SUZ

That Suzano business model has distinct attributes that set it apart in the pulp and paper industry, and provide greater resiliency in the current global environment. Our consistent long-term focus and conservative financial management reduce the company exposure to risk associated with the current geopolitical landscape. For example, in international logistics, Suzano operates under long-term contracts with dedicated vessels. We have more than 50 vessels, and 10 of them fully dedicated to our operations, which protects the company against increases in freight rates and ensures reliable services to customers worldwide. Additionally, the company has inside the fence production of critical inputs for its manufacturing process, mitigating supply risk and also cost pressures. Finally, to reduce the impact of energy cost pressure linked to higher international oil price, Suzano maintains a hedge portfolio that mitigate its exposure to Brent related volatility.

During our presentation, Marcos Assumpção will give you further details about that. Turning to our results, let me start with the EBITDA of the first quarter. In our view, the numbers reflects a solid performance with volumes above first quarter of 2025 given historical seasonality compared with fourth quarter 2025, supported by higher pricing and G&A expenses that fully offset year-over-year inflation. These results are starting to show the management clear focus on strengthening the company structural competitiveness. As a highlight, I also would like to share with you that we are currently running our operation with 10% less headcount when compared with a year ago. Besides that cash production cost delivering in the first quarter of 2026 was 100% aligned with our operational plan, and also aligned with what we mentioned in the previous call.

Despite cost pressures arising from the current geopolitical environment, and based on the visibility we have today, we continue to expect our average cash costs in 2026 to be below 2025 levels. Let me move for free cash flow. The free cash flow in the first quarter of 2026 reflects specific cash flow items in the quarter. As we know, dividends payment, also the timing of interest payments under our debt schedule, and also a one-off CapEx related to the wood swap with Eldorado last year. Our capital allocation priority remains focused on further strengthening Suzano's capital structure with a clear emphasis on reducing net debt.

Before handing to the call to Fabio Almeida, I also would like to note that we are encouraged by the efficiency gains already mapped in our JV with Kimberly-Clark, which reinforce our expectation of value creation going forward and confirm the quality of the capital allocation decision underlying this partnership. Having said that, let me hand over to Fabio that will cover paper and packaging business.

Thanks, Alberto. Good morning, everyone. Looking at our markets in Brazil, printing and writing demand, according to IBÁ, increased by 3% in the 1st two months of the 1st quarter compared to the same period of last year, led by stronger coated paper demand and higher volumes of imported uncoated wood-free. International markets continue to face a challenging environment with a weaker demand and excess capacity for papers. According to PPPC, demand in mature markets declined by approximately 7%. In contrast, Latin America posts demand growth of 5% year-over-year. However, prices remained under pressure, giving very low prices from Asian producers across major markets. In paperboard, Brazilian demand grew 6% in the 1st two months of the 1st quarter when compared to the same period of last year, supported by imported improved economic activity.

In the U.S., AF&PA data shows that SBS shipments and production were broadly stable year-over-year, albeit at a lower operating rate around 82%. Production of liquid packaging board grades dropped 20% year-over-year, reflecting softer end consumer demand and inventory reduction by packaging converters during the quarter. In this context, during the first quarter, we experienced different dynamics across our Brazilian U.S. operations. While all Brazilian operations delivered stable volumes when compared to Q1 2025, we have seen lower volumes from Suzano Packaging as a result of lower demand and LPB inventory reduction at the converter's end. Turning to price performance in Q1 2026, continued to see sequential improvements at Suzano Packaging on a dollar basis, while our prices from our Brazilian operations suffered from lower export prices and FX impacts.

Our export prices were further affected by reduced shipments to the U.S. market, which used to be one of our strongest combinations of prices and volumes abroad prior to the imposition of tariffs. At EBITDA level, the 8% year-over-year decline was mainly driven by lower export prices from Brazil together with FX appreciation. Meanwhile, Suzano Packaging EBITDA delivered strong EBITDA increase of 167% year-over-year, reflecting our turnaround effects. I would like to highlight the cost improvements achieved in our Brazilian operations, which delivered 8% lower COGS per ton on a year-over-year basis and a 6% reduction on quarter-over-quarter. These gains were driven by lower cash costs across all mills and lower logistics costs, supported by our continuous focus on operational excellence.

At Suzano Packaging, costs in first quarter were impacted by higher natural gas consumption and prices during the severe winter storm in major part of the U.S. at the end of January. Total weather-related costs were estimated around $5 million. Looking ahead to the performance of Suzano's paper and packaging business, sales volumes and prices for our Brazilian and U.S. operations will improve in Q2, following the usual seasonality and with the implementation of price increases and the pass-through of cost and the indexes in our U.S. contracts. Market conditions are expected to lead paper producers to increase prices since higher raw materials, energy, and logistics costs are expected to hit paper producers hard as a result of the ongoing conflict in the Middle East.

We expect our industrial cash costs from our Brazilian operations to be stable in Q2 versus Q1, while logistics costs should trend slightly higher due to increased diesel prices and container rates. At Suzano Packaging, our annual maintenance is scheduled for early May, which will temporarily impact production costs in the quarter, in line with our business plan. We don't expect any sales impact from the annual maintenance shutdown, and we are fully committed in delivering full full-year results for Suzano Packaging better than what we did last year. I'll hand it over to Leo, who will present our Pulp business result.

Thanks, Fabio. Good morning, everyone. Let's now turn to our Pulp Business Unit, where I'd like to share with you the highlights of the first quarter of 2026, as well as my view for the upcoming months. This past quarter was marked by more balanced market fundamentals as a consequence of healthy paper production in key markets and supply-side events reducing short-term availability of hardwood pulp. In China, paper and board production, according to SEI, posted a 15% increase compared to Q1 2025, with growth across all paper segments in January and March production levels in line with the highest in record production month of 2025.

Recent supply-side developments, notably pulp production curtailment in Indonesia following the revocation of forestry licenses and a greater clarity on the delay of APP's OKI-2 project startup to year-end, meaning that no new market pulp volume will reach the market in 2026. This all has supported hardwood pulp price increases during the quarter to all markets with strong order intake levels and slightly above our forecast, resulting in continued delivery backlogs, particularly for Asian markets, including China. In this context, Suzano sold 2.84 million tons of pulp in Q1 2026, representing almost 200,000 tons increase compared to Q1 2025, which was fully consistent with our sales plan designed accordingly to market seasonality. Pulp production volumes during the quarter came in below budgeted levels due to some non-recurrent events during plant maintenance and the ramp-up following the scheduled downtimes.

As a result, we were unable to rebuild inventories throughout the quarter, and our inventory levels ended Q1 2026 quite low and flattish like year-end 2025. Our industrial teams are fully committed to gradually recover these lost volumes, mostly on the 2nd half of this year as demand picks up towards year-end. With the unfolding of the year-end war affecting logistics to key markets where we have important customers, our unique and irreplaceable logistics, as Alberto has said, enabled us to keep delivering pulp to our customers in the region, being able to surpass any eventual additional war-related surcharges to ensure pulp supply chain continuity.

Looking to the right side of our slide, the BRL 4.1 billion in EBITDA was a result on a year-over-year basis of higher volumes, lower costs, and better prices in US dollar terms, however, facing a toll from FX appreciation during the period. Compared to the previous quarter, EBITDA declined despite higher pulp prices in US dollars, primarily due to seasonality, a stronger Brazilian real, and a more intensive maintenance schedule. Looking ahead, I would like to highlight a few key points. The conflict involving Iran war has unfolded so far, uneven implications across regions and markets.

In Europe and North America, demand has exceeded our expectations with paper producers increasing their operating rates to capture temporary market opportunities amid reduced competition or longer and more expensive logistics affecting prices, as well as a surge in these markets to build up finished goods inventory on the whole value chain. This dynamic has led us to announce a new round of price increases for May, specifically directed to Europe and North America. The war has also been affecting cost structures of different pulp players in different regions as energy matrixes vary, while also raising imported wood delivery costs to key markets and impacting logistic costs and flows. Overall, supply and demand dynamics have diverged meaningfully between hardwood and softwood grades. Hardwood pulp fundamentals will remain quite balanced and healthy, a backdrop that contrasts with the current situation faced by softwood producers.

In softwood, we continue to observe high inventory levels in China, which combined to declining prices throughout the past months, result in an increasingly unsustainable environment in our view. According to a recently updated report from a well-known industry consultant, roughly 11 million tons of softwood, which is equivalent to 40% of global softwood capacity, is currently operating at a loss. Again, 40% of total softwood production is currently operating at a loss. The situation is further aggravated by higher war-related cost pressures still to impact their cost structures. These dynamics point out to a higher likelihood of commercial downtimes or permanent closures of softwood mills, especially in the Northern Hemisphere, while also incentivizing projects of de-verticalization of integrated pulp and paper producers in the western part of the world, as we have been stating before.

The ongoing convergence of hardwood and softwood pricing with different dynamics in Western and Eastern markets has increasingly shaped recent discussions with our customers as softwood market imbalances intensify competitive pressure. Our commercial strategy is structurally focused on maximizing our sales, also taking into account seasonality and regional dynamics while reinforcing the fiber substitution and expanding the addressable market for hardwood. Fostering fiber to fiber and increasing the addressable market for hardwood is totally key for us. Looking specifically into Suzano's Q2 2026 sales volumes performance compared with Q2 2025, our production output will be constrained by previously announced planned maintenance downtimes at major pulp lines, such as Três Lagoas 1 and 2, Mucuri Line 2, and Jacareí. As well as by the lower operating rates at some of our mills, resulting in almost 300,000 tons of production reduction year-over-year.

In addition, some inventory rebuild will definitely occur in Q2 2026 as we were unable to increase inventory levels in Q1. We plan to keep this rebuild in minimum possible levels. It is critical to ensure our high service level standards to our global customer base, as well as operational efficiency. To conclude, I would like to reinforce that Suzano's unmatched business platform, supported by our best-in-class assets and a unique logistics structure, provide us agility and resilience across our supply chain. This enables us to respond quickly to changing market conditions, capture commercial opportunities, and consistently maximize value, even in an increasingly volatile and uncertain global environment. We are very well prepared to navigate these rougher seas. With that said, I would like to invite Aires to address our cash cost performance during this past quarter.

Thank you, Leo. Good morning, everyone. Cash costs in the first quarter 2026, excluding stoppages, it reached BRL 802 per ton, up 3% quarter-on-quarter. The increase was mainly driven by temporary operational factors, including higher input consumption, especially auxiliary materials, reflecting the scheduled replacement calendar associated with planned shutdowns. In addition, purchased energy costs were higher due to a no recur event at mills. We also saw a temporary pressure from wood costs driven by higher specific consumption, as well as a lower fixed cost dilution following the addition of production volumes in the quarter. These effects were partially offset by a lower input price and by the 3% average depreciation of the US dollar versus the real, which reduced the costs in local currency for items such as caustic soda and natural gas.

Finally, energy sales performance improved, supported by a higher average price and the start of volumes contract in the auction for surplus energy from the Ribas do Rio Pardo mill. Importantly, there was no impact from the Middle East conflict on our cash cost in the first quarter 2026. Year-over-year, cash costs excluding stoppages decreased 7% in the first quarter 2026, driven by a combination of favorable factors. The main driver was the 10% average depreciation of the U.S. dollar against the Brazilian real, which reduced the cost of key dollar linking inputs, particularly caustic soda, natural gas and chlorine dioxide. We also benefit from the lower wood costs, reflecting a shorter average from forest to the mill distance, lower diesel prices in the harvest and transportation, and a favorable mixed effect related to wood sourcing and mill allocation.

In addition, input price excluding effects came down, especially caustic soda and natural gas, while fixed costs were also lower following reduced spending on the labor and service. Energy sales delivered a stronger result, supported by a higher average energy price, including a contribution from the previously mentioned energy auction. Look ahead to the second quarter 2026. Our initial expectation was for cash costs to be closer to the first quarter 2026, reflecting the high intensity of scheduled maintenance shutdowns according to our operation plan for the year. We now anticipate some pressure on the cash cost in the quarter related to the impacts from Middle East conflict, particularly through energy and other input markets. Our current expectation is for our cash cost in the second quarter 2026 to increase by low single digits versus first quarter 2026.

This headwind is partially mitigated by our Brent hedge portfolio, which our CFO will now address in more details. First, additionally, even with this conflict scenario, based in our assumptions that we have today, we expect to close 2026 with average cash costs lower than compared to 2024, 2025, even on nominal basis. Again, a disclaimer, this forecast is based on the assumptions for Brent and here say a year to go at $85 the Brent, and inputs that we have today. Marcos, the floor is yours.

Thank you, Aires. Good morning, everyone. I'll start my presentation explaining Suzano's exposure related to oil and also detailing our hedge portfolio, which offers a clear competitive advantage in the current volatile environment. On the left part of the slide, we show a sensitivity to the variation of Brent prices, assuming a full pass-through of all the impact of Brent to local prices, which have not occurred yet. In this case, for every $1 per barrel increase in Brent, our EBITDA will decline by BRL 47 million. However, our current net cash impact of the event of $1 per barrel increase in Brent prices is only BRL 12 million, less than 25% of the full impact that we showed in this table.

The diminished impact is explained namely by long-term diesel contracts which have not been impacted by higher oil prices yet, and most importantly, by our portfolio of hedges on oil that we built over the past two years, which will likely compensate higher costs with positive derivatives and financial results. Moving to the right part of the slide, we show our current portfolio of oil hedges, due to our exposure to shipping costs and also natural gas prices. We also use zero-cost collars for our hedges, but in this case, we buy options and we're selling put options with the same premium. Our current portfolio ranges between $57-$69 per barrel on average, which means that our cost of oil for the hedges that we made is capped at $69 per barrel.

