Suzano has announced its results for the fourth quarter (4Q19) and fiscal year 2019, a year marked by the merger that brought together two of the world’s largest pulp and paper companies. The quarterly pulp sales record and the greater impact of synergies captured led to an Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of R$2.5 billion and operational cash flow of R$1.5 billion between October and December. The yearly results were R$10.7 billion and R$7.1 billion, respectively.
Pulp sales in the 4Q19 reached a record 2.9 million tons, up 15% from the third quarter of 2019 (3Q19) and 40% from the fourth quarter of 2018 (4Q18).
"The record sales combined with the pace of production during the period resulted in an inventory reduction of approximately 650,000 tons at the end of the quarter. A number that is even more significant than what was registered in the third quarter, of 450,000 tons," said Walter Schalka, CEO of Suzano.
With a total reduction of 1.1 million tons in the second half of 2019, Suzano’s inventories ended the year lower than at the end of 2018. "Such performance proves the effectiveness of our commercial strategy and the company’s capacity to significantly reduce its inventories despite an adverse market scenario," added Schalka.
Apart from the higher sales volume, the quarterly and annual results also reflect the gains obtained from the capture of synergies resulting from the merger. Operational synergies captured in 2019 totaled R$763 million. Excluding the negative impact of lower production in the year on the results, the number came to R$311 million.
In view of its ability to deliver significantly better results than initially estimated, Suzano has raised its forecast for operational synergies from between R$800 million to R$900 million to R$1.1 billion to R$1.2 billion.
Cash cost of pulp production excluding the impact of scheduled downtimes stood at R$631 per ton in the 4Q19, which represents further decline from the previous quarter (-4%), demonstrating the gains obtained from synergies. Another highlight of the period was higher paper sales volume, totaling 369,000 tons, up 18% from the 3Q19.
In the year, Suzano sold 9.4 million tons of pulp and 1.3 million tons of paper, resulting in a total of 10.7 million tons of products sold, with accrued net revenue of R$26 billion. Net financial result was an expense of R$2.8 billion.