Suzano (SUZ) 29 Oct 212021 Q3 Earnings call transcript

Company Profile

Participants

Walter Schalka	CEO
Marcelo Bacci	Financial and IR Executive Officer
Fabio Almeida	Paper and Packaging Executive Officer
Leonardo Grimaldi	Pulp Commercial Executive Officer
Aires Galhardo	Pulp Operation Executive Officer
Cristina Gil White	Chief Sustainability Officer
George Staphos	Bank of America
Leonardo Correa	Bank BTG Pactual
Daniel Sasson	Itau Corretora
Jonathan Brandt	HSBC
Marcio Farid	Goldman Sachs

Call transcript

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Operator

Ladies and gentlemen, thank you for holding and welcome to Suzano’s Conference Call to discuss the results for the Third Quarter of 2021. We would like to inform you that all participants will be in a listen-only mode during the presentation that will be addressed by the CEO, Mr. Walter Schalka and other Executive Officers. After the company’s remarks are completed there will be a question-and-answer session and 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 depends 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

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

Walter Schalka

to Cristina conference to pleasure have Sustainability afternoon start the of everyone. today. you. good historical and call and with officers you the Suzano. Suzano. our great of company you, here Today that quarter have, Gil to would a event I morning an several have to and at of of we results new we Good Suzano, we participate Officer just introduce I telling this to Ms. us third joined is to Welcome would the with today, us has the moment for would on Chief It’s like be day like

you we shared be half next our announce We invited our are the billion are with of billion are there week. an the same announcing will very pulp, a a just of information of EBITDA X special ever and X.XX the as yesterday that some tons Board because on of important of to in announcing details X, provided We investment to it’s AIs that that is of event the XXXX. defense to history the are today by will project will and commissioning new addition All happen you $X.X with EBITDA us join quarter November day going to on at going be record be projects EBITDA, the Cerrado of this on a to in approved information project November you was best we have well we Directors. In the the that of on project. time XX.X additional second million

to We are of to the very results pleased the you third today announce quarter.

the paper. to EBITDA extremely pulp addition record good we and on volumes In had

on side inventory normal levels. Our pulp below is the the levels

We a of shipping is problems despite our logistics volumes. all are good good facing. way operating the very had on that very the We world

that very price of good We EBITDA. good price and and record our a combination pricing have situation volumes the we realization realization creates of have this

we flow fast the that, had quarter this consequence and at addition on free In of deleverage pace. we very cash and very a good

down now And Our from X.X $XX.X billion net over debt came on $XX.X is EBITDA debt net right terms. dollar quarter. in billion times to our this

Our liquidity, it’s extremely good.

billion $X.X that in million. to had sequestration the the to we of last you now this going to our right information the that week announced of XXXX related call and related with with world. of share action and XXXX targets is from is our DSG, to standby to with addition cash additional line dissipation And $XXX in are have We hand we we Christine and carbon

advocate and a next it’s of direction going this on are of all and X the the situation work. very We decarbonization the us, during are part COPXX. our that we together the going people to procrastinate position COPXX This of be work We billion of week is cannot anymore important must. to

is paper over going He I’m to floor our the Fabio. talk Now going is to about Fabio hand division. to yours.

Fabio Almeida

morning everyone. good and Walter Thanks

results third and business package paper quarter look of unit at the for XXXX. Let’s the

same the vaccination. for Demand according write last the same advance is August trend has marked period XX% the economies the sector papers period, historical when showing Demand both year paperboard Britain persisted. that recovering to During improved the levels. to pre-pandemic has of conditions Brazil for significantly in until in compared grown growth grown the COVID-XX quarter, have with Aeo major Latin to now XX% of for

On supply between markets free basis and Demand still the to which supply side, paper in on paper global XXXX chains has to a papers constraints levels. have trade. flows regions metro products reduced strength has inter-regional the XXXX been compared for grown market adapt below forced to wood when the year-over-year in yet

this quarter. has unit on performance package the Now business focus paper into strong light operational for delivered the

even a basis severe strong continued a to export that due also I sales papers. the pre-pandemic better marked were our were total seasonality to XX% fundamentals. Domestic grew sales domestic demand and with compared quarter and the XX% our XXXX of levels. reinforces to highlight represented to when tons, quarter-over-quarter in X% Our our on like an growth to On sales even X% sales in the the quarter-over-quarter QX, packaging international XX% demonstrating higher volumes compared of increase totaling second XXXX XXX,XXX when headwinds solid would logistics. compared higher basis in on quarter for improvement volume, persistent