Of course, we gave away the possibility of having lower than $57 per barrel cost, as we did the zero-cost collar. We are nearly 90% covered for our 2026 exposure. As we made in the sensitivity, if Brent prices stays at $104 per barrel, which was the level that we closed by the end of first quarter 2026, we will receive a cash adjustment of BRL 810 million over the upcoming two years. In the first quarter of 2026, we already benefited from our hedges, and we had the positive cash impact of BRL 48 million in our results due to our oil hedges. Moving to the next slide. I also like to reinforce our FX hedge portfolio, which is already offsetting the impact of BRL appreciation.

As you can see, our current portfolio stays at $5.6 billion, which means more than 60% of our FX exposure, with an average put option of $5.97 and a call option of $6.90. The chart on the right, we show our full portfolio and also the impact, the cash expected impact if the currency remains at BRL 5.22, which was the same level that we closed the first quarter of 2022. If that was the case, we will receive more than BRL 4 billion in positive cash adjustments over the upcoming quarters as well. Moving to the next slide. On the top part of the slide, we can see that our net debt increased slightly to $13 billion in this quarter, namely impacted by the dividend payment in the beginning of the year.

Also higher CapEx out payouts and a concentration of interest payments in the period. Our leverage remain relatively stable at 3.3x when measured in US dollars. Regarding our amortization schedule, we continue to have a healthy average maturity of more than six years, while we maintain our average cost at 5%, which is also a clear competitive advantage for the company. I also like to highlight that following the end of the quarter in April, we concluded two other very important transactions in the local market. We issued a CPR of near BRL 2.5 billion, nearly $500 million, with an average term of 11 years, and we swapped that into CDI, and we stayed at 96% all-in swapped cost of CDI. A very, very competitive instrument.

We were also able to issue an additional BRL 180 million in incentivized debentures with a 15-year average maturity and with even more competitive costs. Now I would like to hand it over to Alberto for his final remarks.

Thank you very much, Marcos. I think the summary of what you just said, I would say that we should have a unique portfolio, hedging portfolio for FX and Brent in the industry. I would say at least one of the most robust hedging portfolio to face the current business environment. I think this is the first thing. The second one, going back to Fabio's presentation, let me highlight one of his point, which is he is expecting sales in pricey in U.S. and Brazil improving already in the Q2. On the pulp cost, we, as we mentioned, continue to improve our performance, is showing the commitment of this management on this line of our business, not only on cash costs, but many other line of costs.

On the JV, as I mentioned, we are moving fast and the closing is estimated to be on the third quarter of 2026. A 100% alignment of what we planned. This management will keep the focus on strengthening our balance sheet, competitiveness, and also reducing our net debit. Having said that, we will open for questions. Thank you very much.

We will now begin the Q&A section for investors and analysts. If you wish to ask a question, please click on raise hand. If your question has already been answered, you can leave the queue by clicking on Put Hand Down. Our first question comes from Daniel Sasson with Itau BBA.

Hi, everyone. Thank you so much for taking my questions. My first question for Leo. I mean, since the last call, the price drivers seem broadly unchanged, Leo. I'd like to know if you agree with that. Restrictions in Indonesia, reasonably healthy Chinese demand, still somewhat tight supply. The announced price hikes have been harder to implement, right? I'd like to know if that's also your view. Digging deeper into that, what explains, you know, the main increase being focused on Europe rather than in China? How do you see, you know, the continuation of land revocations in Indonesia, the impact on pulp costs in China?

If you could give us some color on that, it would be great. My second question is actually more of a follow-up in your, from your initial speech. You haven't been able to replenish inventory levels because of the maintenance stoppages you mentioned. You also mentioned logistic challenges in the quarter. Can you please elaborate a bit more? I mean, did the logistic challenges translated into lower revenues in the first quarter that were pushed to the second quarter, or did you have any one-offs in terms of production that didn't allow you to replenish inventories as quickly as you thought you would? Those would be my questions. Thank you very much.

Hi, Daniel. This is Leo here. Thank you for your questions. On the first one, you are correct. The price drivers that I mentioned in the last call, related to hardwood are unchanged. We still see a positive demand and actually a positive surprise coming from Europe and U.S. tissue, where we see even stronger demand than we had originally forecasted. On the supply side of the equation, again, you are correct. The factors that we had pointed out are confirmed or even further confirmed, being the revocation of forestry licenses in Indonesia affecting pulp, market pulp production and availability in Q1. Also the postponement, now very clear, of OKI-2 to year-end and maybe even beginning of 2027. That is really unchanged.

Regarding implementation of price hikes, I think we have to separate the world in two. We have Eastern markets, and we have Western markets. Eastern markets, our prices have been increasing continuously since mid last year, while softwood prices have been declining continuously since mid last year. Now this price differences have reached a point where all our negotiations are much harder with our customers if we want to sustain this fiber to fiber agenda, which as I have mentioned in my speech, is a priority to us. At this time in Asia, we are being cautious. We are waiting. We understand that something has to happen in softwood. As I mentioned, 40% of the global production is bleeding as we speak.

We are not in a position to make moves that will jeopardize our overall strategy of supporting a much bigger market, an addressable market for hardwood in not only short-term, but mid and long-term. In Western markets, different than that, still the price gap between fibers allow us to keep increasing our pricing, our prices. That's why I can confirm to you all now that we have managed to implement full the $50 increase in all Western markets as we had announced, and now we are back getting prepared for this new implementation of the recently announced $50 for May. Different market conditions, depending not only on regional demand, but also in how we are positioned against softwood pulp, with the strategy of maintaining this fiber to fiber agenda.

Our lower sales in Q1 is not related to logistics impacts. It's really related to our plan. We had a very strong Q4 last year. We understand and our customer base has a seasonality where we have a lower Q1 traditionally to a Q4 of the previous year. Despite that, we were able to sell 200,000 tons above last year or Q1 2025. In terms of our plan, we were completely aligned with our sales plan, but some one-off events in the maintenance downtimes and their ramp-ups, as I have mentioned, did not allow us to make this replenishment of inventories, which was our original plan.

I have also confirmed in my speech, Aires and his team are fully devoted and aligned to recover this production, mainly on the second half of the year, which is actually good for us because that's when we have demand pickup. That would be a perfect match for us as well. That all said, we will have to do some inventory replenishment in Q2 2026. We're gonna try to keep it to a minimum possible, not to affect our overall figures, but it is necessary, and we have to do it now.

Thank you so much, Leo.

Our next question comes from Marcio Farid with Goldman Sachs.

Thank you. Morning, everyone. Leo, I think we spoke last time in China, and you mentioned the plan to try and create, you know, a business outside of China, and especially with the integrated mills pushing for a potential disintegration as well. It caught our attention. Seems like there is potential there. Just wanted to understand, you know, what is the latest there, and if you have any updates and more details you can disclose to us. Maybe second question to Alberto. Alberto, obviously, share price performance has been a disappointment.

We look at the last, you know, whatever window you wanna look, one year to date, five years, you know, share price is basically below, where, you know, even before Cerrado start up, which was a $5 billion investment, right? We speak to investor, obviously capital allocation and the leverage levels, it's, you know, two main points of attention. Obviously the sector has derated with all the structural change that we have been observing as well. I wanted to hear from you and, you know, from management from the board side, is there a level of discomfort with the recent trend?

If there is anything that can be done or you think it's a matter of market understanding that Suzano's strategy might take, you know, longer to be reflected on share price and on investors perception to what value generation is. I think it's inevitable that we discuss that given the recent trends, it would be great to hear from you. Thank you.

Hi, Marcio. This is Leo here. I would just to answer your question, do a step back so that we have all stakeholders aligned in terms of what we talked about in China. Suzano's strategy in leading the fiber to fiber agenda consists in two very clear avenues. The first one is fiber substitution itself throughout education projects, refining pilot plans, and then applying our knowledge in our customers machines and mills to be able to substitute not only softer grades, but also other kinds of fibers like U.S. mix, hardwood or bamboo or any other alternative fiber as well. That's a one of the avenues.

The second avenue is a very important one, a bit more complex in terms of timing, which is how to deverticalize integrated pulp to paper producers, right? We all know that globally, now we are reaching almost 120 million tons of pulp to paper or packaging vertical lines producers. A big part of that is on Western markets, and a big part of that are old mills. Very old mills or old mills which are being pressured for a quite a while now in terms of their cost structures, in terms of pulp production. I would say that even further pressure now with war related cost pressure. This is a key part of our strategy.

We have been engaging with several of these players, very known in their markets. The idea is to together with them discuss an alternative route where they are becoming more asset light, shutting down their pulp productions and Suzano being able to virtually integrate with them as their solution in terms of pulp supply, making them more competitive in this challenging and competitive world ahead of us and ahead of them. Projects are ongoing. These are longer maturity projects than the first avenue of fiber to fiber. We are in the imminence of confirm the first project, and we are gonna give full visibility obviously when that happens.

Because I personally believe that this hero case will show not only to the customers that we have already engaged with, but several others that there is a possibility, there is an alternative to verticalization which is happening in Asia.

Marcio, thank you for your question. A couple of things regarding your question. The first one, of course, the management is not comfortable with the share price. I think there's a couple of things that's related to that. Firstly, we don't think it's aligned with the robustness of the business. That's the first thing. There's not a single reason, of course. For sure the FX situation and the geopolitical moment, it's something that for sure affects. We see here in the management when we look the base that we have in terms of asset, in terms of asset portfolio, in terms of logistic, in terms of the trend of our cost.

Let's look for the trend and how do we see this in the mid long term, and not only about cash costs, but also all the other line of cost. We see a very robust and resilient business to face the moment and in the very, and I would say in the mid long term, we see a positive trend for the business despite the current situation. Based on that, regarding capital allocation, of course, on those moment, despite our focus on deleveraging the business that I have been saying and also reducing our net debt, buybacks is always an alternative.

In a moment like that, of course, we are analyzing right now that possibility, since it's regional level that we have to consider this kind of alternative. We also must take into account our track record on capital allocation. This is the way that we should be moving with the discipline and concentrated again on the elements that I just mentioned and extracting value from the investment that we made. Having said that, I do not foresee, just to clarify, any kind of movement that can impact our cash. Our, I would say inorganic move that can impact our cash in the next coming years.

Again, to keep very disciplined, and maintain the track record that we that we have been seeing on capital allocation. Thank you very much, Marcio, for the question.

Thanks, Alberto. Maybe a quick follow-up to Leo. Leo, you mentioned you wanna replenish inventories. In our calculation, you should have been lost about 160,000 tons of production from capacity already considering the 400,000 tons that you lost. But by the numbers reported, it seems like you lost 400,000 tons. You have not recovered any inventories, which might suggest that the downtimes were much longer than expected. You're talking about, you know, replenishing inventories on a even more aggressive downtime in the 2nd quarter, which means sales are gonna be even weaker. Is that the right way to think about it? Was the downtime more aggressive than expected in the 1st quarter? Thank you. Thank you, Alberto, again.

Marcio, thanks for your analysis and questions, but unfortunately, we do not close our production figures nor our inventory figures for the past quarter, and also not looking and going forward. What I can tell you is that despite the concentrated maintenance downtime seasons that we have now even further in Q2 2026, which we had zero, by the way, in Q2 2025. The need to reestablish inventories and we will push that to the minimum possible levels. The sales output in Q2 tends to be above what we have performed now in Q1 2026. Again, this is not a guidance. It's just to show the trend that we are seeing here at Suzano.

Obviously due to the implementation of the price increase rounds that I have mentioned previously in our backlogs, we see a much better also pricing in Q2 compared to Q1 2026. All this in US dollar terms, obviously.

Great. Thank you very much.

Our next question comes from Rafael Barcellos with Bradesco BBI.

Hello, good morning. Thanks for taking my questions. Alberto, Marcos, in recent months you announced a buyback program, right? I understand that the company is now running with a leverage level which is above of where you feel comfortable. Other than that, you have the KC disbursements in the 3Q. When do you think that you'll be ready to start accelerating the execution of the program? You just, you know, discussed, you know, how low the shares are at the moment and so on. So just wanted to understand, I mean, when you believe you'll be ready to accelerate the program. Given, and that said, I would say that there's any sort of asset sales that you could use to accelerate the deleveraging process.

Just going back to the dividend policy question. I mean, if you see any room for a discussion of a more robust dividend policy in the company. My second question. Leo, sorry for one more question on pulp markets, you know, last quarter market a big change in your tone about pulp markets, right? I mean, you were clearly much more positive versus the previous quarters. I just wanted to, you know, wrapping up everything that you just said here in the call. I mean, you mentioned that Western markets are going up, prices are going up. Eastern markets, then you've seen more challenges, but you're still not seeing any sort of downward pressure on prices in Eastern markets, right?

I just wanted to, if you can wrap up, I'm understanding that in Western markets, you're still seeing good trends. Eastern markets, kind of mixed, but so far, you know, stable prices in the Eastern markets. If you can just wrap up, your views could be helpful. Thanks a lot.

Hi, Rafael. Thank you for your question. Marcos here. Regarding buybacks, I think Alberto already mentioned, we are already analyzing. It's, for sure it's, an interesting capital allocation for the company. We always look at that considering our leverage levels, but we also consider the valuation levels of the company as well. We would like to highlight and reemphasize that we continue to be one of the companies in our sector with the highest free cash flow yields, with nearly 14% as we included in our report. We also look at our valuation levels. We're trading well below our historical valuation levels. Definitely this is an option for us.

Regarding dividends, we would rather have a lower and more normalized leverage level before changing our dividend policy. We see room in the future as we deleverage to improve dividend payout, but that's not being discussed at the moment.

