By Brazil Stock Guide – Eldorado Brasil reported a net profit of R$ 2.884 billion in 4Q25, a sharp jump from R$ 317 million a year earlier, driven largely by financial results and foreign exchange effects rather than core operations.
Despite the headline number, operating performance weakened. Adjusted EBITDA came in at R$ 610 million, down 21% year-on-year, while net revenue fell 17% to R$ 1.410 billion, reflecting lower average pulp prices and reduced sales volumes in the quarter.
On the cost side, the company continued to show discipline. Cash cost without downtime reached R$ 742 per ton in the quarter, supported by higher use of owned wood and stronger energy sales. Still, a scheduled maintenance shutdown in October impacted production, which totaled 406,000 tons, down both sequentially and year-on-year. Sales reached 459,000 tons, broadly stable quarter-on-quarter but 6% lower annually.
Market conditions offered partial support. Eldorado pointed to a more balanced global pulp market, with supply disruptions among short-fiber producers helping sustain benchmark prices in China and Europe. Its average realized price rose 1% quarter-on-quarter to US$ 535 per ton, though still down 8% year-on-year — highlighting that the recovery remains incomplete.
Even with free cash flow generation, the company ended the year with net debt of R$ 9.659 billion (US$ 1.755 billion), pushing leverage to 3.33x in dollar terms — a sharp increase from the prior year. The result: Eldorado is operating more efficiently, but increasingly dependent on a sustained pulp price recovery to deleverage.
For the full year, Eldorado reported EBITDA of R$ 2.961 billion, with a margin of 50.4%, while net revenue totaled R$ 5.879 billion, down 8% year-on-year. Free cash flow reached R$ 1.149 billion, underscoring the company’s ability to generate cash even in a weaker pricing environment.
Operationally, the company maintained high utilization levels, with annual pulp production close to its nominal capacity of 1.8 million tons. The absence of scheduled maintenance shutdowns in early 2026 is expected to support volumes, while cost efficiency gains — particularly in forestry and energy — remain structural advantages.
Eldorado is controlled by J&F Investimentos, the holding company of the Batista family, which acquired the asset in 2017 from Indonesia’s Paper Excellence after a protracted and highly contested transaction. The ownership structure has been a central element of the company’s strategic direction and capital allocation decisions.
The broader setup for 2026 hinges on pulp prices. While the end of 2025 showed signs of stabilization, the company enters the new year with higher financial leverage and greater sensitivity to market cycles. In practical terms, Eldorado’s story has shifted: from operational turnaround to balance sheet management.
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