Our higher our average and net quarter was quarter-over-quarter. QX, X% during XX% price than XXXX in higher the price

November has North product markets implementation stocks the At for same reserved. XX. of and increases previously time, we ton October exports cap lines increases, X% and all XX.X% market Suzano round the paperboard price per successfully price also all all for period the American Brazilian During and falling exports $XX of as the have announced for of for completed for XX. announced for Latin X% to XX% as our

quarter-over-quarter XX% EBITDA and rises, new our of and quarter, a management result the revenue strong stability, of year-over-year. a As XXX a XX% and increase in million operation record has reached volumes a increase

marking Our also new EBITDA per ton time margin high. X,XXX a reached Reals

a logistics we inflation challenge resided of see in alternatives managing the exogenous the ahead to pressure Looking seasonality our successfully short continue find better bottlenecks. in term, to on and QX international

will we profile. be working digitalization by by innovation investments On that with already boosting and well trends accelerate demand benefiting go our pandemic, technology on keep from recover the marked long as pipeline keep as market our to seen term, will on we as the strategy boost to can

turn will who over presenting I’ll yours results. business be The to is top floor our Leo, Leo. Now

Leonardo Grimaldi

move Yes, presentation. positive also I supported morning XXXX and pulp quarter the page thanks, all increasing of strong logistic good The for third quite you to our five to sales results invite prices. were business by by supported of all volumes, challenges Fabio. our And everyone. despite will

As below you in that like can are note emphasize quarter on the million quarter would record a tons sales the operational third I top graph, totaled inventories to levels. X.X our well optimum almost marking since merger. performance

Europe, challenge region. highlight monthly that demand quite quarter. as paperboard this rates. In AeoPulp producers to overcome guarantee our expectations high published running the We during maximizing the were has to recovery teams our stocks the average able quarter customers placing our consequently Pulp region consumption remain to a grades would strategic across rebounded levels exceeded and in North by board statistics, has customer than since during the and per pulp also in in like paper and paper European In a America. in who back the pulp China our invoicing saturates despite close below order XXXX chain historic paper and ports stock recovered Now in also intake to the as supply expected slower at and successfully six our normal level to all base UM to constraints XX% service flattish China, from quarter. are significant as high our upgrading

increased $XXX in for due ton each markets major prices see different markets export average regions as you directions can to per to having has specific in Our behaved turn, fundamentals.

Our with and XQ prices our announced price in the aligned compared Americas levels. European increased in and to a

to correct to started have since prices China in adjust While July.

Our average by strong influenced in quarter. price volume sales during was the a Asia

was all performance, BRL was favored terms levels billion local XX% effects the in of in prices even EBITDA our tight. especially Looking pulp the quarter the to high contributing third time X.X with higher also than in rise when XX the currency in at the quarter EBITDA high a price margin our by market

logistics the just well fundamentals looking is to as tissue, stock be we continue in channel the America quickly stocking expect segments several improve paper consumption quarter The paper all operating like demand paper to the some for and healthy factors end as dynamics paper to production as after going more energy see we forward. a see the the recent demand stronger a the pricing that downstream point seasonality consequently tight in stocks Now we by In and supported harder contribute of and book paper where rates demand improving by Europe visibility curtailments is getting North recognize forward, implemented packaging Price than risks low weeks away environment the including intent high XX and lower seen WXX, more time increases is are prepared replenishment. home becoming are we we producers same segments. intermediary side, China, to for margins. crisis. as triggered also will macroeconomic also the the In supply to that might for In market positive gallon challenged. side out all few upcoming would we players November even from being across of impose now. In a Nevertheless, improving capacities. global grades, paper higher shopping expected announced and from

cash producers above chemical not that China, might also should like information can invite I said, downtimes operating so see he We but cost worldwide. average in us energy only rates give would our also and that unexpected With to more logistic costs on increasing performance. impact Aires as