Okay. Rafa, this is Leo here. First, you really don't need to be sorry for sending us questions. We are well prepared, you guys can keep coming and keep sending us the pulp questions at all means. I think, Rafa, that the big change compared to our last quarter's call is really the trend that's going on on softwood, which has been deteriorating further than what we had already been seeing three months ago. It's impressive to say, as I have mentioned in my speech, that 40% of this industry, of the softwood pulp producers today have cash costs above current market prices, 40%.

This is a big change to the model, and as we want to be supportive to the fiber-to-fiber strategy, as I mentioned, this changes a bit, the tactic, in order how to navigate, especially in China, right? Because in Europe the situation, and also the U.S. is different, as I have mentioned. Just a quick sum up then as you asked. The war has been in fact resulting in different dynamics in different markets. Softwood scenario is unsustainable and has been an increasing headwind to our pricing strategy, especially in China and in Asia. In China, we are cautious to be able to support our commercial strategy and keep pushing this fiber-to-fiber agenda.

In Western markets we have a heated up demand, a bit over what we had expected or over what we have expected originally. Market dynamics have been changing quickly now further challenged by the Iran war. I am really confident that we at Suzano are the best position to navigate any scenario ahead of us.

Okay. Just a quick follow-up, Marcos. Would you consider any sort of asset sales to accelerate the deleveraging process?

Yes. We are analyzing, as we mentioned even in our Suzano Day last year, a couple of divestitures, mainly for non-core assets. I would say that land plots that could be measured or valued at square meter, not at hectares, for example, is a first option for us. The high best use for our land. This is one of the things that we have been considering, but there could be other options as well that we have been analyzing in order to reduce our leverage even quicker.

Okay. Thank you. Thanks a lot.

Our next question comes from Leo Correa with BTG.

Good morning, everyone. Thank you. A couple of pending numerical questions for me. Just first, reverting back to the cost discussion, right, Aires. You talked about a bit of a guidance, right, for the second quarter, which is of an increase, mid-single digits, vis-à-vis the first quarter, right? Which is probably gonna put things above BRL 900 per ton pulp cash cost. I remember some months ago that you guys gave some indications of cash cost levels for 2026 of about BRL 800. Since then, of course, a lot has changed. I think as Marcos explained, the hedges have been working very well and very well executed, clearly a lot of protection there.

Still many moving parts and of course, the base is very high. My question is: Can that indication of BRL 800 still be maintained, or you would say the numbers for 2026 are up for some discussions and probably higher levels? The second question, again, sorry for the detail. I know this is something that you already said in the introduction was a one-off, right? The CapEx at Suzano specifically has been an issue for investors over many years, right? They're still high number and above maintenance levels. The BRL 3 billion here is above the guidance for the year of BRL 10.9 billion.

I can assume the guidance is still maintained and that the levels going forward will drop and things will normalize. I just wanted to double check on that. Thanks.

Leo, this is Alberto. Let me take the second question, and then I will hand over to Galhardo. Very simple. I just wanna mention that the CapEx guidance is completely maintained. There's no change on that. By the way, we also, as I mentioned before, see a trend of lower CapEx in the next coming years. This is absolutely aligned with our plan. Okay. On the cash costs for the second quarter, let me hand over to Aires.

Hi, Leo. First of all, I said that they're low in the middle, single digit to the 2nd quarter, ex downtimes. That's was in my speech. We remain our targets, our focus on keep our cash costs close to 800 BRL per ton ex downtimes for full year. As I mentioned, our assumptions at this moment in the cash costs, especially to Brent, is $85 per barrel year to go. That's important to note that our hedges don't enter in this line in our balance sheets. Coming in other line that Marcos present. I am consider here this level of BRL 805 per Brent. If you have more, it could impact negatively the cash costs.

Okay. Thank you very much. Understood.

Our next question comes from Caio Greiner with UBS.

Hello. Good morning, everyone. Thank you. Leo, just going back to the point on the current pulp backdrop, and more specifically about the China and Western markets divergence. I wanted to explore a little bit more the weakness in China specifically, because I think it's a little bit hard to understand considering that we're seeing strong level of paper demand. We're seeing wood chip prices on the rise. I think the only point that I caught from your speech that there was the main source of weakness was the war impact. Is that right? Is that the main point as to why you're seeing such weakness in China?

In other words, if we were to see the war to end shortly, would we be able to see a reason for pulp to go back on the rise? Then specifically on softwood, again, why do you think that we're seeing such weakness on softwood markets versus hardwood, specifically in China? Considering that we're even seeing cost inflation, we're even seeing pine wood chip prices on the rise. I think maybe something a little bit more specific to China would be really helpful to us. Then the second point on wood chips, again, not only pine chips, but wood chip prices in general have been on the rise already $30-$40 per ton higher versus 2025 lows.

Again, we understand the slightly tighter operating environment in China with some capacity restarts, new capacity starting up, lower exports out of Indonesia. I wanted you to explore two points here on wood chips markets for us. How do you see this backdrop impacting both fundamentals and prices going forward? If you see this upward trend as something more structural or more of a short-term impact. Thank you very much.

Okay. Caio. Leo here. I'm gonna answer both questions. First, regarding China and what's going on there. Yeah, you're right. The demand is positive. Paper production has been performing very well, as I mentioned, 15% over what happened in Q1 2025. Domestic consumption is good. Exports have actually even been increasing as well. All these indexes or KPIs related to paper production and consequently pulp demand are positive. Now, I will have to split the answer in two, first analyzing hardwood and then softwood. On hardwood we have balanced inventories, even trending a bit low. We are seeing a lower trend of imports going into China, meaning that this balanced inventories could even tighten up a bit.

We had on the supply side of the equation, these two major events being the Indonesian curtailment, and also the postponement of OKI taking place. That gives a very favorable condition, of which or for which we have been exploring month by month in Q1 and increasing prices in China, inclusive. When we look at softwood, the situation is different. First looking at the supply side, despite there obviously were not any new projects in the pipeline, we still have not seen accelerated amount of commercial downtimes or planned or permanent downtimes. Numbers are trending still very low. It seems that producers are still keeping decisions in terms of what to do looking forward, despite, again, 40% of them are losing money as we speak.

There were no supply adjustments. On demand side, you had two effects directly hitting softwood. First is fiber to fiber and the successful execution of our plan and other plans as our competitors as well. It's not only an exclusive to Suzano. It's, it's definitely, hardwood has been gaining throughout this year's space that was previously occupied by softwood. Second is the fact that with the softwood chips now available in China since approximately beginning of last year, we have also been observing roughly 1.6, 1.8 million tons of annual softwood now being produced in China, with costs very similar to hardwood pulp costs as well. This obviously occupies space that was previously being supplied by softwood.

The big difference to the model is coming from the softwood side of the equation. Obviously, if we were the only fiber, fundamentals would lead us to keep pushing prices up as per our plan. As we are not the only ones, and softwood keeps declining and approaching our prices, it is obviously a headwind that we have to pay attention, especially if we want to foster the fiber to fiber agenda, which we will foster. Meaning that we have to be cautious and how can I say? And hold the anxiety of trying to make moves that will further compromise or that could further compromise us in the midterm. I'm gonna move to your wood related question.

As we have been mentioning since Suzano Day, on December 11 last year, we at Suzano see that there's enough wood in China to support the new projects upgoing in this country. The upstream verticalization projects. However, the big question mark is the prices of this wood to be able to supply not only the new projects, but also now with a further pressure from the full restart of Chenming's operation and pulp production, obviously integrated, as well. That will keep putting pressure on the market. We have been seeing wood prices going up even before what we see are impacts of the Iran war and logistic costs.

Wood in China, domestic wood has been increasing $10-$20 the bone-dry metric ton, and imported wood has been increasing anywhere from $25-$35, $40 per metric ton. Obviously that puts a pressure and brings their cost structure up, and it is our view that this will be further incentivized as more and more of these projects are, have their go live. It's important to say that when we analyze what's going on today, based on 2024 production, our numbers point out that now producers occupy roughly 15%-18% of the wood basket today available in China.

As I have been saying before, just with the confirmed projects, that would move up to 40-ish % level and with the unconfirmed projects that would move up to almost 80% of the wood basket. Obviously, this analysis does not consider that they are going to import more and more volumes of wood chips as well. All based on 100% China-based wood supply. On the other side of the equation, it's important that other uses, other sectors also use Chinese wood. When we add up the furniture, the packaging and logistics, the forms work or directly linked to constructions segments, these segments traditionally used to use almost 90% of this wood basket available.

We see obviously as a result of the lower real estate market that they now use roughly 70%, that's our number, in terms of this wood basket available. Clearly there's gonna be a shock in the short term, right? As these projects in pulp continue to be deployed. Again, they are at roughly at 20% now, and as they keep increasing, this will put a lot of pressure on this wood supply and dimensionary in China, and we expect that this will keep moving up, and then obviously their cash costs will keep moving up consequently as well.

Thank you very much, Leo.

Our next question comes from Caio Ribeiro with Bank of America.

All right. Good morning, everyone. Thank you for the opportunity. I have another question on the pulp market, which is a little bit more longer-term structural in nature, touching on some of the topics that you mentioned in your previous response, Leo, maybe to dive a little bit deeper, right? I mean, you mentioned that 40% of the softwood production right now is underwater, clearly, you know, something has got to give there. Looking at the hardwood side of things and downstream side of the market, right, we continue to see potential new hardwood market pulp projects contemplated, other projects already confirmed and being built up even at lower pulp prices, which you can argue that maybe the returns aren't there to justify those projects, they're happening anyway.

Meanwhile, you know, there's integrated capacity additions in China that also keep coming and which generate implications for organic demand growth for market pulp, as Suzano has been flagging, right, in recent presentations. It also hampers downstream pricing power as well in China, right? My question to you is what in your view would be, you know, the main catalyst? I mean, what really needs to change in the market that could alter this trend, right? Reverse this recurring wave of supply additions, both on the market pulp side of things and integrated side of things in China. Secondly, you know, a different topic here, as you look at your operations today, do you see any additional opportunities in your current assets to repurpose some of those assets, right?

To shift diversifying to other grades, perhaps, you know, reducing your exposure to hardwood market pulp that way, and adding products that have, you know, less correlation with drivers for paper grade pulp like dissolving wood pulp, for example. Those would be my two questions. Thank you.

Okay, Caio, thank you for your question. Looking long-term, as we have been presenting, we see a oversupply scenario in the pulp markets, despite a constructive view on the increasing demand for pulp. Obviously, due to the fact that we have a headwind coming from verticalization in Asia, as well as at for the moment, two projects by OKI and Arauco confirmed in the pipeline going forward. These two by themselves already create a scenario of oversupply. As I have mentioned, we see that rebalancing factors can come, as I also have already said, in one of these four dimensions.

First is a recovery of permanent closures, as we had seen three, four, five years ago happening and especially in softwood assets. Again, as we have mentioned, it seems unsustainable that this much percentage of the global production is bleeding as we speak. The returning to previous patterns of permanent closures will be one of the key parts to rebalance the total market. The second is a higher amount of commercial related or unexpected downtimes. We are tracking that weekly. We see that growing over 2025, but still not to the levels of 2023 and 2024.

I, as I have mentioned in one of the previous questions, most of this still is hardwood, believe it or not. We have to see, or it's reasonable to understand that this kind of decisions will have to be seen on softwood assets as well. Third is the time to market of projects. On this more challenging market scenarios, projects and their time to markets which were previously announced can be reviewed, and this is a case that we have seen for OKI-2, and that can happen to other pulp projects, but also to other verticalization projects in China, which are very much concentrated now.

We have a big cycle in the fourth quarter of 2026, but it is very unclear and grayish to say when they are actually going to go live and come to market. Fourth, which was Marcio's question, is the unverticalization trend. This is something that we really believe that's going to happen. There's a huge amount, millions and millions of tons of the industry, which is verticalized pulp into paper packaging. It doesn't make sense. Their production costs are way higher than average historic pulp prices. We really believe that in the Western markets, we are gonna see this wave of de-verticalization happening in the months to come. I hope that Suzano is the one that will be able to confirm the first of this project.

Again, one of the four, two of the four, three of the four or these four factors can add up and change market dynamics to rebalance markets going forward. Again, sorry, you asked about repurposing assets. Yes, we can do that. We're actually doing that as we speak. You know, we have just confirmed, we started the fluff production at our Limeira, São Paulo site. That used to be solely a paper-grade pulp line, and it's now producing fluff pulp, and we could do that in other locations as well, as well as other alternative kind of pulp fibers like unbleached kraft and other grades as well. Yes, it is an alternative, and we're always looking how to tackle this kind of opportunities.

Perfect. That's very clear. Appreciate that, Leo.

Thank you. The Q&A section is over. We would like to hand the floor back to Mr. Alberto Abreu for his final remarks.

Thank you very much for all of you. I actually will take the opportunity of final remarks and to complement a few things on Caio's question to Leo regarding a little bit more about the mid, long-term view. Besides what Leo said, Caio, regarding permanent closing that might happen, shutdowns, even de-integration in the western part of the world, we have to share with you that in moments with the level of volatility that we have on the FX side, also on the geopolitical side, the level of confidence that the management has regarding how resilience and the level of robustness of our business increase. When we look about the mid, long term, besides those things, we also have to consider that consolidation might happen.

Relatively you have to analyze and see who will be prepared, more prepared in the situation like that because that's a natural consequence of a scenario that might happen. We have different scenario. We have optimist, middle and more, let's say, worst case scenario, and we have to be prepared for any one of them. Just to add those comments on the final remarks. Thank you very much for all of you and any question, any further question, the RI team will be fully available. Thank you very much.

