Suzano S.A.(US:SUZ)2023-04-27 21:18Financial Performance - Net sales for the first quarter of 2023 reached R$11.28 billion, a 15.7% increase from R$9.74 billion in the same period of 2022[4]. - Gross profit improved to R$5.31 billion, up 23.1% from R$4.31 billion year-over-year[4]. - Net income for the period was R$5.24 billion, a decrease of 49.1% compared to R$10.31 billion in Q1 2022[4]. - Basic earnings per share decreased to R$3.97 from R$7.64 in the previous year, reflecting a decline of 47.9%[4]. - The company reported a net income before taxes of R$6,776,395, a decrease from R$16,324,360 in the same period last year, with an effective tax rate of 22.63% compared to 36.87% in Q1 2022[141]. Assets and Liabilities - Total assets increased to R$135.37 billion as of March 31, 2023, compared to R$133.20 billion at the end of 2022, reflecting a growth of 1.63%[1][2]. - Total current liabilities rose to R$15.31 billion, an increase of 5.7% from R$14.49 billion at the end of 2022[2]. - Total non-current liabilities decreased to R$81.76 billion, down 4.3% from R$85.54 billion at the end of 2022[2]. - The company reported a total equity of R$38.30 billion, an increase of 15.5% from R$33.17 billion at the end of 2022[2]. - Total liabilities decreased to $91,337,552 from $94,025,822, reflecting a decrease of approximately 3%[60]. Cash Flow and Investments - Cash and cash equivalents decreased significantly to R$4.76 billion from R$9.51 billion, a decline of 50.1%[1]. - Cash generated from operations for the period was $5,768,635, compared to $5,974,228 in the previous year[8]. - Cash provided by operating activities decreased to $4,297,210 from $4,592,845 year-over-year[8]. - Cash used in investing activities increased to $(8,833,698) from $(4,858,187) in the previous year[8]. - The company raised R$50,691 in net fundraising during Q1 2023, compared to R$1,335,715 in the previous quarter, indicating a significant decline in fundraising activity[159]. Market and Operational Developments - The company is focusing on market expansion and new product development to drive future growth[3]. - The Cerrado Project involves building a pulp production mill with an estimated capacity of 2,550,000 tons per year, with total investment of R$19,300,000, expected to start operations in the second half of 2024[22]. - The acquisition of Kimberly-Clark's tissue business in Brazil is valued at US$175 million (approximately R$922,915), with a factory capacity of 130,000 tons per year for tissue products[23][25]. - The company has 13 industrial units and operates in the pulp and paper sector, producing hardwood pulp and various paper products[10]. Risk Management - The company has not identified any short-term or long-term risks related to supply chain interruptions due to the Russia-Ukraine conflict, although there has been increased volatility in commodity and energy prices[25]. - The company continues to monitor the impacts of the Russia-Ukraine conflict on its operations and has not experienced significant disruptions in logistics or commercial transactions[25]. - The company has a hedging policy in place to manage exchange rate risks, including a maximum notional amount of $1,500,000 for the Cerrado Project[63]. - The company is exposed to commodity price risks, particularly in hardwood pulp prices, which may impact operating results due to global market dynamics[86]. Shareholder Information - The company has cancelled 37,145,969 treasury shares at an average cost of R$40.84 per share, totaling R$1,517,224, resulting in a new share capital of R$9,269,281 divided into 1,324,117,615 shares[27]. - The company’s share capital was R$9,269,281 divided into 1,361,263,584 common shares as of March 31, 2023, with a net share capital of R$9,235,546 after public offering expenses[195]. - The company held 16,727,500 treasury shares as of March 31, 2023, down from 51,911,569 as of December 31, 2022[197]. - The company repurchased 1,961,900 common shares with a total market value of R$87,243 up to March 31, 2023, under a repurchase program approved on October 27, 2022[198]. Sustainability and Environmental Initiatives - The Horizonte de Carbono Project has validated 1.9Mt CO2e of carbon credits, with 1.7Mt CO2e eligible for issuance, although the credits have not yet been issued[106]. - The company has ongoing projects for carbon credit certification, contributing to sustainability and financial viability through the commercialization of carbon credits[106]. - The company’s biological assets increased to R$15,114,469 as of March 31, 2023, up from R$14,632,186 at the end of 2022, with additions of R$1,393,291 during the period[144].