Aires Galhardo

everyone. morning Good Leo. you Thank

six. We are in number this slide

affected XX mainly by quarter again by digit price exogenous impacting performance issue with both increase third cost Dioxide Chlorine inputs was recent the input performance quarter-over-quarter pressure a The [Indiscernible] quarter-over-quarter after wood packaging costs commodity and in affecting in low and year-over-year our line wires. discussion. and in resulted The costs followed rising cash on

virtually took third you is factors during see, the that in fixed figure price Other to the can contribute quarter. for cost impact that place negatively scheduled higher commodity on to to costs of the in all due turn times the pressure. more maintenance the routine cash intensive related As quarter accounted

representing performance, also year-over-year of XX% on a costs total price production took out toll increase. the Looking to commodities cash

COVID-XX directly the in previously costs Here can pandemic be recorded fixed of COGS. explained mainly impact the by increase record

should cost expects flat quarters over For the the remain [Indiscernible]. coming company production the about that cash ex-downtime

continue Now I Marcelo Bacci to to presentation. the pass floor the

Marcelo Bacci

Thank that step our everyone. Good process. quarter represent you this Aires. see seven, page significant we morning deleveraging terms in On of the

us $XXX performance and bring policy alone ratio quarter back limits debt $X.X this now the allow in leverage of months, for X.X to the an our new went conditions last well is within XX which exceptional in that creating our down net by a the to million cycle. and times investment Our financial billion

robust. Our position extremely is liquidity

hard We of show have to our four XX% position $X comfortable is of our debt cash point our the next the we were end current to flow billion hedge sufficient eight, our to and of all liquidity even cash. of the very FX we years, in cover last debt been taking if is our have any till don’t months, protection we the page and maturities amortization market. liquidity schedule levels presented the at the us currency that dramatically of this by XXXX. opportunities generate more On is XX portfolio. in In cash advantage able change

at XXX a to now been we especially today hedges and see is at the put and average Our that the in benefited, note a calls scenario term they have long marketplace. by XXX rate a higher that volatility we with have special interest higher

With last floor. page with our X.X new the we nine. of same for program CapEx Welcome evolving for the I year the keep Reals. to disbursed CapEx that Reals of and We X.X total XXXX Christina our with according billion colleague billion investments to call plan has my Turning Christina. see guidance been that to quarter

Cristina Gil White

Thank to here be Marcela. at great pleasure It’s you, a Suzano.

become we Conference than of implementation biggest a This Climate nations climate better included to which is together to measures biodiversity change fully The financing of world, Walter the of climate combat pioneers. [Walt] commitment that of former for based wish week. priority. carbon world we generation be mutual and solutions. from regulated agreement is a the imperative and tackling we change measures expect through if We our As that with our and now. atmosphere we must indeed forward reinforce the and to COPXX be we true gather leave on Among our through must embrace a the must challenges achieved one concrete market the an move is Change can It collectively emit. next opportunity believe from in preserve Agreement. leaders mentioned, coordinated Suzano’s framework global the to climate Paris carbon a is dioxide emergency. nature Aware that aligned capturing addressing more of potential convinced starts

term long the As its advanced urgency Suzano has we goal. understand therefore,

the from atmosphere of We will years million carbon five remove earlier. tons XX dioxide

as its We degraded will encouraging as the we combination A committed year Very and our to supported tackle its task target joining protocol chain. will and join peers by Walter as carbon target where designated are more emissions be, importantly, executed reducing new forest aligned with use. can initiative is that cover, instead restored. to disaster, This discussing be if own an deliver Avoiding reporting we company you. this gas we one Suzano that to company operations us. goal back such remains guidance and forces across of be our be the race In we not goal land a emissions expanded by a business we in in will and land focus for on of or efficient the This XXXX. methodologies however, engaged all business join or alone and by fully can a Hence, will gas in climate X.X based the degree original the that conservation science in it’s from XXXX new increase parallel, win. community of maintain renewables industry greenhouse is by our areas well supply on ambition. fact can greenhouse itself.

