Suzano (SUZ) Q3 2026 earnings review
Suzano earns more on pulp, but oil lifts its costs
Suzano, the Brazilian maker of eucalyptus pulp, earned more from pulp even though oil made its mills dearer to run. Its dollar price for pulp rose 12% from a year ago. Arbex, the tissue business it now runs with Kimberly-Clark, added R$694 million of operating profit. Without Arbex, sales grew only about 1%, by our math.
| Sales from businesses owned a year ago | +1.2% +35.9% reported, with Arbex |
|---|---|
| Dollar price of pulp | US$588 a tonne US$525 a year ago |
| Net debt | US$14.7 billion 3.7 times yearly operating profit; 3.4 with a full year of Arbex |
| Full-year pulp cost outlook | Raised to ~R$825 a tonne ~R$800 before |
⚖️ Verdict: 🟢 Bullish
The story got better, because buyers in China paid more for pulp and Arbex arrived on plan. Suzano also pushed through new price increases in October. The bad news: oil lifted the full-year pulp cost plan to R$825 a tonne. Debt also reached 3.7 times a year of operating profit.
The question now is whether Suzano can cut its debt quickly while oil stays expensive. Either higher pulp prices bring net debt below the promised US$14 billion by December, or new Asian supply holds prices back and the target slips. Fourth-quarter results, due early in 2027, will tell.
🐂 Bull Case
Suzano Earned More per Tonne of Pulp
Pulp, the fibre used to make paper and tissue, earns most of Suzano's money. Its case rests on whether buyers in China, its biggest market, pay more for the hardwood pulp it makes from eucalyptus.
This quarter they did. Suzano's dollar price rose 12% from a year ago, and operating profit per tonne climbed 6%. That is the first gain from a year ago in five quarters. In October the producer pushed through new increases, which pulp sales chief Leonardo Grimaldi said were "fully implemented with no concessions".
- Pulp sold: 3.19 million tonnes, 1% less than a year ago
- Average pulp price: US$588 a tonne, against US$525 a year ago
- Pulp operating profit, excluding one-offs: R$4.8 billion, up 5%
This matters because supply decides the price. A large new mill in Indonesia, called OKI 2, pushed its start to early 2027, so Chinese buyers restocked from mid-quarter. But the delay only moves the risk. If OKI 2 and new Chinese mills arrive together, prices could slide back toward what Chinese producers spend to make pulp.
What to watch: the dollar pulp price in fourth-quarter results, due in early 2027. A price above this quarter's would show that the October increases reached customers' invoices.
Arbex Earned More Even as Tissue Sales Slipped
Arbex is the tissue business Suzano now runs with Kimberly-Clark. It makes toilet paper, facial tissues and paper towels in 14 countries outside North America. Chief executive João Alberto Fernandez de Abreu said its first quarter "came fully in line with our plan".
Suzano's comparison, which adds Arbex to past quarters, backs him. Tissue sales fell 4% from a year ago, yet operating profit rose 7%. The margin on those sales therefore widened.
The savings have not started yet. Finance chief Marcos Assumpção expects US$175 million of efficiency gains within three years. Weak tissue prices in Europe and Asia still pull sales down, so the gains must outrun them.
What to watch: Arbex's first savings figure, which should arrive with fourth-quarter results. A figure on time would support the plan Abreu described.
Currency and Oil Hedges Paid R$385 Million
Suzano sells pulp in dollars but pays most costs in reais, so a strong real hurts it. Its main protection is currency contracts called zero-cost collars, which pay out when the dollar sits below a set floor.
This quarter the currency contracts brought in R$294 million, and similar oil contracts added R$91 million. Finance chief Marcos Assumpção said the currency book would pay more than R$4.1 billion if the real held at its September level.
That cash matters because it cuts debt without help from pulp prices. But the cover is shrinking: the currency contracts total US$4.8 billion, against US$6.2 billion at the start of the year.
What to watch: hedge cash in fourth-quarter results. A similar payment would keep the debt plan moving even if pulp prices stall.
🐻 Bear Case
Debt Climbed to 3.7 Times Yearly Profit
Debt is the longest-running worry about Suzano. Buying into Arbex cost US$1.3 billion and added Arbex's own borrowings. Net debt therefore reached US$14.7 billion, or 3.7 times a year of operating profit.
Suzano's answer: excluding Arbex, net debt fell to US$12.5 billion from US$12.8 billion in June. With a full year of Arbex profit, the ratio holds at 3.4 times. Finance chief Marcos Assumpção said "deleveraging remains our top priority", and chief executive João Alberto Fernandez de Abreu added: "Nothing else is on our agenda at the moment."
The year-end target tests that. To finish the year below US$14 billion, as promised, the group must cut more than US$700 million in one quarter, by our math. Excluding Arbex, it cut about US$300 million this quarter. Assumpção said the plan includes no material asset sales, so it depends on pulp cash.
What to watch: net debt in US dollars at the end of December, published with fourth-quarter results. A figure above US$14 billion would mean the debt timetable is slipping again.
Oil Forced a Higher Pulp Cost Plan
Cash cost is what Suzano spends to make a tonne of pulp, excluding maintenance stops. Its old plan of about R$800 needed roughly R$778 in the second half, by our math.
