Suzano SA (SUZ) 2018 Q3 法說會逐字稿

Good morning, ladies and gentlemen, thank you for waiting. Welcome to the conference call of Suzano Pulp and Paper to discuss the results for the third quarter of 2018. Participants will be in listen-only mode during the presentation of Mr. Walter Schalka, Chief Executive Officer; Marcelo Bacci, Financial and Investor Relations Executive Officer; Carlos Anibal, Pulp Executive Officer; Leonardo Grimaldi, Paper Executive Officer; and Fabio Prado, Consumer Goods Executive Officer.

Afterwards, we will begin the question-and-answer session and further instructions will be provided. (Operator Instructions)

Before proceeding, please be aware that any forward-looking statements are based on the beliefs and assumptions of Suzano's management and the 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. I will hand over the call now to Mr. Schalka, who will begin. Thank you.

Good morning, everyone. Thank you for joining the third quarter results announcement of Suzano Pulp and Paper. We have with -- here all the management team of Suzano, so be ready to the Q&A session after the presentation. We are very pleased to announce the third quarter results, we have a set of very good operational results at this quarter, and we are very pleased with that several records that we are announcing today. And as well we are on track and on time on the transaction with Fibria. We are planning to have this operation -- the closing of operation as soon as we get the final approval of the European Commission. We are very pleased to announce that we have record production at this quarter with almost 1.3 million tons combining pulp and paper and the operations with sales of 1.24 million tons on several geographic areas. And we have a record EBITDA on our history with BRL 2.1 billion, 35% higher than the previous record that was in the last quarter, and 79% higher than last year quarter-over-quarter results.

As we have been telling to the -- to everyone and now we're understanding operational cash flow is the most important KPI on our operations, of course, return on capital employed is the most important one, but operational cash flow was BRL 1.8 billion in last quarter. That is 40% higher than previous quarter and 98% higher than the last year Q3 results.

And this is extremely positive, and we are very pleased with that.

On top of that, we have been going forward, every single step to have the closing of the transaction with Fibria. On the -- as Marcelo is going to comment with you we have been -- have receiving approvals from several jurisdictions, and now only Europe is missing to have the final approval of the transaction. Now I'm going to pass to Carlos -- to Leo that is going to present the Paper results.

Thanks, Walter, and good morning, everyone. I would like to present the results for Suzano's Paper business unit for the third quarter of 2018, which was a record quarter for us. The figures presented on this next slide are specific to our Paper business unit. Therefore, excluding Suzano's consumer business units results and enabling us to have a better comparison with the past quarters.

Beginning with the top-left graph, we have produced 305,000 tons during the third quarter and 1.17 million tons of during the last 12 months. This is a 1.4% increase compared to our 2017 production figures.

Moving on to the top-right graph, we have reported 308,000 tons of paper and paperboard sales in the third quarter, 16.6% higher than the second quarter '18 and much in line with the third quarter '17. We have again used our commercial flexibility of selling our products, either in Brazil or internationally with the [core] location of our production.

When we look specifically at our paper and paperboard sales in Brazil, we can note a 23.3% increase compared to the second Q '18 and a 5% increase compared to the third Q '17. Our sales were positively impacted by the additional demand generated by promotional printed material used for presidential and state elections in Brazil.

Ibá, our Pulp and Paper Association has just posted the figures for the third quarter. The domestic industry sales of printing, writing and paperboard grades have increased 17.4% compared to the second Q '17 and 2.1% compared to the third quarter '17.

Before we take a look at our EBITDA margins, I would like to reinforce our pricing evolution. Our pricing in Brazil have again moved up during the quarter, being 3.5% higher than what they were in the second Q '18, and 11.6% higher than they were in the third Q '17. Our export prices have presented a similar trend, with a 2.4% increase in U.S. dollars when compared to the second Q '18, and 12.3% increase compared to the third Q '17, or more than 40% in our local currency when we consider the additional effect of the Brazilian real depreciation during the period.

As a result of production stability, strong sales volumes and successful price increases both on domestic and international markets, our adjusted EBITDA margin has now reached BRL 1,306 per ton. This is a 43% increase in EBITDA margins when we compare to the third Q '17 and adds up to BRL 920 million of adjusted EBITDA for the first 9 months of the year. Our ROIC has also increased, reaching 16.2% in the third quarter '18.

I would now like to invite Carlos to present the results for the Pulp business unit.