Walter Schalka

we good is on you Thank you, we you extremely the future. Christina. pleased our in am results. regeneration. together sharing operational that be of It’s here a society a work need great This near to opportunity work direction to that I very issue critical with for that with are and

you. to records showing are We

have the addition we from to are to other been the preparing company that, we mitigate for hand, cost, that are commodity inflation business. working our But seeing in the cash the future. In we

robust very balance a sheet. have We

of very very term debt. debt, are cost We long low

our We announcing the be that are today project. are would cycle to well prepared growth you for that we next of Cerrado

than be team on our will target climate company this mitigate stream. pleased how to believe work environmental it’s engineering work on we robust are the to and our to that, responsibility for see prepared And We for very is this and our change. more coming to project new that issue the the that generation

that the We with mission, come. we years words believe our generation area not critical only going this ESG and few are project we we is presentation. this issue of on is to appendix a this that committed of how to are very various need to a This and the our discuss is address in

November session. we are Cerrado Since are Q&A next Now for deliver invited, week. additional you going we project to are the going X information only on

Operator

Instructions] question. Now [Operator the [Indiscernible] for floor make open like would is to question. a

Unidentified Analyst

results Hi, two the good questions on have morning. for Congratulations opportunity. I you my on the side. and thank

still And your in hands like you’re throughout please question in hear supply chain how you demand market inventories you and dynamics of could Europe and the second pulp comment on are papermakers’ thinking the XXXX. how would First, on I and right now. especially on about China dynamics, pulp perception to

great uncertainty still. lot a are there These view. you. But know to questions. of are it your my I Thank course, hear Of would be

Leonardo Grimaldi

you questions. addressed as low one When actually European first your mentioned the below averages. Thank very ranging they strong. in are in sense ports, a is European for see the the Europe presentation, in inventories, Leonardo. my is I we XX% stocks hardwood I historic This demand We that in

we time, are support high the to our customers operating Our when show higher us extremely say, same challenging see rates. At operating let’s very, stocks the rate. present with sources that this

constraints time. to to see what route they is globally. B. mainly European at was actually from very obviously needed, to is route divert to And this It’s are vessels we producers hard we’re running seeing what A So that actually logistics that needed below support the or

that the fundamentals. But Now Obviously and to my your from happen for the what try demand of on happen at the depend there, this supply should months market will few we XXXX. on all question fundamentals a in give terms time. since might of the what view are you or in me support let

producers We delays existing upcoming producers also logistic slower be some much and obviously, we from but with at were market not the pace. and in this, are arriving constraints at seeing a have, that delayed, projects, obviously volumes current will that only projects

In contribute think the that see of the we we fiber expected side, So demand lower have XXXX. several we which hardwood, fibers books, low close There will of are softwood fibers. still organic about much. a growth have than opportunities the we owners follow, recycled use significant will huge is these sustainable as fibers and now now and availability the and grades we’re recycled substitute to especially in opportunities alternatives of the alternatives these well we traction sorted see for higher the grades intent supply by are customers of costs top all addition terms Asia. On prices to at on that reaching their that, space also and market will also in directly fossil of for terms initiatives to they increasing by how knew substitution, very to in gap virgin regaining are our brand packaging and customers more be substitute range of especially to pricing ourselves seeing paper or chemical which papers plastics or recycled have more talked same bleach due like develop office And fibers. And interested products our fiber A we they to fibers also packaging, to in as happening seeing a of substitute so today in of projects single that lot our example. able that and day. can grades softwood the more the by every a

like there to that point that out. are points Additional two I’d to other

historic will that between grade stimulate the pulp flex gap conversions up pulp. Its solving and pulp of and way and we paper grade the between and that averages speed think above solving. paper is First capacity

paper labor, rates the and we’re cost. marginal this In producers certainly will hit pressure globe. inflation Brazil of a terms put but pressures that least in all down fundamentals This and cost we of by side. wood the the put energy certain will cost for saw and exclusively lower producers seeing and in in So lot is marginal this operating this being help industrial China, the exclusive logistics, having will market not across also last higher grade will to cost the our costs. producers not times be we XXXX than seeing on a are unexpected of costs, obviously increasing Also on

