Klabin (KLBN4) Q1 2026 earnings summary

Executive summary

• Net revenue reached R$ 4.9 billion in 1Q26, up 2% year-over-year, driven by 12% growth in total sales volume across all business segments despite macroeconomic volatility and a stronger Brazilian real impacting export revenues.

• Adjusted EBITDA was R$ 1.7 billion, down 10% year-over-year, reflecting the impact of scheduled maintenance stoppages and currency appreciation, partially offset by higher sales volumes.

• Achieved 80% utilization of the new recovery boiler at Monte Alegre, ahead of the 76% target, marking the final phase of a nine-year transformational CapEx cycle.

• Net loss of R$ 497 million in 1Q26, compared to net income of R$ 446 million in 1Q25, mainly due to lower EBITDA, negative fair value variation of biological assets, and higher financial expenses.

• Significant sales growth in pulp (notably fluff), strong performance in beer-related carrier board, and kraftliner exports, especially to Asia.

Financial highlights

• Sales volume totaled 1.16 million tons, up 12% year-over-year, with increases in pulp (+16%), paper (+15%), and packaging (+3%).

• Adjusted EBITDA margin was 34%, down from 38% in 1Q25.

• Free cash flow was negative R$ 404 million in 1Q26, mainly due to higher CapEx and working capital consumption.

• Net debt stood at R$ 24.0 billion as of March 31, 2026, with a net debt to adjusted EBITDA ratio of 3.3x in USD, down from 3.9x a year ago.

• Liquidity at R$ 11.5 billion, including R$ 8.9 billion in cash; average debt maturity 85 months, average USD cost 5.1%.

Outlook and guidance

• Fitch Ratings revised the outlook to positive, reflecting expectations of deleveraging supported by strong cash generation, lower investments, and a more conservative dividend policy.

• Confident in maintaining cost guidance despite pressures from diesel and logistics; mitigation through cost reductions and price adjustments.

• Formal guidance for total cash cost per ton, including maintenance stoppages, remains at R$ 3,200–3,300 for 2026.

• Expecting price recovery in short fibers, fluff, and kraftliner in Q2, with ongoing efforts to pass on higher costs.

• No transformational CapEx or M&A planned for the year; focus remains on deleveraging and free cash flow generation from 2027.