Thanks, Leo, and good morning, everyone. So let's go to Page 5 of our presentation to cover the Pulp business results in Q3. The Pulp business delivered a solid performance. We continue to see favorable market conditions and supply-demand has balanced across the key regions. Market fundamentals are solid. Actually, demand for Q3 came in stronger than we were expecting. Operationally, we executed very well, production amounted 941,000 tons in Q3 and almost 3.6 million tons in the last 12 months. This is a new production record. We're very pleased with that achievement. It is important to remind you that we didn't have any planned maintenance shutdown in Q3. For Q4, we have just concluded our 15 months maintenance planned shutdown Imperatriz that last longer than the usual. The reason behind this fact is the installation of the new washing system that will allow us to reduce chemical consumption, thus, reducing variable cost in the future. This was the last planned maintenance shutdown for 2018. The next planned ones are scheduled for Q1 '19 when you have Mucuri Line 2, Limeira and Suzano. On our last conference call, we said we needed to increase our pulp stocks, once we were running at a very low inventory level that was impacting our logistics, and we need to improve our service to customers. Pulp stock went up almost 40,000 tons in this quarter, and we are fine with that. Despite this minor increase, we are still running below our ideal level, which brings operational challenge to us. We may continue to build out the inventories in the coming quarter in order to normalize our service level and be better prepared for our planned maintenance shutdown scheduled for Q1 '19.

Talking about sales, sales volumes reached 903,000 tons. As I said before, we took advantage of a stronger than expected demand across the key markets. Our revenues were up 25% quarter-over-quarter and 64% year-over-year, reaching BRL 2.7 billion as a function of stronger volumes and a weaker real which depreciated 10% quarter-on-quarter.

Our adjusted EBITDA for Q3 was BRL 1.7 billion, and EBITDA per ton reached BRL 1,900 driven mainly by weaker real. Finally, the return on invested capital for the last 12 months for the pulp business was slightly over 22%.

Moving to the following page, Slide #6. Cash cost for Q3 was BRL 619 per ton down BRL 11 quarter-over-quarter. For the last 12 months, this figure was BRL 602, up BRL 14 per ton in comparison with the same period last year, mainly due to FX impact on raw material cost. Now I'll turn it over to Marcelo Bacci who will go over our investments.

Thank you, Carlos. So moving to Page 7, our investments in the first 9 months of the year have totaled BRL 2.1 billion. And for the year, we continue to aim the BRL 2.8 billion number that has been disclosed before. In the quarter, the total investments were BRL 866 million, pretty much in line with what we have planned.

On Page 8, we can see our debt profile, which is significantly impacted by some transactions that we have been doing in preparation for the Fibria deal closing. Our gross debt has increased to BRL 23.8 billion, close to $6 billion. And our cash position went to almost BRL 13 billion, as I said, in preparation for closing.

The average cost of debt increased to 5.2% from last quarter mainly because of the bond issuance -- the 10-year bond that we did during the quarter. And for the same reason, the average debt maturity went to 93 months, which is the highest that we ever had.

Our leverage measured, in dollar terms, is down to 1.4x according to what we have planned.

The Fibria business combination on Page 9 is going -- is evolving on expected schedule. I think the main events that we had since last quarter were first the registration of Suzano's shares with the SEC. And in the sequence, the approval at the shareholders' meetings of Suzano and Fibria held on September 13 that finished all the statutory side in terms of the approval we needed. On the financing side, as I said, we issued a bond of $1 billion. And that, together with some other transactions that we did in the quarter was responsible for the cash position that we saw in the previous slide.

On the antitrust side, we have received the approval from CADE 2 weeks before today, and we have filed with the European Commission and we expect the process in Europe to be finalized still in November.

The hedge portfolio on Page 10 that we hold today for the Fibria deal. The position on -- at the end of September was that we had 84% of the payment to Fibria hedged. The position today is even higher, we are close to 100% hedged at an average exchange rate of close to BRL 3.73 as it is in this slide here, which give us a lot of comfort that the total amount that we're going to have to pay in dollar terms is already fixed and is not going to change.

Of course, debt hedge portfolio, together with the normal hedges that we have in our balance sheet is a total position now of $11.7 billion of notional when we add FX and interest rate derivatives. And that has caused a loss -- accounting loss of BRL 1.36 billion in the period, which is a function of the real moving from BRL 3.85 to BRL 4 in the quarter. Almost all of this result is linked to FX variation since the interest rate hedges have changed not so much in the period.