Operator

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

George Staphos

Good good for afternoon, my I questions. and on morning or taking I’ll and Thanks had the three everybody. ask them together. questions two result. congratulations

So efficiency. time for

thanks the a the of rundown Leo, new impact from maybe market? if of First for in do on the market. be into Potentially we’d supply pulp that saw gauge How slower higher the supply the the is market. terms pricing at seeing you you pace more existing price having pulp suppliers that and into

And But and Thank quarter. us you be you to then luck is On paper Christina, to great. five is remarks increases point very also could much, what to negatively the going start quickly in there, and quickly the very bit escalation hit that you years could earlier? might Suzano that’d you’re price that? give You demand? your side, [Indiscernible]? the why pricing its culture, market think if continued review us in the went and a through that details mentioned lands. You some at not are goals still paper you I with to Fabio, deficiency, remind you worried in affect good can more conservation And review how

Leonardo Grimaldi

Thanks Well, George.

other think of is growth betting the just other announced that. projects that side question. have to capacity, in to the Let all in seen we interesting and like pulp solving Most I very markets and mentioned don’t there’s the me see or strong my very increasing of we fibers projects on as and first even This in We that side, as in due kinds can are demand future a and of take fundamentals of arena action that a from previous organic terms producers of opportunity one of lot question. into the substitute especially a further to answer coming comes correlation integrating in the accelerate of either that your a the actually viscose example, for have polyester. other increasing Isabella, who into growth interest viscose cotton

see be the being, don’t we to moment for time according markets next a lot dynamics announcing correlation from this So at increase If the specific time. pricing cycle. in will of a least projects of or

to pass I Fabio. Now

Fabio Almeida

Leo. And your for question. George, thanks, Thanks,

product through increase of to price I Regarding presentation, close my Brazilian precise to of all have at XX. paperboard $XX the is price that exports announced rates this for XX.X And more we a And year. in as we North exports. all XX%, in Latin for announcements in increase to went be have the a also October announced market American valid ton per and our X% our as November this X%

prices question we in your terms. the impact seen to markets have below Brazil in of the of demand paper dollar international As regarding the price on operating paper,

is So from prices of to level. also price visit levels for is back inflation recover there prices the see a also the materials that also trend international and we which can logistics, a gap the and lots price and we different international markets pressure paper that raw see to pushing trend come paper

also that order So Brazilian inflation, and in the in to continue the will we market. forward paper logistics, in come adjustments international for market up prices believe move with to

Operator

comes question BTG Leonardo Pactual. next Our from Correa from

Walter Schalka

Sorry, we third the question. floor Christina the didn’t answer is yours.

Christina Gil White

Well, for George, is the question answer. and thank you it complex Walter. a you Thank

ecliptic our to plantations Cerrado expanding are project. We

of now we we’re natural or we XXX,XXX reducing and And XXX,XXX our we in cover in from going areas. from biodiversity methodology have also target operation. are refined to we’re Also XXX,XXX hectares our including emissions our carbon or own more a preservation calculations we removal the include hectare less. and So nature

So that will also be included.

and There million in a of a year XX per XXXX. tons will we around removal more be of dioxide also thinking or reduction million less. carbon X had We’re variations year

we will confident goal. pretty achieve the Thank we’re you. So

Operator

from Bank Pactual. comes Correa next question from Our BTG Leonardo

Leonardo Correa

Yes.

So my my two on outlook is the first to still going questions question I’m keep outlook. market market guys. on the

right, on months the prices when above coming in emerging for the in reselling first price today, now many China. first you Fridays, that’s numbers we received from [Indiscernible]. The interesting is time the the fixed see and that So weekly trend weeks always

side? just I hear Leo we wanted levels price could So you mean, this to make bit important what above of think that would all outlook. or think the signals Do weekly my pricing the us. question still be insist And a has on this very you been of close spot hear. of on the interesting China the guys for But a on in this side, that the a bottom floor clearly now confusing price. it’s second think little I been on sorry course, I you to difference. be and, close year I to to to market