The Suzano S.A. first quarter of the 2026 conference call is concluded. The Investor Relations Department is available to answer further questions you may have. Thank you and have a good day.

Ladies and gentlemen, thank you for holding, and welcome to Suzano's conference call to discuss the results for the fourth quarter of 2025. [Operator Instructions] They would be addressed CEO, Mr. Beto Abreu and other executive officers. This call will be presented in English with simultaneous translation to Portuguese. [Operator Instructions] Before proceeding, please be aware that any forward-looking statements are based on the beliefs and assumptions of Suzano's management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur in the future. You should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Suzano and could cause results to differ materially from those expressed in such forward-looking statements. Now I will turn the conference over to Mr. Beto Abreu. Please, you may begin your presentation.

Thank you, and welcome, everyone, for our fourth quarter results call. I would like to cover mainly 3 highlights related to the -- our results in the fourth quarter and also our results for 2025. Let me start highlighting the strong shipment in pulp during the fourth quarter. This is record volumes for Suzano, and it's absolutely related to our supply chain team on the operational excellence side. So flawless execution in our process. So the team here is very glad of what the supply chain team was able to deliver. On the paper business unit, we also had a strong volume. But the point that I would like to highlight here is the continuous improvement of the Pine Bluff operation in U.S. We have been doing a great job over there, learning a lot and showing how our management skills and competence can add value from assets also outside Brazil. We are learning a lot of things that for sure will be used during our K-C operation in the future. On the side of cost, cash costs came absolutely in line with the plan. On the other side, I would like to ask you to pay attention to the DTO -- sorry, the TDO of Suzano, I would consider 2025 as an inflection point. So what we can expect for 2026 and for the coming years is a new trend in terms of TDO, and this is absolutely in line with our agenda of increasing and improving our level of competitiveness. We also saw a strong operational cash flow in the fourth quarter and also free cash flow, even on the lower price, I would say, cycle. And for me, the message here is the level of resilience of our business, resilience and competitiveness. So this is a business that's going to be even stronger in the future in terms of competitiveness to face any kind of business environment. So that's the summary for me for the first quarter, volume, cost and the capacity of the business to generate cash in any kind of business scenario. Having said that, I'd like to hand over to Fabio that will cover the Paper and Packaging business.

Thanks, Beto, and good morning, everyone. Please let's turn to the next page on the presentation. During the fourth quarter of 2025, our Paper and Packaging business unit delivered strong volumes from its operations in Brazil and also in U.S. Favorable seasonality helped to lift volumes in the quarter, while we continue to see paper prices declining in export markets. In U.S., Suzano Packaging continued to be a positive highlight with stable prices quarter-over-quarter and a solid 21% increase year-over-year. During the quarter, we also had our annual maintenance downtimes for both Suzano and Limeira. Despite the outage in Limeira -- during the outage in Limeira, we finalized important upgrades at the mill, which will improve cash cost competitiveness as explained in our last Suzano Day. Looking at our markets in Brazil, print and write demand according to IBA increased by 1% in the first 2 months of the fourth quarter compared to the same period of last year, led by uncoated paper demand due to seasonality. Demand for cut size and coated paper remained relatively stable year-over-year. International markets remained weak with declining demand and oversupply. Latin America demand has been more resilient when compared to the U.S. and Europe, but the region has seen an income of inflows of Asian papers at very low prices. Now looking at paperboard, demand in Brazil grew 2% in the first 2 months of the Q4 compared to the same period of last year, also showing the same improvement versus last quarter. In the U.S. market, according to FP&A data, SBS shipments on the fourth quarter were stable quarter-over-quarter and year-over-year, but production was up 2% with the ramp-up of new capacity. New capacity has put pressure in operating rates, mainly in folding box and foodservice market segments, while liquid packaging board remains more insulated. Looking now at EBITDA performance, the 10% increase over Q4 was driven by the ongoing turnaround of Suzano Packaging, which delivered improved EBITDA quarter-over-quarter and year-over-year. Our EBITDA from our Brazilian operations took a hit from lower prices and FX despite higher volumes in the quarter on a year-over-year and quarter-over-quarter basis. The maintenance downtimes performed at Suzano and Limeira mills were on time and on budget, but also had an impact on our costs. Looking ahead to Suzano's Paper and Packaging business performance, sales volumes from our Brazil and U.S. operations will be lower in Q1 compared to last quarter, following the normal seasonality of the period. We also expect prices to improve with the phased implementation of the price increases we have announced in Brazil and export markets. Price for Suzano package should remain stable in dollars since the majority of our volumes are under contracts with pre-agreed prices. On the cost performance, since there are no planned downtimes in Q1, we expect an improvement in our cash cost in our Brazilian operations. For Suzano Packaging, we continue to work to reduce our cash cost, but we could see some pressure in Q1 due to the winter conditions in the region and much higher natural gas prices than expected. As a final note, I would like to share that in January, we made the decision to cease our paper operations at our Rio Verde mill. This small site was our only nonintegrated mill and was producing around 50,000 tonnes of paper annually. This mill had the highest cash cost in our asset portfolio. And with this closure, we expect a positive impact to our 2026 results by reallocating its products to the more competitive Suzano and Limeira mills and adjusting our commercial strategy. Now I'll hand it over to Leo, who will present our pulp business results.

Thanks, Fabio, and good morning, everyone. Let's now turn to our pulp business unit, where I'd like to highlight the key developments from the fourth quarter of 2025. This past quarter was marked by price recovery in all markets due mainly to a higher demand of hardwood pulp in China and Asia in general as well as a more pressured cost base for wood in Asia, consequently increasing cash costs of those producers as anticipated in our Investors Day. In China, paper and board production according to SCI, posted a 17% increase in Q4 '25 when compared to Q4 '24, and the full year analysis presents another positive year with 3% growth in paper and board production and with highlights to Ivory Board, which posted 8% growth in tissue with a 6% growth in 2025. This has reflected in a higher demand of pulp, having pulp imports grown 1.7 million tonnes in 2025 according to Chinese custom statistics, of which 1.4 million tonnes of hardwood pulp. Purchases of hardwood pulp have been further incentivized by softwood fiber substitution trend and also by players in the textile markets increasing their purchases of paper-grade pulp, mostly hardwood. Our order intake during the quarter was above expectations, meaning that despite a very strong quarter in terms of invoicing, we are still carrying backlogs of deliveries to markets where we invoice directly out of Brazil, like China, Southeast Asia and the Middle East. Looking at our price performance in Q4 '25, the $538 per tonne that you see on the slide, although higher than previous quarter, is a backward-looking figure. Market prices are already above that level, as you know, but our reported prices in Q4 was impacted by invoicing backlogs. All incoming orders during the quarter and in all regions in the world were captured at a higher price set point, fully aligned with our price increase announcements with a strong month after month order intake, a trend that is still ongoing. We sold record volumes in Q4 and above our production output during the period, meaning year-end inventories or bringing year-end inventories to very low levels and placing pressure on our logistics operations as inventories fell below optimum operational levels. Looking at the right side of the slide, the BRL 4.8 billion in EBITDA, up 8% quarter-over-quarter was supported by higher volumes and better prices in U.S. dollar terms. Now looking forward, I would like to highlight the following points. In China, following a strong production pace of paper and board producers in Q4 '25, January has posted upbeat figures according to SCI, even slightly above the strongest production month in 2025, which was December and 27% higher when compared to January '25. Importantly, this increase has not led to paper inventories build up at paper producers compared to the past month's levels. And just to connect that to pulp demand, as an example, these figures translate into an additional consumption of 250,000 tonnes of pulp compared to Jan '25 just for Chinese tissue producers. Also in January, order intake from our customers continued quite strong with full implementation of the announced price increase. Our announced price increase were also implemented in all Western markets. As the year began, news on the supply side of the equation have positively affected short and midterm price perspectives. First, news about the Indonesian government revoking forestry permits covering an area of over 1 million hectares, including plantations for industrial users such as pulp and paper on top of the 500,000 hectares that had that permit revoked during 2025. This brings 2 tailwinds to pulp markets as Indonesia currently produces over 4.5 million tonnes of market hardwood pulp, of which 3.5 million tonnes are exported to China. One of them is that a key pulp producer has promptly announced an immediate and unexpected curtailment of 150,000 tonnes of market pulp for February and March combined. Another is that according to our market intelligence analysis, Indonesians are likely intensifying their wood chip purchases mostly from Vietnam, placing upward pressure on wood chip prices. This would affect not only Indonesian costs, but also Chinese and Japanese pulp producers who are major offtakers of Vietnamese wood chips. Even before the developments in Indonesia, we had been observing rising imported wood chip prices into China, which, as I have shared in our last Investor Day, represents roughly 50% of the wood furnace for Chinese pulp and paper industry. Separately from that and very important, APP has announced the delay of the OQ 2 project start-up from early Q2 to mid-Q4 2026. As this was the only market pulp capacity addition considered for 2026, now no incremental market pulp capacity is expected to reach markets this year. The addition of positive paper production figures in China with their gradual price increases in Tissue and Ivory board grades added to unforeseen news on the supply side of the equation, results in a positive short-term dynamic for hardwood pulp, way better than we had expected for the beginning of the year. We don't believe that this trend is short-lived, and we expect that it should continue post February. For Suzano, Q1 and Q2 '26 concentrate most of our planned maintenance downtime program for the year, as you saw on our previous earnings release. Therefore, we now need to ensure the proper inventory buildup in Q1 after the record Q4 '25 invoicing performance, focused on recovering our global inventories to optimum operational levels, which will reflect in improved logistics efficiency and also service levels to our customers. We also need to especially prepare our inventories for Q2 when our planned maintenance downtimes will peak, resulting in almost 300,000 tonnes of lower output compared to Q2 '25 according to our production plan. This requires ensuring that our inventories are strategically positioned to serve contracted customers in line with their agreed inventory policies. As a consequence, we have lower pulp availability to be sold to customers who purchase directly out of Brazilian ports, such as China, Asia markets, Middle East and Africa, meaning that our volumes will remain constrained in the coming months and with 0 allocation to spot markets and customers. To finish my presentation, I would also like to call your attention to the fact that despite price increase implementations during recent months and taking the latest China PIX indexes as a reference, just yesterday night, updates from Hawkins Wright presents that an equivalent to approximately 7 million tonnes of bleached chemical pulp are currently loss-making, and this is still clearly unsustainable. With that said, I would now like to invite Aires to address our cash cost performance during the past quarter.

Thank you, Leo. Good morning, everyone, and move to the cash cost slide. We closed the fourth quarter confirming the cost path we had anticipated at the beginning of last year, reaching the lowest level of 2025 with a cash cost of BRL 778 per tonne. Compared with the third quarter '25, the 3% reduction was mainly driven by lower input costs, supported by stronger operational stability across our mills and by lower prices for key energy and chemical items such as natural gas and caustic soda. Fixed costs also declined driven by lower labor costs, while wood costs benefited from a shorter average radius and better wood quality, which in turn reduced the specific consumption in the pulp production. In addition, higher energy export volumes and more appreciated FX contributed positively to cash cost performance in the period. Fourth quarter '25 marks our best cash cost performance since 2021 with the lowest nominal level since fourth quarter '21 and even better performance in real terms as it represents the lowest level since first quarter '21. For 2026, we expect the average cash production cost of pulp to be broadly in line with the fourth quarter '25. The partner should mirror 2025, meaning a more pressure first quarter versus fourth quarter '25 due to planned maintenance and nonrecurring events such as 2 turbines overhaul, followed by a gradual decline in cash cost over the course of the year. Moving on to the next slide. As I recently shared with you at our latest Investor Day, Suzano is implementing a comprehensive multiyear program to improve its competitiveness with a clear focus on reducing what we call total operation disbursement or TOD. As you can see on the slide, the 2025 TOD reached BRL 2,060 per tonne, improving on year-over-year base and reinforcing the downward trend toward our 2025 guidance also shared with the market at our Investor last December -- Investor Day last December. Now I turn the floor over to Marcos, who will continue the presentation.

Thank you, Aires, and good morning, everyone. Moving to the next slide, I will start commenting about the positive free cash flow generation of $400 million in 4Q 2025. even in a scenario of pressured pulp prices. This cash flow generation contributed to reduce our net debt to $12.6 billion by the end of 2025. And as a result, our leverage in dollar terms declined to 3.2x. On liability management, I would like to emphasize that last week, we renewed our revolving credit facility with 20 banks. And the result of that was that we upsized the line from $1.3 billion to $1.8 billion, and we were also able to reduce the cost of this new line. Moving to the next slide. I would like to highlight our financial discipline by 3 key metrics. First, we delivered our 2025 CapEx in line with our guidance. Second, we are reducing our 2026 CapEx guidance by nearly 20% year-on-year. And third, we are maintaining a very healthy portfolio of FX hedges. By December 2025, we had a $6.2 billion portfolio with an interval of BRL 5.83 to BRL 6.73 per dollar. So as reported in this big orange box, the expected cash adjustments for our zero-cost collars portfolio, if the FX remains at BRL 5.50, which was the level at the closing of 2025, we would receive positive cash adjustments of BRL 2.7 billion. If BRL remains at BRL 5.20, for example, which was close to the level of yesterday's closing, our adjustment would surpass BRL 4 billion in the upcoming 24 months. Now moving to the last slide. I'd like to update you with our shareholder remuneration program. Last week, we paid BRL 1.4 billion in dividends, which equates to more than 2% of dividend yield. We also concluded our fifth buyback program on February 9, in which we acquired 15 million shares. And we announced yesterday a new buyback program to acquire up to 40 million shares in the upcoming 18 months. Now I would like to turn it over to Beto for his final remarks.

