By Brazil Stock Guide – Klabin S.A. (KLBN11) posted a 34% drop in profit to R$478 million in the third quarter of 2025, hit by weaker pulp prices and a stronger real. Still, the company’s adjusted EBITDA rose 17% to R$2.1 billion, with a 39% margin, reflecting strong momentum in its packaging and paper businesses.
Net revenue climbed 9% to R$5.4 billion, supported by resilient demand for kraftliner and corrugated packaging across export-oriented sectors such as protein, fruit, and tobacco. Domestic sales also improved as the company benefited from price adjustments introduced in late 2024.
To reduce leverage and bolster liquidity, Klabin executed a series of cash-generating transactions, including a R$600 million real estate deal and land divestments from its forestry portfolio. Together with a free cash flow of R$699 million, these measures lifted total cash to R$9.7 billion and cut net debt to R$26.1 billion, equivalent to 3.6x EBITDA in U.S. dollars.
The forestry division was again a key contributor, with biological assets worth R$13.1 billion adding R$124 million to operating profit. Production efficiencies, along with the ramp-up of the Piracicaba II (Figueira) plant and the absence of maintenance shutdowns, helped reduce cash costs per ton by 8% year-on-year.
The company also reinforced its ESG standing by joining the Taskforce on Nature-related Financial Disclosures (TNFD) and publishing its first Nature Transition Plan, addressing biodiversity risks and transparency in sustainable finance.
Capital discipline and market positioning
During the first nine months of 2025, CAPEX totaled R$1.8 billion, down 29% from a year earlier, signaling the end of Klabin’s heavy-investment phase and a pivot toward capital efficiency. The company also tapped financially settled rural product notes (CPR-Fs) to extend maturities and lower borrowing costs, bringing its average cost of dollar-denominated debt to 5.3% per year.
In global markets, short-fiber pulp prices fell 9% in China and 12% in Europe, while the company’s long-fiber (fluff) segment — representing 41% of pulp revenue — maintained profitability thanks to stable demand in mature markets.
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