SUZ · Suzano S.A.

Suzano's 1Q26 results reflect solid operational execution amid a recovering pulp market with price increases, though consolidated Adjusted EBITDA fell 6% YoY to R$4.6 billion due to BRL appreciation offsetting higher pulp volumes (+7% to 2,835 kt) and export prices (US$562/t, +1% YoY). Pulp cash costs ex-downtimes improved 7% YoY to R$802/t, supporting margins at R$1,431/t (-11% YoY), while paper EBITDA/t declined 12% YoY to R$1,385/t on lower volumes (-3%) and prices (-8%). Net revenue dropped 5% YoY to R$10.97 billion, with net income at R$4.3 billion (-32% YoY) pressured by a R$4.6 billion net financial result, likely from FX impacts given the stronger BRL. Operating cash generation held at R$2.5 billion (-4% YoY), funding sustained capex. Leverage ticked up slightly to 3.3x Net Debt/EBITDA in US$ from 3.0x YoY, with net debt at US$13.0 billion. Management highlights positive pulp demand from paper growth in China (+14.7% YoY paper production) and supply constraints, but notes seasonality, geopolitics, and logistics pressures. FX hedges with Zero Cost Collars (US$/BRL 5.97-6.90 put/call) and oil hedges (US$56.89-68.67/bbl) generated R$48 million positive cash adjustments, mitigating energy costs from Middle East tensions. ESG progress noted with MSCI upgrade to BBB.