made on mistake Chinese I outlook. demand think the we a

in made the the was to the outlook in we overestimate probably demand mistake think year China. big I

the and was paper and of shifted Chinese towards is a that exactly seeing you demand narrative different Why short North mills you you so mills some what down China? so not in now prices. first the what were ground America? in and in has seeing things narrative narrative are in Why the And the weak? mean, months mean, on wanting we’re a to demand paper ago, China generated restock Europe are from And in seeing also that Chinese supply leg are margin? Thank in That I sorry I would for is outlook. weak also of there signs coming I’m demand of the any destocking. series to of that. the term Any signs recovering effects also rationing interesting that that of the there it given to Leo on guys. fact hear given fact very hear. market in is both all the concentrating the on think green stabilization? be at potential I than questions you shoots the

Leonardo Grimaldi

questions. for Well, thank you both

and the is we usually the Regarding one show the of proxy market trends that direction reselling that is agree the best one to that of going. prices

trend even now say shows China little training term. or that and in is price good fixed increases the We is well the last a a short to in that stability that levels that reason my on for prices. second we several So mills. when explain as weeks is it main paperboard due Certainly as price or there that over believe for for was production the throughout the in four grades grades restriction three view destocking in bit might the on question paper the China

stocks rates. for opportunity to as the of ready in push the also the or to recover So that’s a waiting as huge from which the possible a Shopping consume. there for have the where and as this the double November seasonality producers first And be producers season to fourth is recover are year upgrading of quarter for the especially tissue the in we quick good XX we our northern XX now gala part China is which

terms why ones bigger see see available levels. available we intake new China this and quickly pulp that That’s all from So are they book are of also in and order interest stocks prices assessing steady in we the a are push obviously resale.

the generated changed So questions, answer think after we three, weeks last the positive negative. are has four not to correlated. more that is an Demand we to situation I than of also expecting. very I the everything production positive see restrictions we during think effect were kind that us that But that your

education. curtailments. seen coming most the our some production then the the demand. the even related energy downstream happen, in generates, the in is the a due think outbreaks in usually we obviously, didn’t fact impact later still at restrictions KPI. of of are important important further And as August, then China And expected which seeing and bit printing writing demand higher little to view, to We and impact early September COVID no is end that then curtailments and this then, But I one after that the

during not this the packaging, as even or of demand for the Olympics printing, publicity we are past been are writing We that Winter impacted the seeing approaching tissue have weeks.

this as quarter seasonality prepared So able the this or to and this again, higher for see rates paper recover packaging be coming from into this producers, to intense we fourth tissue need be to producers we’re season. producers, push operating

very important on of it’s the chain market. drive that’s by whole So in I the to going think day, end that because the downstream focus the to what’s demand,

Operator

question from Corretora. Itau from next Sasson Our comes Daniel

Daniel Sasson

Good Hi, morning. everyone.

or assessments you that And markets So think that maintaining the with great. had second main COPXX. own Walter voluntary outcomes fair my very question or volumes Christina the my your do regards expectations sales have us that share tapping your because you your if and most you stoppages will be eventually question, during some Leo, developments could further to this any it’s for assume share were of could comes the What interesting you basically I first there quarter think maybe in main to and to the strong the topics maybe to during would declined inventories of be you quarter. carbon you, if

were that normalized So my and is, working were inventory already levels. saying you with below question you

and the think some historical trend to are that levels call at maybe has guys inventories point, and you you the an my learn you with questions work the will what than reversed? much to Those inventory levels, or side. normalized maybe than own on level, could Thank Leo will, two from your increase Suzano So lower or be used do congratulations you results.