Thank you, Marcos. As we just hear, I think a couple of things to clarify when we look ahead. From Leo's presentation, what we saw is a more constrictive business environment for 2026, and this was related to clear and concrete events that somehow has changed the supply and demand balance. On the cash, Aires also had a chance to share the level of ambition that he has for the cash cost during 2026. We also expect the same level of trend when we look for the TOD. We still see opportunities on the sustaining CapEx and also on this logistic infrastructure and cost. And this will also allow us to keep reducing our net debt in line with our deleverage objective for the business. And I also would like to highlight that our JV with K-C is progressing absolutely as planned for closing in mid-2026. The level of liquidity that we have today is also considering the payment in the third quarter for our JV. So having said that, I will hand over to the group to hear all the questions for the Q&A. Thank you very much.

[Operator Instructions] Our first question is from Mr. Rodolfo Angele from JPMorgan.

I have 2 questions for you. First, I think the main discussions with investors have been on what Leo has discussed in his remarks. So I just wanted to dig a little bit deeper on that front. Aside from all the topics that you mentioned, Leo, can you talk a little bit more about what do you see in China? You mentioned that paper demand is strong, but I would like to hear a bit more what do you see on the pulp side? Any updates, any change in the trend that we were seeing of increased production out of China? Any risks to the numbers that you presented on the Investor Day of close to 6 million tonnes of distance. So that's my first question. And my second question is to Marcos. I think the message from Beto was very clear on the trends on the cost side. But I wanted to hear from you a little bit on CapEx, especially if we look ahead, not for this year, but the trends, especially into '27. We believe there is a case for lowering CapEx through time. We don't need a hard number, but if you could comment on at least the trend, that would be great.

Rodolfo, thank you for your question. This is Leo here answering regarding pulp. And just to review, right, in our Investors Day, we give a 5-year road map of what we're seeing in terms of further verticalization or upstream verticalization in China despite not disclosing the year-over-year numbers. But I will do that here for 2025 and 2026, just to make my answer clear. In 2025, all our very detailed mapping of upstream verticalization in China pointed out to roughly 2 million tonnes of new pulp capacity coming to market. And that 2 million tonnes were almost all, if not all, compensated by lower operating rates of the mills at the beginning, plus the Chenming effect, negative effect when you compare their shutdown in '25 compared to '24 and also to the fact that several integrated pulp-to-paper players and buyers have swapped hardwood pulp volumes especially in Q3 when pulp prices reached the minimum. So we saw a net zero effect of verticalization in 2025. And that explains why we see a very positive imports of hardwood and growth of over 1.7 million tonnes or 1.4 million tonnes, sorry, into China, as I mentioned in my opening speech. For 2026, we have mapped closely a new addition of upstream verticalization. The number is a bit even bigger than in 2025. It's roughly 2.8 million to 3 million tonnes of capacity. But different than last year, all of these projects with an exception of one are starting or supposed to start in Q4 2026 and one starts in Q3 2026. So we should see no effect of that in the beginning of the year, maybe in the end of -- very most end of 2026, if nothing is delayed. So that's very much concentrated in the latest part of the year. That's why we see even stronger fundamentals for the short-term dynamics in hardwood.

Rodolfo, thank you for your question regarding CapEx. Yes, there are a lot of moving parts on CapEx, including inflation for sure. But we see a couple of nonrecurring items that we will have to pay on our CapEx in 2026. To give you a couple of examples, first, we are -- we have our SAP upgrading version. We also have the Pangea Deal that we did, which was the wood swap with Eldorado, which had a payment in the first quarter of 2026. We even had an additional investment at Cerrado regarding the bonus for the productivity that we had over the initial 12 months of the project. And we also had a spillover payments from a couple of industrial projects that we concluded in the second half of 2025. So considering all of those nonrecurring items, let's say, there is room for us to see a lower number on CapEx, but I would not like to give you that as a guidance, okay?

Our next question is from Mr. Caio Ribeiro from Bank of America.

So my first question is on buyback execution, right? I'm just wondering if you could talk a little bit about the mentality and the process that goes behind deciding whether to execute the buyback or not, particularly as you look at the previous program execution versus the new one that was announced. Looking at the past program, I'm wondering if the M&A transactions that were announced by the company impacted the magnitude or pace of execution of the buyback program. And going forward, as the company focuses on absorbing those assets acquired and assuming that no more M&A is carried out, does it make sense to execute a higher portion of the new buyback program or fully executed? And then my second question is on potential divestments, I just wanted to see if you could share a little bit more color on how this divestment lever could be used to accelerate the deleveraging progress of the company? What assets you could consider as potential divestments and what the timing would be? And if there is a targeted leverage level for the company?

Okay. Caio, remember that at our Suzano Day, we mentioned that we have an ambition to reduce our net debt to $11 billion, okay? That's the most important priority here for the company. So connecting your question on the buybacks, the focus of the company remains on deleveraging its balance sheet. But we try to be very opportunistic on our buyback program. There are a lot of variables that we look when we are doing the buybacks or when we are more active on the buybacks, including leverage, but also our view for the share price, our views for pulp price outlook in the short term, our view for the currency outlook as well. So there are a lot of variables that we consider, and we try to be as opportunistic as possible in order to create value for shareholders. Regarding divestments, as we mentioned also in the Suzano Day, this is a very small portion of the free cash flow expectations for 2026. This is just like a changing mentality for the company, looking for opportunities that are not core business for the company and eventually divesting. The most -- the opportunities that we see are mainly on the forestry business in which we could do the high best use of the land. Sometimes we're using a land for our forestry plantations, but that land is probably more valued for other crops or for other businesses, and we could eventually transform that into cash by converting that land into other businesses. So I would say that this is the most likely event that we will see in terms of divestments. And this, as I mentioned, is not a relevant portion of our free cash flow generation expectations for 2026.

Caio, I just want to complement what Marcos just said. The deleverage plan for the company, it's not related to any divestment. The deleverage will come from the operational side. That's our plan here. If there's any specific opportunity in terms of generating value for the shareholder with a specific assets, this is something that we will consider.

Our next question is from Mr. Marcio Farid from Goldman Sachs.

Two questions on my side. Maybe the first one to Leo. Leo, very clear message on the pulp markets. Maybe the missing link there is paper prices in China, which have either been under historical lows or have not performed as good as pulp. So maybe the question is, does it matter at all, right? Obviously, the upstream and downstream markets have their own supply-demand dynamics. They tend to correlate to each other. But does it matter that paper prices are not moving? Are you confident that they are going to be moving? Does it matter at all for the pulp price direction from here? And how do you see the relationship between hardwood and softwood at this point because the gap has narrowed quite significantly with hardwood performing a lot better, right? Just trying to understand those 2 topics also important to try and build the pulp mill as well. And secondly, to Fabio. Fabio, obviously, great momentum on the U.S. Packaging side. And obviously, internally, it seems that you are progressing quite well in terms of operational efficiency and also renegotiating some of the contracts with suppliers and clients as well. We look at your global peers and especially the major -- the largest ones in Europe and the U.S. And after earnings quarter, they pointed to quite negative outlook on -- especially on demand side as well in the case of Europe with competition with imports. So just trying to understand how do we make that up? I mean, can you perform well in this current market environment? If you have any comment in terms of what you're seeing for your specific products in the U.S., obviously, a more protected region as well. So if you can comment a little bit on the broader market view as well and the progress around U.S. packaging business, that would be great.

Marcio, thank you for your question on the pulp side and how that correlates to paper prices in China as well as softwood. First part of the question, we see -- obviously, the main line that drives our business is tissue, and we see quite on average margins as we speak. We saw the beginning of a price recovery for those grades, but we track that with the current fiber mix that they're using. And obviously, as they are also focusing on this fiber transitioning agenda, moving a bigger part of their purchases to hardwood that also helps offset their cost structure. And in most cases and in several times of the cycle or in most times of the cycles, we see pulp prices pushing paper prices and not the other way around. So Obviously, the margins and the prices of paper in China are one of the factors that we use in our decision-making process, but not the only one that we use to decide what we're going to do. And also just in line with that we have been supportive in a way. Our last price moves were at a lower range, let's say, closer to $20 a month price increases with time, and that has obviously also the objective to give time to our paper customers to adjust their prices in market. But again, that's not the only variable that we take into consideration. Your question on the hardwood-softwood gap. Obviously, everyone noticed that we were trending at above $200 in China. Now this number is closer to $100 in other regions in the world is over $100, but I use the $100 as a reference. As we have more and more customers engaging with the fiber-to-fiber agenda and understanding how to better blend and use hardwood pulp, I think that what we see today is paper producers everywhere in the world having a lot of pressure in their margins, and everyone will try to capture margin despite the gap is $170, $150 or $200. The agenda is of a much bigger knowledge in terms of how to utilize hardwood. And I believe that this trend is not stopping despite if the gap is lower or higher.

Marcio, this is Fabio. Thank you for your question. I will address your question about packaging market. You're right. Global packaging market is undergoing a major challenge with lots of oversupply in most of the grades of packaging papers and also some weak demand, especially in Europe. In the U.S., I don't think demand is the main issue here. What's happening, the market is kind of insulated with the tariffs. What's happened is that we have a new capacity that come to market this year and also last year. And this is causing some imbalance in the supply and demand curve and the operating rates for SBS has gone down. So when you look at the major results for the players that have announced their results, there's some concerns about this imbalance and impact on prices. But this has happened mainly on the open market for SBS, which is Folding Box Board and also food service market. We are kind of insulated from that. You know that our production here at Suzano Packaging, 80%, 85% of that goes into liquid packaging in a market which we have a very large market share. And we are -- we have a 2- to 3-year contract with our major customers. In that 80% to 85% of our exposure, we are protected. Demand is quite stable. Our prices are covered and protected under our contract. And on the 15%, 20% that we sell to the market, that's the type of pressure that we feel momentaneously from the market. But we're confident that there's still some costs that we can take out of our operation here and the resilience of the liquid packaging market in 80% of our business is going to help us to survive well during these tough market conditions here. The U.S. markets have adjusted themselves in terms of supply and demand imbalances, and we have started to see some capacity closures as well. So I expect operating rates to come back to normal in the near future.

Our next question is from Mr. Daniel Sasson from Itau BBA.

Congrats on the results. My first question is related to the cost front. Aires, you mentioned that you do want to have a better performance on average in 2026 versus 2025, but you're already running at 5% below the average of 2025 in the 4Q. I know it's not a straight line, but if you could compare your current performance at the margin with your total disbursement operation guidance or maybe let us quantify a little bit the sort of improvement that you expect in 2026, if the 4Q '25 is a good proxy. I think that would help us think about the evolution from now until your guidance in 2027. And my second question, Leo, it was great to hear you say that the order intakes that you've received so far this year have had prices above the average of the 4Q for all regions. But can you please comment a little bit if you're seeing any changes at the margin over the past few weeks, maybe? My question is more related to the decline in resale prices that we've seen or the fact that you guys are trying to increase prices by $10 per tonne this time around and not by $20 per tonne as you had been doing since the end of last year. I mean, are you seeing any weakness or signs at all? And if you could comment a little bit about the current wood price or wood cost for Chinese producers in China, the domestic wood and the import wood chips mainly from Vietnam, which have also shown a slight decline in prices or in that case, cost for Chinese producers, that would be great.

Daniel, thanks for your question. As I mentioned, we intend to work on average of 2026 roughly in the level that we operate in the fourth quarter 2025 when we closed BRL 778 per tonne. If you consider our average in the year 2025 of BRL 817 per tonne, it's close to what you said 5% in reduction. But of course, we have a challenge in the first 2 quarters, especially because our stoppage that we have scheduled. In the first quarter, we have Imperatriz, [indiscernible], Veracel, and Aracruz Linha A that put a lot of pressure in our cost, especially because of Ribas performance that will bring our cost below. And in the second quarter, we have Tres Lagoas, 2 lines that put pressure in the same way. Then our trend is a proxy of we have last year when we start the first quarter with a higher probably cash cost when we compare with the fourth quarter, but a trend to reduce in the coming quarters, close the effort in the same level that we achieved in the fourth quarter of 2025.

Okay. Good. Daniel, this is Leo here. I'm going to answer the several questions on pulp together. First, just to rephrase, I mentioned that our order intake in Q4, all months of Q4 had prices higher than our Q4 delivered and invoiced prices. And obviously, January follows the same trend. So even what we were able to capture month-over-month in Q4 had price at points higher than the $538 price that you saw in our release. In terms of how we are seeing the margin or the market going forward, already talking a bit about February. As I mentioned, January is quite strong. We see no changes at all. We -- despite this calendar of the Chinese New Year, where our customers will be leaving for holidays on this weekend and probably returning closer to Feb 23, 24. Prior to leaving all of our customers have confirmed purchasing intentions or numbers. We are just finalizing the details and most will be finalized indeed after the Chinese New Year. We didn't see absolutely no customer in China and in Asia skipping their purchases or what they expect to purchase in February, meaning that we see no changes in this habit or pattern that we have been observing for the last several months. Our decision of not pushing a higher price increase in February was much more related to the calendar of the month because as most of negotiations will be concluded in a very short time period due to the return of the holidays, we didn't want to be opening any spread of negotiation with customers. So our increase of February is unnegotiable. We will implement it at all costs. Resale, your question on resale, we believe that this should react post Chinese New Year. Today is trending roughly $10 to $15 below the imported PIX prices references. And our certainty comes to the fact that we also, as I have mentioned in previous calls, we also are always tracking and selling in our customer portfolio in China, integrated pulp and paper producers and also traders who are big markers of price in the resale market. And I can confirm to you today that already all major traders in China have purchased volumes at higher set points than the resale prices that you see on screen. So we have an expectation that you should -- that we should see some reaction on this index post Chinese New Year. Now on wood costs. Wood costs, we saw on the end of last year, an increase on the wood cost base for China, increasing their cash costs, as we have commented and talked about during Suzano's Investors Day. On the end of the year and early '26, we saw different movements. We saw imported wood chip prices increasing at a range of 12% to 15%, while Chinese wood falling at a range of 10% to 12%. And if you consider that the Chinese industry uses half-half imported and local, I would say that today, our view is that these wood costs are quite stable to what we had on the end of last year, the higher cost basis that we saw at the end of last year, imported wood compensating the -- a bit lower cost of Chinese wood. This precedes all the news on the floods and revocations of licenses in Indonesia. Just to make it clear, Vietnam, which is a major supplier of wood chips to the region, 70% of that wood chip goes to China. roughly 25%, 23% goes to Japan and currently 7% goes to Indonesia. And our market intelligence analysis show that with this latest revocation of lands and we correlate that to the pulp and paper industry, we believe that Indonesia will push for a higher demand that their needs could reach almost 20% of the available wood chips from Vietnam. So you can imagine the pressure that will put on the markets, on the wood chip markets going forward. So our expectation is that especially this imported base will have a higher cost point looking forward.