The quarter came in at R$825, and Suzano raised its plan to match. Operations chief Carlos Fernandes de Almeida blamed the Middle East conflict, saying the group was otherwise "on track to deliver our original BRL 800 per ton cash cost target".
The numbers disagree. He put the conflict's effect at about R$14 a tonne. Without it, the cost still reaches R$811 by our math, above the old plan's need. Next year's target assumes oil at US$70 a barrel, finance chief Marcos Assumpção said.
What to watch: the fourth-quarter cash cost, due early in 2027, against the new full-year plan. A figure above the plan would show costs still climbing after the reset.
US Mill Problems Halved Paper Profit
Suzano's paper arm makes printing paper in Brazil and carton board at Pine Bluff, its US mill, sold as Suzano Packaging US. Its operating profit, excluding one-offs, fell 48% from a year ago.
By our math, the cost of making the products rose by about nine percentage points of the unit's sales, and selling and overhead costs took one more point. Fabio Almeida Oliveira, who presented the business, blamed "asset reliability and production efficiency" at Pine Bluff.
Brazil adds pressure, because printing-paper imports jumped 76% through August. Almeida Oliveira said the mill has run steadily since September, but it has stumbled in every quarter of 2026.
What to watch: paper profit per tonne in the fourth quarter. A return toward last quarter's R$941 would show the September repairs held.
Risks this quarter didn't answer
Four standing concerns got little or no new evidence in these results. Each stays open until a later disclosure settles it, and the items below name that disclosure.
- Arbex savings: no figure yet; Suzano says gains start in the fourth quarter, so the next results should bring the first number.
- A stronger real: it averaged R$5.14 per dollar against R$5.45 a year ago; the size of currency cover for 2027 will show the exposure.
- New Asian pulp supply: OKI 2 now starts in early 2027, and Indonesian wildfires may delay it again; its start date settles the risk.
- Another acquisition: chief executive João Alberto Fernandez de Abreu said nothing else is on the agenda; any deal before debt falls would reopen the fear.
👓 Other Themes
Tissue Now Reports as a Separate Business
Because Arbex is large, Suzano now reports tissue as its own segment and prices the pulp it sells that unit at market rates. One side effect cut operating profit by R$210 million: Arbex had not yet resold pulp bought from Suzano, so the profit waits for that sale. The release adds: "This effect is non-recurring".
💲 Other KPIs
Spending on mills, forests and land fell to its lowest share of sales in five quarters. Cash investment dropped 20% from a year ago, to R$2.9 billion. The year-ago quarter included an R$878 million payment to Eldorado Brasil for standing timber, and Arbex's sales also widen the base.
Customer receivables jumped 38% from a year ago, a little ahead of sales, while inventories climbed 21%. Arbex explains most of both, because it brought R$3.5 billion of receivables at closing. Working capital still released R$211 million of cash in the quarter, below the R$463 million of a year earlier.
Suzano kept buying back stock slowly. It spent R$65 million this quarter. The current programme has now bought 4.7 million shares at an average of R$42.18. Outstanding shares fell about 0.4% from a year ago, because the group ranks debt reduction ahead of buybacks.
The margin slipped to 34% from 43% a year ago. Most of the drop comes from mix, because tissue earns thinner margins than pulp and now makes up about 30% of sales. Pulp alone kept a 50% margin, level with a year earlier.
🔮 Guidance
Raised, which means higher costs. The plan now puts the year about 3% above the old figure. By our math, that leaves about R$830 a tonne for the fourth quarter. That would sit 7% above a year earlier. Suzano now assumes a weaker real and Brent oil at US$94 a barrel, up from US$84.
Unchanged. The target, called total operating disbursement, adds production cost, upkeep spending, freight and overhead for each tonne of pulp. By our math it sits about 4% below 2025's R$2,062. Finance chief Marcos Assumpção said Suzano will update it by year end, and that oil prices will drive the change.
New. The plan has net debt shrinking from this quarter's level by December, at an assumed R$5.40 per dollar. By our math, that needs a cut larger than in any quarter of the past year. Assumpção said it includes no material asset sales, so pulp volumes and prices must do the work.
Unchanged. Suzano still aims for net debt of US$11 billion by 2028. The ratio target stays below 2.5 times a year of operating profit. Both targets leave out the effects of the Arbex deal, so they do not show where the combined group's debt should land.
Unchanged. The plan leaves out Arbex, which spent R$216 million this quarter. By our math, that leaves about R$2.5 billion for the fourth quarter, below this quarter's pace. Lower spending would help the year-end debt target.
❓ Key Questions
When will Suzano report its first Arbex savings?
Finance chief Marcos Assumpção targets US$175 million of efficiency gains within three years and says they start in the fourth quarter. A first figure would show whether tissue profit can keep rising while European and Asian tissue prices fall.
What will the 2027 cost target assume for oil?
The 2027 target of about R$1,983 a tonne assumed Brent at US$70. Oil ended September near US$98, and Suzano already raised its 2026 cost plan for that reason.
What did the US packaging mill earn this quarter?
Suzano blames Pine Bluff for most of the fall in paper profit but does not publish the mill's own result. Without it, readers cannot track the promised move to positive cash flow by 2028.
How large is the risk from the Austrian tax claim?
Brazil's tax office seeks about R$5.3 billion over profits of an Austrian trading unit. Suzano rates a loss as possible and holds no provision; by our math the claim equals about a quarter of a year's operating profit.