Brazil’s Suzano posts quarterly profit fall, swaps CEO after 11 years

© Reuters.

By Andre Romani and Patricia Vilas Boas

SAO PAULO (Reuters) -Brazilian pulpmaker Suzano posted on Wednesday a 39% fall in its fourth-quarter net profit from a year earlier as lower pulp prices hit its revenue, while the company also announced its first CEO change in more than a decade.

Suzano posted 4.52 billion reais ($909 million) in net profit in the quarter to the end of December.

Its net revenue also fell in the period by 28% year-on-year to 10.4 billion reais, with pulp sales stable in volume, but prices down 31%.

Still, Suzano said it saw a material improvement in market sentiment, especially in the second half of the year, after what it called a “challenging first half marked by the drop in pulp prices.”

Suzano has been raising prices over the past several months, with another hike announced this week and slated to be implemented in March.

Compared to the third quarter, the firm’s net revenue rose 16%.

Suzano’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at 4.51 billion reais in the quarter, down 45% from the same quarter a year earlier.

Overall, Suzano delivered “solid” results, Santander (BME:SAN) analysts wrote in a note to clients, with in-line EBITDA.

CEO SHAKEUP

The firm also announced that its board had approved taking on Joao Alberto Fernandez de Abreu, current head of rail operator Rumo, as its new CEO to replace Walter Schalka, who has led Suzano for 11 years and will be appointed to its board.

A succession process will begin in April, and Schalka will leave the role on July 1, Suzano said in a securities filing.

Schalka told Reuters he is leaving the role for personal reasons.

“I’m not going to hang up my hat, that’s not my goal, my goal is to keep working,” he said.

“I just don’t want to stay in the intense routine of being Suzano’s CEO, which is quite demanding.”

JPMorgan analysts wrote in a note that Schalka is well regarded by investors, but that the “organized transition process” should “mitigate the effects” of his leaving.

Rumo said in a filing that Pedro Marcus Lira Palma, the railroad operator’s chief commercial officer, has been appointed to replace Abreu as CEO.

($1 = 4.9728 reais)