Walter Schalka

that this related is important your for with COPXX. for you question thank so Daniel you question. And Thank raise

need and set precedent it’s countries of think NDC I numbers. the every what need as to be some because one in of NDC would standardization, not the specific the COPXX We are NDC standard absolute we for sectors for emissions country. areas different the the address is to on sometimes single related, not including not conditions, a

that, we targets create In targets global country to the from and have commitment expect more carbon term short both single agreement on more need addition targets. than the that need a to We on this we that, different we and that important is market. have Glasgow to more regulated anticipate countries every and that that

COPXX. single every single emission world a developed carbon trade we countries do every I the, but very market, for be Agreement, to at on developing where the If and think would than and we Paris I’m a targets of they should world you the have to more believe through have investment of expect will will term decarbonization pass We if in going the XXX and now. need we where Last you that reach during on number if dimension the now that positive. global an company Then, cap investments that fulfill have more a both Leo. the have We on new right you short not $XXX can need allowance for this, market. the or billion have and agreement, be sorry system least agreement it force we higher to more And countries. to a least, invest for decarbonization we reduce the country billion

Leonardo Grimaldi

to is Walter. Thanks our will refrain Daniel. to answering we have guidance cannot looking going if we at question. obviously, commercial will or way, inventory very in related Thanks operate from because levels. it higher much Hi, for give lower forward forward that And I or strategy. our policy your Obviously,

answer way. try in different to a me Let it

I of our therefore are and particularities according it’s quarters, very is all that are consecutive we one. and actively clear the And first This opportunities very at selling rates fundamentals, market, that supporting after number I all, now and all capturing think Suzano following and our important plan. say possible the two customers. high it’s and to to think we by

at are stock levels would levels our Second, supply across I low like chains. that global reconfirm very our to really

having in pool one the chain more side, a and difficult on We from other our than that over customers have scenario. and weight logistics and having pulp regions several supply expected bigger operating side the our

that and two team when chain, are able high you together, which is doing my together are for add and deliver has logistics the quarter, I’m presentation. volumes industrial be very which sales we we to So had and saw also before maintained, service at say as service situation those to factors the high all to we level this to our very us that is that enabling with to previous and the in are customers able be and we work very agreements, But sales, supply happy today. been

Operator

HSBC. Jonathan next comes from Our Brandt from question

Jonathan Brandt

for questions. Hi, my taking good morning. Thanks

Is the my Europe? prices demand winter share in you better possible you all First, last? that natural Obviously, the like I any And get ask of I’m very situation there’s in and a there? costs as and we forward do And disruption. wanted most my Europe? I of could so. contract. for European any pricing it’s And second next to you something relative at prices have and Europe any falling Europe about not get believe because if into or into that I is concern Obviously noticed sort China. manufacturing on I’m Europe term energy unlikely we demands. higher long and you But understanding if know freight Given there how wondering might to to energy that I any year to think question wondering, higher head you freight prices insight your gas guess have as put freight. to in more of of if high haven’t year long contracts is into incremental European relates the some there? if just the about are you then to two over much roll is or concern least you

supply timing then you about situated? expecting the Cerrado you’re Originally, talk sort expecting and there forward? And you what was behind could change? expect pressure me the well I and if forgive Walter we So what XQ know Should should share the we want just didn’t wondering statement very delayed But you’re your you to not could night anything is market equipment of I it’s fundamentals? second this to Is more you the last wait being that logistics would until in? half. there, X, great. able understand. Thanks. share get that and pulp the November sort issues obviously want saying if But be Or or be of rates the freight I’m going to given on just If project. some to lastly, decision

Leonardo Grimaldi

Leo is this Jonathan, here.

Let me first demand. European with one the start regarding

only and Northern who the containers rates. paper, high but very the Europe, is kinds strong. are European with demand together of in report order the related Our the and the running logistics to are until to November producers today very view and for not books continental are our also and grades the to Europe, December. also ways, from in European producers customers of East. lack markets Middle operating the until this in markets North recently the the This due producers America. from Europe Africa, by and also America continental by at mostly forum sold were at in were constraints, being Asian mainly some is then or and We attended around end cost a all And serviced all of the Latin they grades But reason packaging that of markets end taken fully in containers past of

hardwood to books up high chain makes and very-very markets a it the a because other pulp supply vessels hard them Europe, from supply the time of So rates or order at Europe. very reroute reroute which to challenge speed or big operating is today into into

have also since your to to kind on months supporting to supply the don’t of time we Eventually, this already. prices And strong ease Europe logistics start just change question, this response unbalanced it’s that that’s fundamentals coming can off, a to change correcting to very and believe if related change at end have because So some that challenges making today. this time. fundamental ago more hard and We creates precise, the that’s going is then when logistic my we it’s market this and that when Europe. of into in moment