Our next question is from Mr. Rafael Barcellos from Bradesco BBI.

Congratulations for the results. The first question is just like a follow-up and a wrap-up on these discussions on the pulp market. So Leonardo, sorry, one more question. But just to wrap up everything you have just said during the call, I mean, there was a clear positive tone, particularly when we compare with our last interactions, right? So I just wanted to understand what was the key development that has made you change the tone. I mean if you just -- if you can just like wrap up and just comment, I mean, what was the key development that has made you change the tone? And secondly, Beto, I mean, when we look at the Paper division, there were like 3 important developments in 2025, right? I mean there was the acquisition of K-C, the first positive EBITDA in your paperboard assets in the U.S. and the new Tissue mill in Brazil. So that said, I mean, what do you believe should be the highlights for the division in 2026?

Okay. Good. So Rafael, let me share with you what made us change the tone from our last interactions. First is the intensification of the revoking of forestry licenses in Indonesia. now affecting directly the pulp and paper industry. At the end of last year, when we had summed up almost 500,000 tonnes of hectares with license revoked, we didn't correlate any of that directly to the pulp and paper industry. Now that's not more the case. So that is one major factor happening and already affecting directly one of the key producers and an immediately -- an immediate curtailment of 150,000 tonnes in 2 months only of market pulp and how that can affect all the wood dynamics, as I mentioned in my last answer to Daniel. Second and major change is the delay of OKI from April to the fourth quarter last -- this year. meaning that in terms of pulp coming into market, we should see no new volumes in 2026. This is a major change. It's also important. It's not only that OKI also started or APP also started a board machine -- is expected to start this board machine over 1 million tonnes in Indonesia now in March, meaning that the plan was, as we understand, to be integrated with OKI 2. But now as OKI 2 was delayed, you have a double effect of less market pulp in the market or no additional supply of market pulp in 2026. At the same time, they're going to need to feed up this new machine and our expectation is that they're going to need roughly 350,000 tonnes of pulp in 2026, meaning that their system should be even tighter to run 2026. So I would say that the major changes have been really on the supply side of the equation. And just to sum up and wrap up, this has changed market dynamics completely and on a very fast-moving pace, as I mentioned in my opening speech.

Thank you, Leo. Regarding the questions for 2026, what do we expect from K-C paper business in U.S. and also the tissue after the investment that we made in Aracruz, as you mentioned, on the tissue side, we are expecting to increase the level of return of the business. Firstly, we were able to deliver another project on time and on budget. That was the case of [indiscernible]. She is in Aracruz. And we expect to now in 2026, extract the right level of value that we expect from this investment. So in the end of the day, we expect to have a better ROIC in this business with a lower cash cost and higher volume. On the Pine Bluff business in the U.S., I want to highlight again the great turnaround that the local team were able to implement. We have now a positive EBITDA differently from the asset that we have received it, but we are looking to generate cash with the business. So we still a journey in this process of not only generating positive EBITDA, but of course, generating cash with the business. So that's what we expect for 2026 is to keep moving forward on this direction of having assets that can generate value for the shareholders. On the K-C JV, I think there are 2 main elements that we must consider for 2026. One, of course, is the carve-out is finalized, the carve-out in all countries on time. So that's not a simple process. It's complex, consider the amount of countries that we have. We are on track, but still a lot to do. So finalizing this process on time is absolutely key. So keep working very close the 2 clean teams to make sure that we will deliver this on time. On the other side, we also have the value creation stream. So making sure that we have all the details regarding, let's say, the levers that we must consider in the beginning of this operation to start generating value as soon as we can is also the second priority. So by the way, we are glad on how the both teams are working together in this process. And -- but for 2026, we would like to see value being created in the JV in the beginning and the carve-out being finalized on time. So again, I think the bottom line of everything is what I have been saying this, which is 2026, we must extract value from the investment that we have made in the past.

Our next question is from Ms. Eugenia Cavalheiro from Morgan Stanley.

If possible, I would like to understand better where do you expect the cost reductions in the pulp business to come from? So I mean, you already disclosed a bit the level that you expect for the year, but just to understand what are the levers for that cost reduction?

We gave some drive for this year. We are not hoping for coming years, just in TDO (sic) [ TOD ] that we presented in our last Investor Day. And for this year, our intention is to work in the same level that we closed the fourth quarter 2025, roughly BRL 780 per tonne. That's the idea for the average of 2026.

The Q&A session is over. We would like to hand the floor back to Mr. Beto Abreu for his final remarks.

Thank you very much for everyone. Thank you for the questions. If still any doubt, as you know, our IR team is always available. So thank you very much, and see you in the next quarter call. Bye.

The Suzano S.A. Fourth Quarter of 2025 Conference Call is concluded. The Investor Relations department is available to answer further questions you may have. Thank you, and have a good day.

Ladies and gentlemen, thank you for holding, and welcome to Suzano's conference call to discuss the results for the third quarter of 2025. We would like to inform that all participants will be in a listen-only mode during the presentation that will be addressed by the CEO, Mr. Beto Abreu and other executive officers. This call will be presented in English with simultaneous translation to Portuguese. [Operator Instructions]. Before proceeding, please be aware that any forward-looking statements are based on the beliefs and assumptions of Suzano's management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur in the future. You should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Suzano and could cause results to differ materially from those expressed in such forward-looking statements. Now I will turn the conference over to Mr. Beto Abreu. Please, you may begin your presentation.

Hi, everyone. Thank you for attending our third quarter call results. Let me start with the highlights of the quarter, which most of the figures was quite aligned with what we planned for the quarter. But I'd like to highlight a couple of things. The first one, it's send to the team in Pine Bluff, our congratulation for the process of turning around the business. So as you saw, we have the first positive EBITDA result for the quarter for Pine Bluff, and I think this is the new trend for the business. So the team over there is doing a great job. So we are very glad about what we have achieved at this time. And -- but the most important one here regarding the highlights is the cash cost. So we are glad to having the chance to keep the trend of reducing our cash cost. This is something that we're going to keep working, of course, not only for the next quarter, but also for the next couple of years, so we still see opportunities to keep gaining efficiency to gaining productivity. And this is an area that is under our control, and this will be in the next 2 years, our main focus. So reducing the total operational disbursement, it's absolutely key and will be the first priority for the organization here in the next 2 years. So this is something that is under our control, and we understand that we don't need to expect or to live a different cycle of price to do the job that we have been doing. We must anticipate ourselves to make sure that we bring to the organization any kind of opportunity to give -- to keep efficiency and productivity in our business. The consequence of that, it's, of course, deleveraging the company, which is absolutely a priority for us. So having the chance to deleverage the company even on a low cycle of price, it's something that we believe and that we want to keep doing, and not waiting, do you know, different cycles in terms of price to focus on deleveraging the company. We believe that we can do that even on scenarios as the one that we are living right now, okay? So that's my highlight. That's the main message. So now I will hand over to Fabio that will cover the Paper and Packaging business.

Thanks, Beto. Good morning, everyone. Please let's turn to the next page of the presentation. Our third quarter results were highlighted by strong sales volumes in all markets in our first quarterly positive EBITDA for Suzano Packaging. We have had stable operations in all our mills with lower cash costs versus previous quarter in Brazil and also in the United States, with lack of annual planned shutdowns. Our third quarter volume marks the highest quarterly volume for our Paper and Packaging business unit in history, even faced very challenging paper market conditions. Print and write demand, including imports in the Brazilian market according to IBA, declined by 7% in the first 2 months of the third quarter compared to the same period of last year. However, domestic producers outperformed imports with a more moderate 4% decline and a 29% drop in imported volumes. The overall contraction in demand was primarily driven by the coated paper segment, which had benefited from additional demand during the 2024 election period. Demand for cut size and uncoated papers remained relatively stable. Turning to the international markets served by the company. We see that despite the structural reduction for print and write in mature markets, uncoated paper grades, our main export product performs better than the other grades. On the negative side, there are continued negative effects of economic headwinds and uncertainties related to the ongoing trade war. In Europe, demand has been more sensitive to those trends, reducing 6% on the year-to-date, while in North America and LatAm, demand for uncoated wood-free continue to be stable. Now looking at paperboard demand. In Brazil, we saw a 4% demand decrease in the first 2 months of the Q3 compared to the same period of last year. Sales from domestic producers dropped only 1%, while imports shrunk minus 14% in the same comparison period. In the U.S. market, data from the American Forest and Paper Association show SBS shipments have grown 5.9% on a year-over-year basis, while inventories have grown 17% on the same basis. This is mainly due to the ramp-up of a new SBS machine in the second quarter of the year. Yet, according to FP&A, our operating rate for SBS producers grew 3.4 percentage points versus Q2, reaching 86.5% albeit below historical levels. Looking at Suzano figures, our sales volumes were higher on a quarter-over-quarter and year-over-year basis. Our export volumes in Brazil remained strong in the period. Better sales performance in Brazil quarter-over-quarter reflect demand for uncoated and cut size while on the year-over-year reduction in Brazilian sales is led by the coated paper segment. Suzano packaging volumes recovered from the maintenance outage and increased 7% versus the previous quarter. In terms of pricing, prices from sales in Brazil reduced 2% on a quarter-over-quarter due to seasonality and product mix, but were 2% higher on a year-over-year basis. Prices on other external markets suffered by our Brazilian operations, reduced 6% quarter-over-quarter and 10% year-over-year, reflecting challenging market conditions across all regions as well as FX effects. Prices in dollars for Suzano packaging grew 2% quarter-over-quarter, reducing 1% in reais due to FX effects. Our EBITDA has reached BRL 542 million in the quarter, an 11% increase quarter-over-quarter and a 10% decrease year-over-year. On a quarter-over-quarter basis, we have had improvements in our cash costs in Brazil and also in the U.S., higher sales volumes and on the down side, lower prices in our export markets and unfavorable exchange rate. On a year-over-year basis, the decrease in EBITDA is mainly due to lower export prices and exchange rate. This is our first positive quarterly EBITDA for Suzano packaging. Looking ahead to Suzano's Paper and Packaging business performance, we have planned maintenance outages in Limeira and Suzano mills in Q4, which would have an impact on costs. During the Limeira outage, we will finalize the implementation of a series of improvements at the mill, which will upgrade the site's sustainability attributes and reduce its pulp and paper cash costs moving forward. Ex outage, we expect costs to be stable in the next quarter for all our paper operations and sales volumes should increase in line with the historical seasonality for the period. We expect a stable sales prices in Q4 and better regional mix due to higher sales volume in the Brazilian domestic market. Suzano Packaging EBITDA will continue to improve in Q4 and beyond. Now I'll hand over to Leo, who will be presenting our pulp business results.

