Suzano's Q1 2025: Unpacking Contradictions in M&A, Dividends, and Pulp Market Strategies

M&A strategy and scope, dividend policy and shareholder returns, pulp price and market conditions, capital allocation and investment strategy are the key contradictions discussed in Suzano's latest 2025Q1 earnings call.



Strong Pulp and Paper Business:
- Suzano presented results in line with expectations, with EBITDA margin at 49% and pulp invoicing prices and cash costs as expected.
- The focus on strategic capital allocation and cost reduction was emphasized to strengthen competitive positioning.

Inventory Rebuilding and Market Dynamics:
- Inventory levels were rebuilt to normalized levels, despite maintenance downtimes impacting production volumes.
- The focus on market demand normalization was driven by uncertain global trade conditions and potential tariff impacts.

Pulp Pricing and Market Uncertainties:
- Pulp prices faced downward pressure due to market uncertainties, with resale prices breaching marginal cost levels.
- This situation is expected to lead to production adjustments, particularly in Europe, due to currency fluctuations.

Paper Packaging Progress:
- Suzano packaging operations improved significantly, with EBITDA rising 67% quarter-over-quarter.
- The turnaround strategy is on track, with operations approaching breakeven and expected positive EBITDA in the second half of 2025.

U.S. Market and Trade Policy:
- Suzano's strategy for potential acquisitions in the U.S. remains unchanged, with a focus on demand analysis amid trade uncertainties.
- The company's logistics advantage is expected to provide a basis for competitive positioning in a volatile market.