Suzano S.A.(US:SUZ)2024-05-09 21:09Financial Performance - Net sales for the three-month period ended March 31, 2024, were R$9,458,602, a decrease of 16.1% compared to R$11,276,383 in the same period of 2023[7]. - Gross profit for the same period was R$3,758,732, down 29.1% from R$5,307,709 year-over-year[7]. - The company reported a net income of R$220,032 for Q1 2024, a significant decline from R$5,242,793 in Q1 2023[7]. - Earnings per share decreased to R$0.16755 in Q1 2024 from R$3.96896 in Q1 2023[7]. - Cash generated from operations for the three-month period was R$4,253,410 thousand, down from R$5,535,217 thousand year-over-year[14]. - Total comprehensive income for the period included a net income of R$220,032 thousand and other comprehensive income of R$2,220 thousand[14]. - Net income for the period ended March 31, 2024, was R$220,032 thousand, a significant decrease from R$5,242,793 thousand in the same period of 2023[14]. Assets and Liabilities - Total current assets decreased to R$35,871,806 as of March 31, 2024, from R$38,569,072 at the end of 2023, reflecting a decline of 7.1%[2]. - Total liabilities slightly decreased to R$98,674,892 as of March 31, 2024, compared to R$98,782,725 at the end of 2023[5]. - The company’s cash and cash equivalents decreased to R$4,203,126 from R$8,345,871, a decline of 49.7%[2]. - Inventories increased to R$6,521,769 as of March 31, 2024, up 9.7% from R$5,946,948 at the end of 2023[2]. - The company’s total equity decreased to R$44,724,599 from R$44,810,300, a decline of 0.2%[5]. - Trade accounts receivable decreased from R$6,848,454 to R$6,634,735, a decline of about 3.1%[44]. - Loans, financing, and debentures increased from R$77,172,692 to R$78,949,641, an increase of approximately 2.3%[44]. Cash Flow and Investments - The company reported a decrease in cash and cash equivalents of R$4,142,745 thousand, ending the period with R$4,203,126 thousand[14]. - Additions to property, plant, and equipment amounted to R$2,556,172 thousand, compared to R$2,449,752 thousand in the prior year[14]. - The company repurchased shares worth R$309,952 thousand during the period, compared to R$87,243 thousand in the previous year[14]. - The company raised US$780,000 (equivalent to R$3,897,036) through an export prepayment on February 15, 2024, with a floating rate based on SOFR + 1.65% p.a., maturing in February 2029[156]. - A Rural Credit Note of R$200,000 was raised on March 28, 2024, with a post-fixed interest rate of 100% of the CDI, maturing in March 2025[158]. Risk Management - The company has not identified any short-term or long-term risks of material shortages due to the ongoing geopolitical conflicts, although there has been increased volatility in commodity and energy prices[34]. - The company continuously monitors the impacts of the Russia-Ukraine war and Middle East conflict on its operations and market conditions[26][28]. - The company actively manages interest rate risks, with a focus on financial instruments to mitigate negative cash flow impacts from fluctuations in interest rates[63]. - The company utilizes Non-Deliverable Forward contracts to protect cash flow against the depreciation of the Brazilian Real, particularly for the Cerrado project[82]. Shareholder Information - The company reported a closing balance of expected credit losses at R$80,482 thousand as of March 31, 2024, down from R$95,053 thousand on December 31, 2023[105]. - The number of shares under the long-term compensation plans increased to 9,964,364 as of March 31, 2024, from 9,728,425 as of December 31, 2023[186]. - The company canceled 37,145,969 shares at an average cost of R$40.84, resulting in a total cancellation value of R$1,517,224[197]. - The weighted average number of outstanding shares decreased from 1,319,583 thousand in Q1 2023 to 1,285,502 thousand in Q1 2024, a reduction of approximately 2.6%[199]. Tax and Regulatory Compliance - The effective rate of income and social contribution tax expenses for the first quarter of 2024 was 145.10%, a notable increase from 22.63% in the same quarter of 2023[127]. - The company has tax incentives for partial reduction of income tax from operations in specific regions, which are expected to positively impact future profitability[129]. - Suzano is monitoring the implementation of OECD Pillar Two model rules, which may affect its operations in European jurisdictions starting in 2024[131].