Thanks, Fabio, and good morning, everyone. Let's now turn to our pulp business unit, where I'd like to share some highlights for the third quarter. The early July announcement of potential 50% tariffs from Brazilian pulp exports to the U.S., which could compromise the midterm continuity of pulp flows into this market and its customers introduced an unprecedented short-term turbulence in the market. This uncertainty affected logistics streams and reduced visibility for market participants regarding near-term dynamics, which contributed to a deterioration in sentiment and triggering a further drop in pulp prices in China to sub-500 levels. Prices in Europe and North America follow the same downward price trend with the usual lag. As the quarter evolved, when Brazilian pulp was included in the U.S. exemption list, the restored tariff-free access allowed operations to stabilize and ease commercial risk. It's worth noting that although the potential new U.S. tariffs on Brazilian pulp would likely be neutralized over the medium term given the tendency of global pulp markets to rebalance through interconnected trade flows, the initial reaction from pulp and paper participants underscored market sensitivity to trade policy signals. As usual, in pulp cycles, the sub-500 price point triggered a strong buying activity from Chinese customers, including integrated paper producers who also secured significant pulp volumes during the quarter. Our order intake levels in China were abnormally high throughout the quarter, generating backlogs of deliveries, which persist to this day as our sales to the other regions in the world were executed as previously planned for the quarter. We have effectively sold all our production volumes during Q3, keeping our inventory stable in line with our commercial strategy. Our invoice volumes were, however, impacted by our announced production curtailment, which started in July in the last 12 months. We have announced 3 rounds of price increases for all markets starting August, which are being implemented as we speak, but still not yet reflected in our third quarter's invoiced prices due to the carryover effect on our higher-than-usual backlog, as well as the lagging effect in Europe and North America. Looking to the right side of the slide, despite strong volumes, a combination of lower prices in U.S. dollar terms and a less favorable FX resulted in a BRL 4.5 billion EBITDA for our pulp business unit, equivalent to 49% EBITDA margin. Now looking forward, I would like to highlight the following points. In China, following our strong sales performance in the previous quarter, October order intake also reached high levels with all of our customers confirming purchases with a new $10 price hike, including integrated paper producers who keep buying market pulp. As these orders were received or closed in the last days of October, you probably saw that, that's already reflected on today's index publication. Since September, paper and board production in China has continued to grow, driven by seasonally higher demand during this time of the year and supported by exports of coated paper, tissue and carton board that exceeded levels seen in the same period of 2024. In China, price increases were announced by paper and paperboard producers for November across most grades. Although this is still in the process of being implemented, these moves may indicate a turning point in paper pricing dynamics. Still on the outlook for paper pricing and pulp demand, September brought yet another shift for Chinese producers. Stricter regulations on imported recycled grades, which represent over 3 million tons of furnishing to this market, prompted domestic pulp producers to fill the gap using unbleached BCTMP and other mechanical pulp grades made from local hardwood, which has consequently driven up demand for local wood. In addition, wood chip demand in China is being fueled by the ramp-up of new integrated capacities launched since late 2024 as well as the restart of some of Chenming's operations. Despite uncertainties around local wood prices and its full market impact, these developments are expected to intensify demand in the coming months and further pressure wood chip prices. We continue to monitor wood cost dynamics in the region as rising demand for Chinese wood chips also supported by tighter recycled fiber imports points to a more favorable paper pricing environment and higher cash costs for Chinese market pulp and integrated paper producers. All considered, we expect that pulp prices will continue to move up from the current levels. During the next months, we will seek the implementation of the remaining part of our price increase announcement, meaning $20 on a net basis, which were still not implemented. Volume-wise, as we progress through the fourth quarter, we continue to allocate our targeted volumes across all regions with full confidence in closing 2025 as planned. On the supply side of the equation, it's important to notice that hardwood pulp prices have remained below the estimated cash cost of roughly $600 per ton for 13 consecutive months. According to a leading consultancy in our sector, over 15% of global hardwood market pulp production today is operating underwater, and softwood pulp producers are facing an even greater pressure. Zooming into Europe, producers have now enjoyed 1 year below breakeven levels considered their regional sales only, and we estimate that more than 25% of European capacity is currently unprofitable, all based on local delivery costs and the European price index net of rebates. As I have stated in multiple occasions, I view this scenario as completely unsustainable and believe that more significant supply side adjustments are likely to take place going forward. Still on the supply side, just this week, a major Brazilian competitor has announced further capacity swings to dissolving pulp, taking approximately 600,000 tons of paper grid pulp out of the market in '26 when compared to 2025, which should improve the S&D fundamentals for the upcoming months. With that said, I would now like to invite Aires to address our cash cost performance for the past quarter.

Okay, Leo. Thank you very much. Moving to next slide. The cash costs, excluding downtime in the third quarter came in at BRL 801 per ton, making a 4% decrease compared to the second quarter. The most significant driver of this reduction was the lower cost, the lower wood cost mainly due to improved wood quality, resulting in a lower specific consumption and operational efficiencies in harvesting and logistics. Additional contributing factors included lower consumption and price of key inputs such as caustic soda, chlorine dioxide and lime, reduced energy costs, especially for natural gas, driven by the decline in the Brent price and FX appreciation, which lowered the cost of dollar-denominated foods in local currency. When we compare to our cash cost to the third quarter in '24, the cash cost decreased 7%, reflecting gains from operational efficiencies, input cost reductions and scale. The key highlight was the broad contribution of Ribas units, which supported improvements across all cash cost components. The highlights of improved performance were wood costs, which saw the most significant reduction driven by shorter average ratios, better performance on the field and a lower diesel price, which scale gains also helping dilute indirect costs and lower input consumption, especially caustic soda and fuel oil, supported by operational improvements and fuel to gas conversion in the lime kilns at the Ribas and Imperatriz mills. Looking ahead, we are pleased to share that the cash cost production ex downtime, is already running below the BRL 800 per ton mark. This solid performance give us confidence that we will deliver in the fourth quarter '24-'25. The most competitive quarterly cash cost of the year, while also supporting a full year average close to the level recorded in fourth quarter '24. Now I hand over to Marcos to continue the presentation.

Thank you, Aires. Good morning, everyone. So I'll start with the leverage. Our leverage in dollar terms ticked up to 3.3x. Despite our net debt remained stable in the quarter, our EBITDA last 12 months declined mainly because of lower pulp prices. In terms of our net debt, as I mentioned, it remained stable on a quarter-on-quarter basis, and I would like to highlight that we continue to generate positive free cash flow throughout the quarter, and that we saw some nonrecurring events impacting our liquidity and leverage in the quarter, namely the wood deal that we did with Eldorado and also the premium we paid for the repurchase of the bonds of 2026 and 2027. These events totaled close to BRL 1 billion. In terms of liability management, we did a lot of different transactions with a highlight of the issuance in September of $1 billion new 10-year bond for Suzano issued at the lowest corporate spread ever for the company, and we also repurchased the bonds maturing in the short term, 2026 and 2027. The result of that is that we were able to reduce our short-term maturity risk, and we also were able to increase our average terms of our debt from 74 months to 80 months without changing the average cost of our debt, which remains stable at 5%. Moving to Slide #8. We highlight the healthy hedge portfolio that we have at this point with a put option of BRL 564 and a call option above BRL 650. Our total portfolio is at $6 billion. And if we were to -- if the BRL remains stable at BRL 532, which was the level of the closing of the third quarter, we would have a positive cash impact of nearly BRL 2.5 billion in the upcoming 2 years, including the fourth quarter, with the impact of positive BRL 800 million in 2026. Moving to the next Slide #9. We would like to reinforce our guidance for CapEx for 2025 at BRL 13.3 billion, which implies a CapEx of BRL 2.9 billion in the last quarter of the year. Now I would like to hand over to Beto for his final remarks.

Thank you very much, Marcos. A couple of things that we understand that it's absolutely key to send as a final message regarding the next couple of quarters. So looking ahead, as I said, we will keep focusing the whole team in the cash production cost, not only for the fourth quarter, but we understand that, that must be attendance in the way that we manage the business, and this is dealing with something that we control to be prepared for any kind of scenario in the long term. So that's the first thing. The second one is that we have a couple of investments that we made in the last, mainly a couple of 2 years. As I mentioned, Suzano Packaging. There's a new tissue mill in Aracruz that just start up and also keep working in the progress to the closing of the JV with K-C. So this is an investment that we have made that we must keep working to gradually improve performance in packaging, in Aracruz, but make sure that we will extract the values and the efficiency that we mentioned when we signed a JV with K-C. So having said that, the focus is extracting value from the investment that we have made already and not putting other initiatives on the table. So how to summarize this is, focus on what we control. We keep reducing cash cost and also making sure that we will extract the value from the investment that we have been making. Having said that, I will open for the questions.

[Operator Instructions] Our first question comes from Caio Ribeiro with Bank of America.

So I wanted to dive into a little bit more detail on your view on the dynamics of wood chips and softwood in the Chinese market specifically. So first of all, I wanted to ask you if you've noted any meaningful changes in terms of the prices of domestic wood chips in China as a result of all of the supply additions that we've been seeing coming from Huatai, Nine Dragons, and in particular, Chenming's announced resumption, right? And whether that has had any meaningful impact in your perception on the marginal cost of production of pulp in China? And then secondly, in terms of softwood, right, clearly, the dynamics for that fiber have been weaker in comparison to hardwood with prices dropping, while hardwood has been on a recovery track. And our perception is that this has largely to do with an abundance of this type of fiber, right, softwood in Chinese markets as a result of higher domestic production. So I wanted to ask whether you've seen any meaningful changes there in terms of domestic producers in China perhaps reducing softwood output as a result of the recent drop in softwood prices, and whether that incentive from customers to switch from softwood into hardwood is still present, or if there have been any changes there given that reduction in the spread between both fibers?

Caio, this is Leo here. Thank you for your questions. Regarding wood chips, yes, we have seen an uptick in the prices, not only of the Chinese wood chips, but also of imported wood chips in this last 2, 3 months. Imported wood chips on a BDMT basis have increased almost $10, which would generate roughly an effect of $20 in the cash cost of bleached hardwood production, while Chinese wood chip prices as per our monitoring has increased from $25 and in some cases, $40, and that's always a double effect, approximately on the cash cost of production. So your assumption is aligned with ours that yes, this will create an effect in an increasing cash cost of Chinese producers, both of market pulp and also integrated paper and packaging producers, which we are seeing that are now and more intensely pushing for paper price increases. I believe obviously, this is a consequence of higher costs in their season, and that should support the S&D fundamentals for hardwood for the upcoming months. Regarding softwood, yes, indeed, it's weaker. It seems to be trending in the opposite direction than hardwood for the past months, especially in China. I think there are 2 effects. First is the availability of the unforeseen softwood chips at a very competitive price, in some cases, at the same price as hardwood chips since the beginning of this year due to the infected wood and the policy to try to cut and use this wood as soon as possible. We believe that this wood will last more 2 to 3 quarters in the market. And that is putting pressure on softwood both by some integrated players, now producing softwood in their system, and they used to buy it, but also having less -- putting -- leaving less space for softwood pulp. And the second factor, which I would like to call your attention is the fiber-to-fiber movement. Obviously, even with the gap that has reduced from over $200 to roughly $150, $160, it's a huge incentive still for fiber substitution. We see a lot of traction, a lot of action in China, many, many customers interested in seeking our support in this journey. So in terms of how can they be less and less dependent on softwood and more and more dependent on hardwood fibers like ours. So I think it's a double effect that is making the scenario for software producers a bit worse than what we see in hardwood today.

Our next question comes from Daniel Sasson with Itau BBA.

My first question goes to Aires. Aires, if you could comment a little bit about your cash costs. You mentioned that you're running already below BRL 800 per tonne in the fourth quarter. But considering the deal you announced with Eldorado that -- and the TOD and that you are not that far from your expected cash cost level in 2027, according to our TOD, if there is room for additional improvements or lower cash costs in the medium term? I'm thinking more specifically about 2027, not to anticipate what -- any revisions you might make to your TOD, but to think if this cost-cutting trajectory is going to be somewhat linear throughout 2026 and 2027 or if you have specific events that we should see maybe in 2027 so as to drive your costs down? And my second question to Grimaldi. Thank you so much for the comprehensive backdrop that you viewed for pulp prices. Grimaldi, if you could just discuss a little bit about your expectations for the main topics to be discussed in 2 weeks at the London Pulp Week or in 1 week at the London Pulp Week -- last week, Chenming's stoppage was maybe the most important topic. And exactly, you mentioned in your speech that you're thinking -- that you are still hopeful or optimistic about price increases going through. Is there anything that changed over the past couple of weeks, so as to give you or to leave you more optimistic given that the industry was not able to absorb the price increase attempts in September and October, right? Is there anything that changed at all? Or if you could explain why you are optimistic or more optimistic now than you were in the past maybe 2 months?

Daniel, thank you for your question, Aires speaking. Considering the deal with Eldorado, we start to supply our facilities in Mato Grosso do Sul with this wood probably in January. Then we do not suffer any impact, just probably reschedule the sequence that we receive at the facility in the fourth quarter to rebalance consider this new volumes. But the main reason of this deal that give you our rationale to do this was that our reduced -- our consumption per ton of wood, consumption wood per tonne in the coming years. When we compare with your previous analysis, we are considering in the business case and with the first samples that we have of this wood, a reduction of around 4% the necessity of wood per ton in Mato Grosso do Sul. If you consider that we will supply on an average, 18 million cubic meters per year, we will need 4% and less for the coming years to produce the same amount of pulp. That's the rationale that you have to do this deal. We'll try to explain better in the Suzano days in the next month. Then the rationale to next year and the other one is to running always below 800 tonnes per quarter. Of course, we can be affected with some sched off downtimes that will affect in a specific quarter. But the idea that we have in our plans that our average will be below 800 tonnes per year.

Okay. And Daniel, now it's Leo here. I'm going to answer the second part of your question regarding expectations for London Pulp Week. I think first, expectation, which is more and more clear is that this market scenario is completely unsustainable. And as we are going to a market that is a core of production of softwood, I think this tonne is even higher than what we see or sense when we're talking about South American pulp production. It's completely unsustainable, even if we consider European cash costs and sales into the European market. Again, as I stated in my speech, as per our calculations, more than a year already bleeding 25% of the local hardwood production. So this is unsustainable and the fact that the market is unsustainable as is, I think, will be one of the main factors being discussed during London Pulp Week. I also think that what will be a topic is the rhythm of unexpected closures. As I mentioned during the last call, we saw a very low level of unexpected closures in the first half of this year. And our line of thought is that all the instabilities around the world and geopolitical issues made some decisions not to be taken in the short term as many were on the wait-and-see mode to try to see what could be the scenario after there was a clear view on tariffs. As this is now clear, we see that the addition of this unsustainable scenario with a clarity in terms of tariffs will speed up the amount of unexpected closures, commercial downtimes that we see in the market. And in fact, as per our controls according to consultancies numbers, if we compare the unexpected closures of beach chemical pulp in the first half of the year, and just the 4 months of the second half of the year, meaning until October, there is already a 40% increase on disclosed unexpected closures. So our thoughts or our line of thought seems to be executing or seems to be happening as we speak. And we again believe much more has to happen under this very depressed pricing scenario. Now regarding your question on my optimism a quarter ago and today, I think my optimism level is slightly better now despite I was optimistic in the last quarter. Thus, the reason we have announced a sequence of 3 price increases. And the reason why we did that is because, obviously, we were monitoring order inflows in all markets and in China, more deeply even with the purchasing patterns of integrated paper producers, the amount of capacity on the water in the world as we speak, and this feeling of optimism now has been a bit upgraded, if I could put it this way, due to the fact that we're seeing a reversion in the cost of wood chips to Chinese producers. As I mentioned to Caio previously, we have seen this $25 to $40-ish increase on the prices of BDMT, meaning an impact of anywhere from $50 to $80 in the cash cost of Chinese producers who are using Chinese wood. And this obviously put pressures in the whole system and establishes a new grown for what they can accept or base their decisions in terms of timing that they buy market pulp rather than consume local wood as well. So it's my optimism increased a bit, I would say, due to the effect of this new scenario regarding regulations on recycled fiber, as I mentioned, and wood increase. It is, however, important to say that my optimism is somehow limited. We see gradual price increases, but under this oversupply scenario, unless something major happens on the supply side of the equation, my optimism is not as big as you can imagine. So I would just like to point this out.