Of course, today, we are -- we have an interest FX rate of below 3.7%. So if we have to mark-to-market today, we would have a significant gain in relation to the number that we posted at the end of last quarter.

On Page 12, we can see the funding structure and the financing that we need to have for closing the transaction, so just recapping the numbers, the initial number of the cash payments was BRL 29 billion, which corrected by CDI as the contract assess up to the end of September, we have BRL 30 billion. The mark-to-market of the hedge positions at the end of November was another BRL 1 billion, so the total payment that we have to finance if we have to close at the end of September was BRL 31.15 billion. We already have BRL 13 billion in our cash position, as a consequence of the cash flow we generated plus the transactions that we already did.

We still have to draw on the first tranche of the financing that we announced back in March, so that is above BRL 9 billion, the $2.3 billion that we announced before. And the remaining BRL 9 billion to reach the BRL 31 billion, will come from a combination of the cash surplus that Fibria is going to have up to the end of the year, plus the cash generation that Suzano is going to have between now and the end of the year and some additional financing that we are already doing. And the combination of these 2 things will be more than what we need for closing the transaction. And that's the reason why we announced yesterday that we are reducing to 0 -- the amount of the bridge loan that we contracted in the beginning of the transaction back in March because now we have funding needs that are more than enough for what we need to close the transaction.

So with that, I turn back to Walter, who will make the closing remarks.

Well, before we are going to the Q&A session.

(Operator Instructions) Our first question comes from Leonardo Correa with BTG.

My first question is coming on the leverage side post-deal. I just wanted to check with you exactly what your goal is for net debt-to-EBITDA targets maybe by year-end 2019, just to see whether a new wave of expansions could be eventually approved? And what type of leverage you're aiming to before approving new projects? And second, my question is regarding supply discipline. We've been seeing some supply being removed from the markets this year mainly from Fibria and Suzano, so I just wanted to see how you're seeing supply management into 2019? I think that would be also very helpful. So those are the 2 questions.

Leo, this is Marcelo speaking. Thank you for the questions. In terms of leverage, of course, we are going to start at a much better point that we had planned before because of the cash flow generation that we've been having this year, because of the operational performance of the company. It is difficult for us at this point to give you guidance on where we're going to be at the end of 2019, but the starting point is definitely better than we expected.

Related with the expansion, it's Walter, on your point, Leonardo, it is something to be discussed after closing, of course, we have much more flexibility right now, and we want to create optionality to the company after closing. And with the new management team we will discuss what will be the capital allocation for the next coming years after the closing then, we cannot give you any specific guidance on that.

Leonardo, this is Carlos. Regarding your question on supply. As I said, we have just concluded our annual maintenance shutdown in Imperatriz and from now onwards we will be running at full capacity until beginning of next year when we're going to have other set of planned maintenance shutdowns. So business as usual, we're running at full capacity.

Perfect. Walter, just to elaborate a little bit more maybe on my initial question. On the potential pulp supply additions coming from Fibria and Suzano. It's good that Fibria and Suzano, they have the best project in the industry which is H3, right, Horizonte 3, at least in my opinion, which I think may be several share. And it's also clear that the incentive pricing at this point in the industry is very high, right? So if we think of return on equity at current parameters, the level would be probably even above 30% return on equity. So the incentives are very high, Fibria and Suzano have the best project in the industry. The market is moving into a deficit, probably 2019 and '20. Having said all that, I remember, Walter, that you -- couple of years ago, you were quite skeptical on adding capacity in the pulp industry, and you've been quite vocal in the past on saying that the industry doesn't need more pulp capacity. I just wanted to see how your views have been reshaped over the past couple of years? And how you see more capacity now with all these shifts in parameters?

When Leonardo announced the transaction on March 15 -- March 16, sorry, Leo, we told that the main target of the company would be to deleverage as fast as possible. Of course, the tailwinds there is helping us with the situation with a better pulp prices and better FX help us to deleverage better than we expect. As Marcelo mentioned, we are creating more flexibility and this flexibility is very positive. We will still keep our financial targets to be between 2 and 3x net debt-to-EBITDA. And this is very important for us, and we will keep -- and we are very disciplined on this point. Related with the alternative that we have for the future, of course, organic growth is one the alternatives that we have, and we will consider this on our discussions after closing. We do not have enough information on Fibria assets at this point to allow us to take any kind of comment on that, but I'm sure that after closing we will put the new management team together, and one of the main issues to be discussed at the first moment would be capital allocation for the future. Of course, we are generating a lot of cash. The combining numbers of both companies that you saw day before yesterday when Fibria announced the results and today when we announced the results are very positive. And it's very good to be in a company that have a lot of optionality for the future. We are not ready to -- we are not even started this discussions which we're going to start just after closing, and we are going to announce to the market when we'll be ready after the management team sit together and discuss about these alternatives.

