By Brazil Stock Guide – Brazil’s Irani Papel e Embalagem SA reported a sharp decline in first-quarter earnings after production stoppages and higher energy purchases weighed on profitability, even as revenue held broadly stable.
Net revenue totaled BRL 409.8 million in the quarter, down 9.4% year-on-year when including discontinued operations, while adjusted EBITDA fell 17.1% to BRL 113.5 million. Net income dropped 66.9% to BRL 19.4 million.
Operational issues hit output
The company said scheduled shutdowns and technical problems at its turbo generator 4 (TG4) were key drivers behind the weaker performance. These events led to production losses, including 2,500 tons of flexible paper and 12,600 tons of rigid paper.
Lower self-generation of energy also forced Irani to increase purchases from third parties, further pressuring margins. The combined impact of shutdowns and the TG4 issue reduced EBITDA by BRL 26.8 million in the quarter.
Excluding these effects, the company said EBITDA would have risen 2.4% compared with the same period a year earlier.
Packaging segment shows mixed trends
In sustainable packaging, industry volumes rose 2.5% year-on-year, though Irani’s own volumes declined 3.8% as the company prioritized profitability over scale.
Average prices increased 5.5% over the same period, partially offsetting lower volumes.
In the paper segment, sales declined due to the scheduled stoppages, while prices for flexible papers edged lower amid a weaker U.S. dollar.
Leverage rises as EBITDA contracts
Net debt increased alongside the earnings decline, pushing leverage to 2.11 times net debt-to-EBITDA, compared with 1.99 times at the end of 2025.
The company’s cost of debt stood at 13.9% annually over the last twelve months, equivalent to CDI minus 0.8 percentage point.
Investments and dividends
Irani continues to invest in its Gaia platform, with BRL 271.4 million allocated to ongoing projects, including upgrades to paper machines and packaging capacity.
The company distributed BRL 0.58188 per share in dividends over the last twelve months, representing a yield of 8.1%.
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