I'm sorry, just complementing the first question regarding the TOD that you asked. Just a remark here, we are completely committed with the guidance that we shared with the market regarding what we have to deliver by 2027 and confident that we're going to be able to deliver, okay?

Our next question comes from Rafael Barcellos with Bradesco BBI.

Beto, I wanted to use one of your highlights during your speech. I mean, congratulations for the results in your U.S. Packaging business. It's good to see that you are on track to keep delivering in this new business. And my first question is exactly about it. I mean, what can we expect in the coming quarters? Or do you have any sense of EBITDA contribution from this business for next year? And ultimately, what is the full potential in the long term for the business? And the second question, Beto. The second question is about Lenzing. If I'm not wrong, you can already exercise the option to acquire an additional stake in the company. So could you -- could you please share with us your overall thoughts on the investment? I mean, other than that, after roughly a year, I mean, what has changed in terms of how do you see Lenzing as part of your portfolio?

Thank you very much. Yes, since October, we already have the option to execute if we want, as you know. We are not considering to use this coal in the short term. We're still with the team, analyzing all the trends, all the investment in further capacity in the business, mainly on dissolving pulp globally. This is a market that it's also facing a business environment in terms of competition, mainly in Asia, which we should further analyze. So I'd say that the best answer for Lenzing now is we will keep as it is with the 15% and keep analyzing the business and keep this study. There is no plan for using the coal in the short term. Regarding Suzano Packaging, as I mentioned, we are very glad to be anticipating, I would say, the business plan. Firstly, in terms of positive EBITDA after taking a business that used to have a negative EBITDA. A lot of initiatives have been implemented on the commercial side, on the procurement side, on the logistics side. On the logistics side, we have been able to take the advantage that we have a strong logistic operation in U.S. that's led by Leo's team in U.S. and there's our synergy on those negotiations to do all the logistics for the business. We were able also to adjust the team for the reality that we have in the company and in the market. I would say that it's still a lot to come. Fabio has a clear plan for the next 2 years, not only for generating positive EBITDA, but also generating the amount of cash that we are expecting for the business. It's a small business, as you know, but it's helping us a lot to understand the market, of course, to extract value from the unit, but also to understand what is for a company moving abroad. Having the chance to implement our principles in terms of management in a different future. I think we are also learning a lot in Pine Bluff that will help us on the K-C JV in the future. So I cannot disclose a number in terms of next figures, but I would say that we are very glad regarding what we have delivered so far.

Our next question comes from Caio Greiner with UBS.

My first question on pulp. I wanted to go back to that discussion on the long-term fundamentals that Suzano discussed during the Investor Day. I mean we've seen a significant amount of capacity additions in China in 2026, but pulp production in China still seems to be growing only gradually. Still, I guess, the market in general and investors have been really concerned about this idea of China becoming the dominant player in the industry. And again, I know you provided a deep dive on this during our Investor Day in 2024. So I just wanted to understand if there are any updates on that structural view being that maybe a tighter wood chip market as we already discussed, anti-involution ideas in China. So I guess the question is, since last year, have you become more or less concerned at the margin regarding the structural fundamentals for pulp? The second question on Kimberly-Clark and following up on this last topic. Just maybe Beto or Fabio, if you guys can give us an update of how the asset is performing. How -- if you have been able to dig a bit deeper into each asset that you're acquiring, if there's more clarity on the synergy potential, fiber-to-fiber potential? Or maybe if you got the chance to understand if there are any assets that don't really fit quite well into the portfolio that are likely to be sold. Anything that you could comment here would be really helpful.

Caio, this is Leo here. I try to answer your question, not taking color out of our Suzano Day 2025 as we are planning to update completely the scenario that we presented last year, bringing insights on the verticalization effect of Chinese production in our hardwood market. And again, it's important to say that as we have local market intel teams in most major markets, China included, this anticipation of view of trend makes us, I guess, more prepared for any kind of reaction or action that we need to take in terms of what's coming ahead of us. So our view, I would say, is quite neutral at this time. I think the same trend that I have presented to you and to all of you during our last investors call is maintained. We see -- we still see this verticalization affecting our market. But as you mentioned, we are not seeing this pulp production yet growing. Obviously, when you put all these projects in a time line, still a lot of them, I think the effect we are going to see on a bit more short to midterm, the next 4 quarters, which has 2 ways of looking at this, right? The negative way is impacting, obviously, market fundamentals. And the positive way is a much bigger demand for local wood chips and a pressure that this could further pose on wood chip prices. And again, we have to monitor that. And as we speak and see what's going on is that this market prices that we still see, which are low, despite they're going slightly up from the 494 valley a few months ago, still is incentivizing many, many Chinese producers, paper producers, integrated paper producers to buy market pulp. And this is the reason why we see that pulp production is yet not growing or is not growing, while imports of pulp are booming in the market. You probably saw that hardwood pulp is -- the imports of hardwood pulp is growing more than 11% year-to-date to China. However, I would say that our view remains cautious, right? We are in a cautious mode, which obviously will depend on how we interact and see these moving parts in the wood chip prices in China. And also, as I mentioned, this completely unsustainable pricing scenario and how it correlates to cash costs around the world and will depend on supply side adjustments in the near term.

Luis, do you want to jump in and I can complement?

Okay, Beto. Caio, this is Luis speaking. As we have already disclosed before, during the phase pre-signing, we have visited all the mills around the globe, and we were very positively impressed at that time with the conditions of the plants and also housekeeping and everything. So at this stage, we have received more information and have been talking to KC given the constraints that the process requires. And we are more positive with the initial estimates that we had. And as time goes by, we will have more time to fine-tune the estimates and to build a business plan for closing. So our idea is when we close the deal, we will have already a business plan for the coming 2 years with the right level of detail on which are the levers to generate value on the deal.

Just to complement on that, we see the value creation in the business that we mentioned. It's very clear for us the elements that we have analyzed before the deal and maybe further elements that we will find, and we are already discovering. I would say that our main concern is not regarding the assets. If there's opportunity to optimize the asset, we will do it. If there's opportunity to optimize geographies, we will do it. This is something that usually is not in the agenda of a big multi-national, but we will consider portfolio management as if necessary. I would say that the main elements that we should take into account against not the assets, it's not the carve-out that we have to do, which is difficult. But it's putting 2 cultures to walk together with the same values, but having the ability to extract the best of each one. That's the main challenge that this organization have in this process.

Our next question comes from Yuri Pereira with Santander.

I'd like to ask maybe if you have any information about the floods in Southeast Asia, if you see any impact -- any further impacts on wood prices in China, if you have any information, please? And regarding dissolving pulp, do you see more shifts like Bracell's one for the next year? If you can recap for us what's going on in the dissolving pulp market to result in this shift or if it's only low hardwood prices per se?

Yuri, this is Leo here. I'm going to answer both questions. Obviously, floods have influenced also wood chip prices in the short term. I didn't mention it because obviously, this is very, very punctual and short-term-ish, first in the southern part of China. And now as you probably saw in Vietnam 2, 3 days ago where the daily rainfall was a record all-time high. But, yes, obviously, this is also influencing wood chip price and its dynamics. In terms of dissolving pulp, what we see is that today, prices in DWP is trending higher than the historic average of delta between hardwood and DWP over $250, and that's incentivizing this flex capacity to swing in that direction. So in this case, yes, we expect that possible new flex capacity moving or shifting from hardwood, which, as I mentioned, is unsustainable to dissolving is possible.

Our next question comes from Lucas Laghi with XP.

I just have one, I mean, on CapEx. But could you please provide us an update on -- specifically on expansion CapEx. I mean, if we exclude the BRL 935 million expected from your 3 main projects, I mean, according to your latest presentation deck and considering the BRL 1.6 billion in the guidance for 2025. I mean, is it reasonable to expect that this line should reduce in the next year proportionally to this reduction on the 3 main projects that you guys are concluding this year? Or I mean should we expect Suzano to continue to approve new competitive projects like those ones already in 2026? And if you could also link your rationale for this -- the approval of this competitive related projects in terms of market conditions. I mean, it would be important as well for us to better understand how to think of this expansion CapEx line going forward?

Lucas, Marcos here. We will update the market with our guidance for 2026 CapEx by the end of this month. But I will try to give you a little bit of a trend, what we see in terms of CapEx. As you mentioned, we still had in 2025 disbursements for the Cerrado project. And we also had the conclusion of some growth projects that we undertook in 2025, namely the Fluff project at Limeira mill, which will start up in the fourth quarter. Also the additional capacity in tissue at Aracruz Mill and the new biomass boiler at Aracruz as well. So going forward, we should expect a declining trend in terms of CapEx for next year as we will have lower disbursements and also we'll have less projects in our pipeline.

Our next question comes from Henrique Marques with Goldman Sachs.

So just regarding pulp prices, I mean, Leo, you mentioned that pulp price situation is unsustainable. But at the same time, the pulp price cycle has been -- the hikes have been very gradual, right? So I think this is the main difference from what we've seen in other cycles. At the same time, we have APP OKI entering the first half of next year alongside other projects in China. So just to get a sense of where exactly do you see pulp price cycles in the future? Like do you think we are seeing a derating of this range of prices? Like in the past, I mean, we would usually see prices going above $700 per tonne in both cycles. And now the -- I think it's hard to think that we'll see prices reaching $700 again. So just wanted to get your sense on what exactly do you see these price ranges going forward?

Hi, Henrique, thank you for this question. It's a tricky one to answer as obviously, it has several parts that are connected to our commercial strategy and are very sensitive in that case. But let me try -- and I'm going to give a lot of color in terms of how we are seeing the variables that can change this game in the short term and looking forward during our Investors Day. But in principle, they all originate from the fact that we have now been living a scenario where for several, several months the industry is bleeding, right? And several things could happen to change this scenario. First is, again, reintensifying of permanent closures. We have seen a decline in permanent closures in BCP during this year. Again, we suppose that a lot of that has to do with the uncertainties that the geopolitical and tariffs have created in the decision-making process of this extremely high cost and unsustainable producers that we see in the Northern Hemisphere. Second is the unexpected downtime rhythm going forward. Even though I mentioned that we see an uptick already in the 4 months of the second semester, compared to the first semester of this year, it's still low compared to previous years. For the same, we expect or we suppose for the same reasons of the one that I mentioned regarding permanent closures and all the uncertainties during these tariffs and geopolitical timing. This, again, is unsustainable and something should or could happen in that direction. Third point that could change these dynamics is the timing of the new projects being implemented. Today, we have official news regarding OKI, which are the same as you have. But obviously, all of this more challenging scenarios can stimulate different actions in terms of time to market of new projects. And in the same token, time to market of the verticalized projects in China or their ramp-up curves, right? So that is a variable that we have to follow very closely and could change completely the game as we look forward. And fourth and very important as we talk about verticalization in China and the impact it has on reducing demand for hardwood pulp. But there is a huge opportunity, which is what we see on the Western world. More than -- or 2/3 of the pulp produce in the world is integrated into paper and packaging production. Many, many old sites, old mills, which were the origin of paper production and board production are in Europe and in North America and persisting this trend or this pricing trend, we believe that these mills are unviable or unsustainable. So we believe a lot in the thesis of deep verticalization in the western part of the world as a consequence of what we're seeing in China as we speak.

Our next question comes from Eugenia Cavalheiro with Morgan Stanley.

I wanted to explore a bit more what you're seeing as growth opportunities in the paper market in the U.S. And also on the profitability side, where do you feel like -- what level you feel like it's reasonable for the company to achieve? And how far are you from that right now?

Eugenia, it's Fabio here. Beto, I can take that about the U.S. We're still a very small player here in the American market. We have 45% of the SDS market. So still plenty of rooms to grow. At the moment, what we are doing here, Eugenia, is focusing on our growth in foodservice. It's trying to diversify a little bit from the liquid packaging board market that we are concentrated, and it's doing well. Regarding business moving forward and our profitability moving forward, we cannot provide any color on that, but I would like to say that there's still lots of opportunities for us to improve in terms of costs here, and we're going to be addressing that in the next quarters and moving in the next year.

Thank you, Fabio. Absolutely aligned with what we said in the beginning, which is focus on efficiency. So as Fabio said, a lot of -- still a lot of opportunity to improve portfolio and cost in the current facility that we have in U.S. And Eugenia, there is no further, let's say, inorganically alternative for U.S. in the short term at this time. So we are again completely focused on extracting the value from those assets that we have a prior already. We finalize the call here. And I want to remember that we have the Suzano Investor Day 2025 on December 11. So we will be great to have all of you with us. So thank you for attending the call. And the RI team is always available to clarify any further questions. Thank you very much.

The Suzano S.A. third quarter of the 2025 conference call is concluded. The Investor Relations department is available to answer further questions you may have. Thank you, and have a good day.