Our next question comes from Thiago Lofiego with Bradesco BBI.

Two questions on my side. On the pulp market, Carlos, if you could comment on the short-term dynamics we've been hearing about, higher inventories in China. We also heard about Chinese trade is pushing for price discounts because of resale prices are trending down. Could you please help us understand what's going on in the short term? And also if you could give us some color on what's the -- what are you seeing in terms of end-user demand for paper and consequently for pulp as well in China in the short term? Second question more the end -- back on the deal, so you mentioned the timeline for the European Commission approval could be in November. What's the timeline for the [NTAC] approval? Would you expect that to happen this year still? And what's your base case for the ADRs to start trading?

Thiago, this is Carlos. Thanks for your question. I would say that the global pulp market is balanced, in terms of supply and demand at this point. We believe, that the market fundamentals, it supports the current hardwood prices. I can say to you that our October business has been evolving according to our expectation. And by that, I mean, our regular volumes and flat hardwood price across the key markets. We are just leaving the low season period behind, and I have to say again, that was much stronger than we're expecting. And we believe that we begin Q4 will start at the normal level throughout the entire supply chain. On the demand side, we see it as solid and healthy across the major regions. We believe that the new additional capacity in China should go on supporting the paper -- the pulp consumption there. On the supply side, they can say that planned market downtime continue to limit pulp supply for Q3, and Q4 had to start off with more of the same. We have just learned about [no] more on planned shutdowns in Japan, in British Columbia. When you look at the Q4 pulp supply, we also expect that to be curtailed by another round of regular and several maintenance shuts across the industry, during mainly in September and November. However, we cannot forget, we also have some -- more softwood capacity coming from Sweden and Belarus.

About China, I can say -- I can share with you what we have heard from our customers, and it is to expect that the paper demand will similarly pick up over the next weeks or months ahead of the Chinese New Year. They say that the finished product stocks are at the right level to support the seasonal demand pickup. We -- based on our local team, we understand that the pulp stocks are at the normal level throughout the chain from producers to customers there in China. So we see there in China, the market is balanced. In terms of new capacity, the number that will work here for China for this year, we have around 4 million tons, and out of that 1 million, 1.5 million tons would be coming from Tissue. And just to share a few numbers that were released the other day by PPPC, market pulp demand has grown close to 7% year-to-date in China. In hardwood, it's growing 15%. So in our view that supports the good momentum of the market there.

Related with the time -- it's Walter. Thiago, thank you very much for the question. Related with the timeline of the transaction, we expect in November to have the approval the European Commission and [NTAC]. And as you may know 45% -- 45 days after the precedent conditions will be the closing date of this transaction, then probably, it's going to be late December or early January, the closing this, but we expecting at this point of time.

And Thiago, the ADRs will start trading sometime between the approval date and the closing date. This is still being discussed with the exchange and the date will be defined and will be announced when we have the final approval of the transaction.

Mr. Bacci, could you repeat that, please? I couldn't understand ADRs will trade sometime between...

We will start trading sometime between the final approval, that -- as we said end of November and the closing, which is going to be end of December, beginning of January. Probably, closer to the closing. We still don't have the date defined, but this will be announced, probably, when we announce the final approvals.

Our next question comes from Marcos Assumpção with Itaú BBA.

My first question. If you could, Bacci, elaborate a little bit more on the potential leverage policy for the new company? So how do you see the combined leverage for the new company? If you have a target for total debt or for net debt? And also, what's the minimum cash that you think that the new company could have in the future? And the second question, on the pulp cash cost, we saw a decline this quarter. But also, if you could elaborate a bit on the wood cost, what were the trends in this quarter, mainly on the logging distance and third wood -- third-party wood? We were actually expecting a bit deeper decline in cash cost, but maybe, you can explain a little bit what happened.

Marcos, this is Marcelo speaking. Thank you for your question. The leverage policy for the new company will be -- we will start at the same that we have today and some changes are being discussed between management and the board and the discussion will probably take place on a more definitive way after closing as to whether or not we're going to add additional features to the existing policy. As we're going to have a significantly large amount of debt, close to $12 billion or $13 billion, we may define some limits in terms of total debt, but that hasn't been discussed yet and will be announced as soon as we have a decision in relation to that.

