Klabin (KLBN4) Q1 2026 earnings summary

Executive summary

• Net revenue reached R$4.95 billion in 1Q26, up 2% year-over-year, driven by a 12% increase in sales volume across all business segments despite macroeconomic volatility and a stronger Brazilian real impacting export revenues.

• Adjusted EBITDA was R$1.67 billion, down 10% year-over-year, reflecting the impact of scheduled maintenance stoppages and currency appreciation, partially offset by higher sales volumes.

• 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.

• Leverage (Net Debt/EBITDA in USD) remained stable at 3.3x, with Fitch reaffirming the company's global rating at 'BB+' and revising the outlook to positive.

Financial highlights

• Sales volume totaled 1.016 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, mainly due to higher CAPEX and working capital consumption.

• ROIC was 9.5%, down 1.2 p.p. year-over-year, impacted by higher CAPEX and increased invested capital.

• Net debt stood at R$24.0 billion, with cash and equivalents of R$8.9 billion.

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.

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

• CAPEX guidance for 2026 is R$3.3 billion, with allocations to silviculture, operational continuity, special projects, and Monte Alegre modernization.

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

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