question. to that, answer me for let give Marcio, thank two step you In order your backs.

us. have in since the logistics the seeing increasing XXXX our record then. to call Carlos end say we last that And mentioned challenges ever First, have we been of it’s reached low all with important has of stocks in in as

very brings to that priorities. So clear us two

we exception. is price is increases And no the The announced as have made this implement price or that I have There first done. all mentioned public. being priority to before, is

on The all have well is interruptions. focusing which chain rely on our will obviously the how supply And sure to to really make no second us, customers, challenge, we us. priority we that there service be with are on depend

So to devoted markets no to make we current do for in supply how interruptions better or into base not being, really or customers, are service our spot to the time in customer be we sure not sold chain and that speak. tonnages there existing are which our as Suzano’s are with we have in additional customers,

is Walter the a and and good quarter. on It Thanks very luck lot, Leo, clear.

you. Thank

next comes question from Our Jonathan Brandt, HSBC.

everyone. morning Good Hi.

significant follow-up market It that the still like you’re that Leo. you’ve of last of is the to seen we’ve Just year. tight, hikes in first your on really all question, seems hikes. implemented saying the half and price price And

there May Or weren’t price this before? hikes. something why based wondering simply comments there because it it is for Is the market not it on pushing I’m for me is as Is that you guess that issue, to was seem I potentially, hikes? further as tight chain there would your price is changed? room So supply has

up. more and CapEx prices months we’ve position some So in summer leverage then weaken I’m quickly question that X bit any go Northern has is comfortable even change in certainly, the months just with pretty And with into past a guess, what concern the what and you’re pretty pulp the if or longer wondering I Obviously, of a Hemisphere. is prices But can the coming there Marcelo. now become volatile. that’s is And for as changed? seen second my have over that we maybe

any CapEx this prices won’t the have I I scenario comfortable lock potentially just you up the given know back saying net if have And X.Xx starting today’s reach in happens year you now to X.Xx go pretty you’re pulp the given trying not exchanges? then next prices hedge pulp to that prices because the you that that, $XXX some run to hedge, cycle, it’s in the to a debt? of you scenario have consideration still you reach or Asian perfect Thank project? wouldn’t But comfortable Are related but you. in analysis? know you of So to $XXX? you’re net What pulp trying debt. sort

other from because it’s could tend regions we on new question But strategy Jonathan. among the do hard – is I Leo. I related behind the there to increase price. to cycles. these foresee can regions. the first rationale is the are weeks it. related are say what markets, in it. should there different or that your that This China where levels we see very that very, prices continue other still therefore, regions Hey, in into to in other coming markets. next balance prices lag in are And in answer give not levels behind compare Obviously, in and now several will prices Historically, the new play, coming to we is with prices disclosure we to months variables when believe are they that which commercial And lead past a our what world, be or

might happened have the mentioned in at new XXXX a lot was after being productions we on this for in disclosed side, what just over this originally reality, have before, maintenance And maintenance know And see all maintenance we and entering with hemisphere. are the northern what XXXX. of we be period. downtimes season been the least I for lost tracking, supply as that a First, the we downtime

different is a in which demand economic as which can the the in there result side, well. global completely recovery, with growing years previous seasonality, than all optimism is On a

is So of equation the the uncertain second for still half the year.

the for and are closely say tracking that’s I We now. all fundamentals can

second your question. Marcelo is about this John, speaking

have we different scenarios. run course, Of

using We years. coming scenarios have prices for run $XXX around the

of the be, we CapEx we course, an we cycles. are of but size, prices this decision a course, knowing should that types all exposed not Of this believe indication to where scenarios. run of of what is In

they within the an around the of idea, give be when according cash our to When prices that have an for would of year, expected but we we may year, we coming is a behavior, price below long flows. probability asset that last our the for year is very time. in the We just prices And example not a was believe low that we lasting for long more have believe of of should scenarios, it projecting run years, about that those longer scenarios, $XXX of period for of policy. kind that don’t instance. course, of financial than of but And you we X%. could be talk do still prices period below stress prices happen, for time, a occurrence last to for past limits This $XXX

is mainly point is first. the in to the it’s pulp is that Chinese But market available. that nearby in instrument terms a because maturities we perfect hedge, are not In no so hedge, the market not at but of not hedging, there liquidity much of considering because this concentrated because it’s softwood a contract,

long-term, be this market, which would of case still experience in and to to feel don’t liquidate not not so softwood. the having, ability having no need we operating a physically this operating used second, nature that comfortable is that in case, produce in in far because to it don’t in hedge we good So instrument and be markets in because the