The minimum cash, we have an assumption to start the operations that we -- unfortunately, we cannot disclose right now. We will probably start with the minimum cash that is higher than what we're going to probably need in the future. And just because we don't have full control or understanding of the flows on the Fibria side, so we'll probably start a bit more conservative. And we will refine this in the first months of operation.

Marcos, this is Carlos. Thanks for your question. We will not get -- give any guidance about the cash cost. But I can say to you that our average radius in Q3 was 183 kilometers and the mix was close to 80% own wood and 20% coming from third-parties. And this is our normalized level.

All right, perfect. Last one here on the Tissue side, if I may. We saw production reaching 45,000 tons this quarter. Is it fair to say that Suzano is already at full capacity?

Marcos, it's Walter. Asking you a question. We are not running at full capacity on Tissue. We have been gaining market share on the north and northeast part of Brazil. There is that -- our target market. But we are not running at full capacity. We will keep growing month after month on our target to be the leader in that specific region of Brazil.

Okay. Walter, I understand that in terms of sales you still have a lot of potential upside, but I mean on the production, if we just deduct the total paper production from paper production only on printing and writing and cardboard, we get close to 45,000 tons. So if you were to annualize that, would we reach 480,000 tons? Which seems to be pretty much the capacity of the company, maybe you have been able -- you will be to produce a bit more than what we were forecasting?

Marcos, we need to reconcile your number. We are not recognizing this 45,000 that you are mentioning on your -- because you are probably mixing with third-party sales on the paper side. But I'm not sure how we need to reconcile that. We will bring to you and to the market the right information related with that. I can guarantee to you that we are not running at full capacity, [firstly], but it's producing extremely well when we are growing our volumes on that specific region, and we are growing our volumes on our Mucuri and Imperatriz facilities as well. But we are far away from the full capacity.

Our next question comes from Carlos De Alba with Morgan Stanley.

Pressing on, we're going to the next question from Renato Maruichi with Santander.

My first question is regarding the cost of debt. Suzano is in a, let's say, in a transitory stage and probably the cost of debt to improve going forward. So my question is what do you believe is a sustainable cost of debt for the company longer term? And my second question is regarding the EBITDA margins of the Paper business. They were quite high in the third quarter, but how sustainable are they? And how do they compare to the margins from export? So those will be my first -- my 2 questions.

Renato, this is Marcelo speaking. On the cost of debt, we have several forces here playing in different directions. First, as we are extending the average tenor of our debt, bringing more long-term debt in preparation for the Fibria deal, this is of course -- that goes against the cost of debt, it increases the cost of debt. On the other hand, as we're going to have a very healthy balance sheet even after closing the deal, this is a signal that in the future our cost of debt tends to be lower than what it is today. But I think more important than that, we are investment grade and we intend to keep the investment grade status going forward. And when you compare the different companies in our sector that are investment grade in different regions of the world, we pay a higher cost of debt than some of our international competitors. And that has a lot to do with the situation of Brazil. So we think if we continue to deliver a good operational performance, and if Brazil helps us a little bit, I think we have a lot of room for improving the cost of debt in the coming years.

Okay, Renato, this is a Leonardo. Thank you for your question. Yes, we are very proud of our Paper EBITDA margin for the quarter being over a BRL 1,300 per metric ton excluding, obviously, our consumer products business unit. And this high EBITDA margin, obviously, is due to the seasonality in the third quarter as you know usually the third quarter is a very strong quarter for our Paper business, and the price improvements in our businesses, both in Brazil and internationally and also due to the real depreciation and the effect that this has on our exports. Looking forward, we will have a variable, which we, obviously, don't control, which is currency, but all other variables remain much controlled and we are very positive as well.

Mr. Carlos De Alba is back on the line. You can ask your questions, sir.

Sorry, about -- I got disconnected. Carlos, would you comment on -- maybe you did before, but I was offline for a couple of questions, perhaps. Could you comment, Carlos, on the impact of the longer-than-normal maintenance stoppage and [trees]? Although you don't give guidance, but you can maybe try to quantify to some extent or give some color on the potential impact on cost as well as pulp production, that will be great.

We usually do not give any informational guidance about what happened with our planned shutdowns. So I'll ask to [topple a giant] here but I cannot disclose that information, no. Definitely, we're going to have an impact on our cash cost for this month due to the shutdown.

Our next question comes from Juan Tavarez with Citi.