Walter Schalka

is Thanks question. your Schalka for morning, Good This Jon. speaking.

term the Just break have bulk to to buddy, we both transport long contracts. of remind it abroad, use for the

by are to can transport to just being in with the is vessels to happen going We in But It freight that bunker. have a rates sort of tell pulp agreed hard coming new what’s you have Asia. or the predict we year. only definer rates. I the mostly a There built there

years. capacity be rate going hard So we to trends. vessel predict the But coming foresee the in it’s freight coming to online additional what again is

Leonardo Grimaldi

project Cerrado realize several the for the of different the second commissioning and that quarter. winners the to expect we be the postponed several approached times We is Jonathan we would we next that half After thank for us this you project. higher the question we to project the the this commodity than much related for precedent last we’ve their for supply reason other for And the is logistics, suppliers of very the going on and approve, with supply to set reasons conditions for are your delivery and the factors. the going week year. of announce

quarter of decided quality period. regarding We information on the we XXXX. the year This half the our confident the that second postpone from first important are it’s right to that market But the we very commissioning the is the reason suppliers. of to keep the

Operator

from Our question Goldman from next Marcio comes Sachs. Farid

Marcio Farid

morning, Good have you. I questions. a Thank everyone. Thanks opportunity. couple the for of

that for inflation companies segments as with first on seen across and cost different something The we’ve well. one

in terms add terms carriers terms be cost how Thank be can to a then expectations well some you. And again, of well. here if the about you’re and point allocation CapEx week. seeing can second may financing any question into next great Bacci us the as we going details inflation I to cost your next of Just are going and going reached hybrid from will into that. understand on if you capital in color But Are what to in plantation be have you if there’s how cycle of going sorry, just Maybe Bacci. like forward? looking hear more how the quarters? forestry turning seeing at think that peak? be should give potential a next we to the my wanting as understand inflation? side you and you is That Are provided a we

Walter Schalka

to this between cash costs. distance morning. quarters to the for price cost. in lower you have And, initiatives average good implementation delay Hi believe be structural any are that contribute of part our not term, not Thank But such class predict easy to in reduce mill quarters. carrying forest Marcio, as be wood. the the efficiency, cost your best additionally, we question. of third energy And That’s project commodity of and and in avenue work for coming Cerrado of the we reason medium terms coming terms to the driveway cash in XXXX. to party third will with flat with continue It’s our of been in reduction the to we

the track. that this to in And decrease think we or believe if probably peak we and commodity better coming you level price have the scenario a quarters are in of commodity on I the are the that we in something.

Leonardo Grimaldi

On coming and from fertilizers we the impact mainly forestry are service. side, a high facing

We ways other the is And is we that we opportunity look to ways in that efficiency. our right go improve We we or operate ways to to that the in now. at need So order to find at after mitigate as to situation. this of minimize look the need way reality that forest side. that have that different operating an to

in our in and order we improve term. a should to reality is maximize this in to efficiency overcome it that our situation the not trying So short that are view

Marcelo Bacci

project and idea In the cash we position with we general internally regards have now. to generated to Cerrado not right finance the will question with But your cash details into the today. go is financing, about the

We for point this take on project. financings specific to plans this have at no

Operator

the There the Schalka like are floor final proceed. no questions. more Mr. CEO for Walter company you may I would to turn consideration. the to

Walter Schalka

opportunity be during moment call. is to in. with the you we much the are third quarter And that very pleased Thank company for this here with very us the

for We are company future. preparing the the

been creation on value several different have We shareholders. of our avenues working to

been about structural area. our have working well the goods consumer vertical our and costs, are on relevance we pulp We this performing very are market, discussing on on our integration integration, our

with the carbon our for markets been addressing And and us on avenues and market be future. a different new impact. working have environmental would bio-economy near biomass of We on the competitiveness

from positive very doing. are we We what are

the expectations the We have of been market. delivering

very the the on in let’s touch. impacting impact in have And world, working Thank been society. We you keep much.

Operator

third Suzano results call conference quarter Have day. nice a is finished.

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