SÃO PAULO & NEW YORK (News release) -- Suzano, the world's largest market pulp producer, expects to finalise the construction of the Cerrado Project, its new pulp mill in the municipality of Ribas do Rio Pardo, in Mato Grosso do Sul state, by June of 2024. The Cerrado Project will produce 2.55 million tons of pulp a year, increasing Suzano's market pulp installed production capacity to 13.5 million tons a year.

The expected startup of the R$22.2 billion project has been announced alongside the results of the second quarter of 2023 (2Q23). "We have already invested R$12.4 billion in the Cerrado Project and despite more challenging global market conditions, we continue to generate cash and advance further with our strategic avenues for growth, strengthening our business model and our competitive positioning," said Walter Schalka, CEO of Suzano.

The 2Q23 results reflect lower pulp prices in the global market, a stronger domestic currency, costs still under pressure, and higher incidences of scheduled downtime at company production lines. Despite less favourable global markets, the company has posted adjusted EBITDA of R$3.9 billion and operating cash generation of R$2.2 billion. Pulp sales totaled 2.5 million tons in 2Q23, while paper sales totaled 294,000 tons. Net revenue in the period amounted to R$9.2 billion. Suzano registered net income of R$5.1 billion.

Suzano's investments totaled R$7.3 billion in the quarter, including R$2.4 billion allocated to the Cerrado Project. Despite accelerating investments, which were 66% higher than in the same period in 2022, the company's leverage, measured as the ratio of net debt to adjusted EBITDA, remained at a comfortable 2.2 times (in USD) at the end of the quarter. Net debt ended the quarter at US$11.3 billion, while liquidity totaled US$6.3 billion, and reflect the company's financial health.

The highlights of the 2Q23 include finalizing the acquisition of Kimberly-Clark's tissue assets in Brazil and the commencement of operations at Woodspin, the joint venture textile mill between Suzano and Spinnova of Finland.