So we are not pulp time considering hedging being. for the

Great. very much. you Thank Alright. both

question Hernán next MetLife. Kisluk, comes from Our

I kind you had Cerrado for the agencies. finance project? my on of if Is what Project to your have second regarding conversations and I you the have would with the them This rating That where two thank first know the to and credit questions. linked to on scenario is you question have morning more questions. one would impact be any take And like question. Good be? taking scenario and the ratings would is to there could this first analysis. two downside my scenario debt or also already

Thank you for your questions.

The yes. the answer is – first

us, don’t And We they coming this the from action have rating it announcement They will time. with and the any of this of and been because prices long we discussing all we for agencies react the have foresee a ratings project the this to the but for discussed that, of to everything. and they will with seems CapEx and have – agencies. for scenarios course, with market period rating

for anybody. this not So is surprise a

In in need on we don’t case we we and debt, base cost the possibility would terms terms of to of scenario, and prove prepay new situation debt new pieces maturity instruments, which take in be our debt. any to that. But if – they in other efficient of are analyzing of doing project-related we

our but we into enhance any market debt. further continue need we to to So of don’t additional take profile to the new look opportunities debt, will

you very Okay. Thank much.

comes Rafael Santander. question next from Our Barcellos,

the to morning. one going Thanks now that question creditors on investment? if have long-term production for cost about good the and even just you I this announced In dissolving any you for thoughts region like us Hey, benefit Could your will to taking footprint related to older My integrate mean my I higher second project. strategy. a new sense mills? end, or would your understand of would your in about to And mill, is the first tell you forward? your make convert it low-cost question. question pulp tax is my

is for question. available. will we the the that all Ribas have related give treatment the tax large incentives Rafael, that first Grosso nothing we large But any usual to thank for public the the we Mato the don’t states negotiated so state other have city with of of to and be question and it just about This tax of special. your things. usual On benefit, and benefit investments, and tax get credits do It’s you information, monetization cities Sul the investments.

that. going I’m question, very you second the On thank take to much. Rafael,

Day we Our with have we And areas for value markets is as future. addressing avenues that vision different can critical future is different that fiber X during we where we the create short for Suzano for the presented believe stakeholders. the the all

that pursue analysis mill have of where our that We this assure the to conversion our ready I enter announce of And doing. in strategy this or any and any kind alternative we not are future. pulp of alternatives, markets to can We part you we It’s of important our of consider will application. to that. several can we you or the very is different any on mention of our including to innovability different lignin. for bio-strategy been applications But that other to is

Okay. Thank you.

no to proceed. would Walter for Walter, the there I considerations. As turn final you are like questions, Please, floor more Mr. over may Schalka to Mr.

this very you, We ensure much best with session. is us going of on today. very the to announcement But more preparing you doing we Thank our It’s for we great the with generation. for pleased are are be in to that that than the and joining EBITDA year that, a and terms pleasure of be history the this year company we future. are cash

have We major a the to all stakeholders. ambition impact

are only, we not about but about shareholders, are our talking our communities. suppliers, the We talking our customers,

sharing have all and Our clear creating would a with like very team of stakeholders. value to vision

goal June biodiversity. future potential safe and next have the equation like us Thank more much project invite very next are ESG allow that side years. I’d sequestration, first this It’s hand, major when to on session. believe going going our and the on future Suzano coming company of well. to for we other to first our the all to have announce prepare improving you allow the ambition performance On the in the XX, is we next but the held the It’s impact the And to to you and last to and impact very to that. this many all been create you believe end overview arena going and be years. even for I to in like to I’d us more renewable years, will stakeholders even hope carbon safe. on session our want we a share to to ESG energy, call. even Thank of to in next be all to our we our much. allow more that the stays of for for and us invite to the stay the environmental coming everyone going value, has be call We have bio-strategy

participation, first call Suzano conference you nice is finished. day. a Thank you. quarter for and have results Thank your