So my first question just following up on pulp. I'm just curious you mentioned that you saw stronger-than-expected demand during the third quarter, but what would you attribute this to? Is end demand growing? Or are customers restocking? Kind of, what's your perception there? And kind of thinking about inventories, you didn't mention that inventories today are somewhat comfortable for you. But I'm also curious, how high could it go in terms -- if demand were to face any challenges? How high could we see inventories be restocked at Suzano to the point that you won't need to take any production downtime?

So as I said and you could realize the demand again on Q3 was much stronger. That happened in all of our key markets in U.S., in Europe and China. And that has to do with the demand growth. If you look at PPPC numbers that were released yesterday, we are talking about a growth of roughly over 100,000 tons per month. So I think we benefited from that in all of our key markets. So could you please repeat your question about the inventory, Juan?

Yes. I'm just curious in an environment, let's say, that either demand were to slow down and you would try to restock your inventories. How high could they go above you -- what you consider comfortable levels? Are you willing to take it 5, 10 days above what you consider normal in the [hope] to try to balance the market? Just curious.

As I said, we are still running at a very low level. And we easily can have space to increase our stocks in above 5 to 10 days, our production depend on the market conditions. Depends on the demand, depends on what we get from our customers in terms of their needs for the coming months.

Okay. And maybe if I can just ask a question on paper. Since we started to see this currency move, I'm curious if you see any risk, pressure from imports? Or if we could potentially see a rollback of some of the price hikes implemented this year on the paper side?

Thank you, Juan. Up to now, imports are decreasing in Brazil. In the third quarter, imports of printing, writing and paperboard have decreased 21% compared to the third quarter '17, and almost 10% year-to-date. Regarding prices and what you're looking for and the effect of currency, as you know, our price dynamics depend on several factors, such as seasonality, supply and demand, freight rates and not only currency. But unfortunately, at this time, we cannot give further guidance for the fourth quarter.

Our next question comes from Renan Criscio with Credit Suisse.

So basically, just a one follow-up here on the deleverage side and dividend policy. You mentioned in the past, that you intended to pay the minimum dividend in order not to jeopardize the deleverage process throughout the next year. So now considering this new and better scenario for cash flow generation, do you consider perhaps being more flexible on paying dividends and perhaps increasing the dividends for the next year? And also, my second question is on the -- back to the consumer goods business, you are still in the ramp-up phase, can you elaborate more what can we expect for the consolidated margin once you reach full capacity in the consumer goods?

Renan, thank you for your question. In terms of dividends, I think as we've said before, we have more flexibility on the leverage side right now but we still have to see how we progress during the year to see what we can do in terms of dividends, but the base case is that we're going to pay minimum dividends next year. But let's see if the cash flow generation is higher than we expect, we may have that discussion again during the year.

Related to the consumer goods, Renan, thank you for the questions. Of course, the margins have pressure because the pulp prices that we are -- using the pulp prices going from the pulp business to the consumer good at market levels. Of course, the margins are pressured at this point of time. We are trying to enhance our margins through price increases on the consumer goods at this point of time. And this could allow us to have better margins, of course, we are not going to give any guidance on that.

We are now closing the question-and-answer session. I will pass the call back over to the company for the closing remarks.

Ladies and gentlemen, I would like to give a broad picture to you from what we are doing right now. I think the company is going through a major transformation. We are very pleased not only with the operational results, we are preparing ourselves for the future. We have are preparing ourselves to have with our -- all of our stakeholders to create and share value with all of them. We are very pleased with the results of the company, but we are looking for the moment that we'll be able to have the closing of the transaction of Fibria and deliver the synergies for the future.

We are very humbled, and we are very dedicated to prepare the company for the future at this point of time.

The company is going to be the fourth largest company in Brazil. This operation is combined operation between the 2 entities, it's quite important, not only for the company and the shareholders, but it's important for the country. We are becoming more and more competitive on a worldwide basis. We are preparing the company to have a lot of optionality for the futures, and we are very pleased at this point of time with the -- that we are on track and on time -- on the timeline -- right timeline, not only with this transaction, but we are delivering extremely good operational results at the same point of time. Again, thank you very much for your support. Thank you very much for the team. We are very pleased with the 9,000 employees' efforts that we are doing right now to deliver good result, looking for the present and preparing the future of the company. Thank you very much, and hope you have a nice weekend.

That concludes the conference call of Suzano Pulp and Paper. Thank you, everyone, for participating, and have a good day.