Suzano Pulp and Paper Discloses Consolidated Results for the 2nd Quarter of 2008

Learning curve of the Mucuri Line 2 concluded in June. Production of 221
thousand tons for the quarter.

SAO PAULO, Brazil, July 23 /PRNewswire-FirstCall/ -- Today, Suzano Pulp
and Paper - (Bovespa: SUZB5), one of Latin America's largest integrated
producers of pulp and paper, announced consolidated results for the 2nd
quarter of 2008 (2Q08). The Company's operational and financial data is shown
on the basis of consolidated figures in Reais, pursuant to the Brazilian
Corporate Law accounting method. Comparisons, unless otherwise stated, refer
to variations between the 2Q08 against 1Q08 and 2Q07.
Highlights
-- Eucalyptus pulp price increased to US$ 840 / t (CIF Europe) in April;
in June, new increase of US$ 30 / t in Asia;
-- Hardwood inventories reached 34 days of supply in May, compared to 35
days in March 2008;
-- EBITDA record of R$ 354 million; EBITDA margin 35.2%;
-- Net income of R$ 186 million, 44% higher than 1Q08 despite the non-
recurring financial expense of R$ 111 million for the repurchase of
controlling stock from Ripasa's former shareholders; -- Net revenue of R$ 1
billion posts new record;
-- Pulp sale volume of 352 thousand tons;
-- Net Debt / EBITDA ratio drops to 3.19 in June;
-- Cash cost of pulp reduced to R$ 424 / ton;
-- Real appreciates 9.9% in the quarter;
-- Production record of 681 thousand tons of pulp and paper;
-- Announced today the new growth cycle for 2008 / 2015 (read Material
Fact released today).
Net revenue recorded in 2Q08 was R$ 1.0 billion, or 3.5 % higher than
1Q08, and 22.3% higher than 2Q07. That amount can be explained by the increase
in the pulp and paper sale volumes, mainly due to the production of the new
Mucuri line (Line 2).
The average pulp price reached R$ 1,181 / ton, 0.9% higher than the 1Q08,
positively contributing to the revenue. On the other hand, the appreciation of
the Real and the large share of the paper volume in the export market
compensated, in part, said positive effect.
The average price of paper was R$ 2,076 / ton in the 2Q08, at the same
level of the 1Q08 and 4.7% lower than that of the 2Q07.
Pulp price and volume increases raised that product's share in the
Company's net revenue to 41% in the 2Q08, compared to 25% in the 2Q07.
In 2Q08, 352.3 thousand tons of pulp were sold, a volume 1.3% higher than
that of 1Q08 and 100.4% higher than that recorded in the same period of 2007.
The growth compared to the 1Q08 took place due to the development of the
learning curve of the Line 2 at Mucuri. In the first semester, 700 thousand
tons of pulp were sold, an amount twice as large as that of the first semester
of 2007.
Similarly to 1Q08, the growing demand for eucalyptus pulp allowed for
absorbing the full additional capacity arising from the start of operations of
Line 2 at Mucuri, maintaining our inventories below normal levels.
Printing and writing paper sales were equivalent to 77% of this quarter's
sales volume, and reached 218 thousand tons, a 3.2% increase when compared to
the 1Q08, and in line with 2Q07. Sales of that product to the domestic market
were equivalent to 54%, or 118 thousand tons.
As to cartonboard sales, these were 9% higher than those of the previous
quarter, reaching 65 thousand tons. Compared to 2Q07, there was a 4.8% drop.
64.2% of the volume was sold in the domestic market.
Production recorded in the 2Q08 reached a volume of 680.7 thousand tons,
of which 400.3 thousand tons were market pulp and 280.4 thousand tons were
paper.
Cash cost of the pulp production in Mucuri in the 2Q08, without the cost
of the standing timber, reached R$ 424 / ton. That amount is 13.1% lower than
the recorded in the 1Q08 and 4.9% lower than the same period in the previous
year, and already shows a portion of the gains arising from the dilution of
fixed costs and lower specific consumptions at the Mucuri plant with the start
of operations of Line 2.
In the 2Q08 the cash generation measured by the Adjusted Ebitda reached
R$ 353.8 million, equivalent to a 3.7% increase when compared to the 1Q08 and
26.7% compared to the same period in the previous year. In the first six
months of 2008, the Adjusted Ebitda was R$ 694.9 million, 25.4% higher than
that of the first semester of 2007. The 35.2% Ebitda margin remained stable
when compared to the previous quarter and increased 1.2 p.p. compared to the
2Q07.
The Adjusted Ebitda in dollars for this quarter was US$ 213.7 million,
8.9% and 51.6% higher than the 1Q08 and 2Q07, respectively. In this semester,
the Adjusted Ebitda in dollars was US$ 410.1 million.
Net income for the period was R$ 185.6 million, 44.3% higher when compared
to the 1Q08 and 7.8% higher if compared to the 2Q07. In the first six months
of 2008, accumulated net income amounted to R$ 314.2 million, 12.9% higher
than that of the first six months of 2007.
On June 30 2008, the consolidated net debt was R$ 4,106 million,
representing 3.19 times its cash generation (past twelve months adjusted
Ebitda) for the period compared to a debt of R$ 4,225 million and a ratio of
3.48 in the 1Q08.
The growth of cash generation (last twelve-month Ebitda) for the period,
which reached R$ 1,287 million, contributed to the reduction of the nominal
indebtedness.
In compliance with Paragraph 4 of article 157 of Law No. 6.404/76 and
provisions of the Brazilian Securities and Exchange Commission ("CVM") Edict
No. 358/02, Suzano Papel e Celulose S.A. hereby informs its shareholders and
the market in general, about projects which are part of Suzano's new growth
cycle for the period 2008 through 2015.
With the future implementation of these projects, the company's annual
pulp production capacity will increase by 4.3 million tons and its overall
pulp and paper production capacity will total 7.2 million tons per year.
The projects announced herein include three planned pulp lines and the
expansion of the Mucuri Unit:
-- Pulp unit in the south of Maranhao state (1 line).
-- Pulp unit in the of Piaui state (1 line).
-- Expansion of the Mucuri Unit production capacity by de-bottlenecking
existing Lines 1 and 2.
-- Additionally, a new pulp line is also planned to be installed in one of
the above-mentioned units located in Maranhao, Piaui or another new unit to be
defined.
The forecasted installed capacity of each new pulp line, based on
technology of current projects, is approximately 1.3 million tons per year.
The effective capacity will be determined when the respective engineering
projects are prepared based on technology then available.
Conference Call and Webcast on these Results:

In Portuguese:
July 24th - 9 a.m. (Brazil)
Access: +55 11 2188 0188
Password: SUZANO

In English:
July 24th - 11 a.m. (Brazil)
Access: +1 412-858-4600
Password: SUZANO

http://www.suzano.com.br/ri

SOURCE Suzano Papel e Celulose

IR Team, Suzano Papel e Celulose, +011-55-11-3503-9061