SUZ · Suzano S.A.

Suzano's 1Q26 earnings release highlights a resilient business model amid macroeconomic headwinds. Adjusted EBITDA of R$4.6 billion declined 18% sequentially from R$5.6 billion in 4Q25, primarily due to lower pulp sales volumes (315 kt vs 404 kt) and a stronger Brazilian real (average FX R$5.26 vs R$5.40). Pulp cash cost ex-downtimes increased to R$802/ton from R$778/ton in 4Q25, driven by maintenance downtime and higher wood input costs, though partially offset by lower energy and fixed costs. The pulp business maintained a stable EBITDA margin of 50%, supported by higher average net prices ($562/ton vs $538/ton in 4Q25). Paper & packaging operations saw a slight margin decline to 19% from 22% in 4Q25, impacted by lower volumes and export price headwinds, though Brazilian operations benefited from cost improvements. Net debt rose to US$6.1 billion from US$5.0 billion in 1Q25, driven by dividends, capex, and bond interest payments, pushing leverage to 3.3x in USD (vs 3.0x in 1Q25). Management highlighted a conservative financial policy with commodity hedging covering 86% of 2026 hedgeable exposure, mitigating oil-related cost pressures. The joint venture with K-C is on track to close in 3Q26. Overall, the results reflect solid operational performance offset by currency and volume headwinds, with a focus on strengthening the balance sheet.