By Brazil Stock Guide – Klabin (KLBN11) posted net income of R$ 387 million in the second quarter of 2026, down 34% from a year earlier, as a stronger Brazilian real and higher production costs weighed on its export-oriented pulp business.
Adjusted EBITDA reached R$ 1.96 billion, a 4% decline, while net revenue fell 2% to R$ 5.15 billion. The appreciation of the real reduced the value of dollar-denominated exports when translated into local currency, offsetting part of the recovery in pulp prices and price increases in packaging.
The sequential comparison was more encouraging. EBITDA rose 18% from the first quarter, and the company returned to profit after posting a R$ 497 million net loss in the first three months of the year. The improvement suggests that earnings began to normalize after accounting and financial effects had depressed the previous quarter.
Performance varied across Klabin’s businesses. Pulp remained the main source of pressure, reflecting the stronger real and higher production costs. Paper and packaging provided a counterweight, supported by higher paperboard volumes, price increases in corrugated boxes and the gradual ramp-up of the MP27 and MP28 machines.
That mix highlights one of Klabin’s key strengths: its integrated portfolio spanning forestry, pulp, paper and packaging. Diversification did not prevent earnings from declining, but it helped contain the impact of a weaker pulp contribution on the group’s overall performance.
Cost discipline also provided some support. Total cash cost per ton was broadly stable from a year earlier despite pressure from freight and raw materials, as efficiency measures and the monetization of surplus forestry assets helped cushion the increase.
Free cash flow was negative during the quarter, reflecting investment spending, seasonal interest payments and working-capital needs. Klabin built inventories ahead of a scheduled maintenance shutdown and increased its wood reserves to mitigate potential disruptions from El Niño, indicating that part of the cash consumption was linked to operational preparation rather than a deterioration in underlying demand.
Leverage measured in dollars declined to 3.2 times adjusted EBITDA, from 3.3 times in the previous quarter and 3.9 times a year earlier. The reduction marks further progress in the company’s deleveraging process, although cash generation remains an important issue for investors given the still-elevated debt load.
Klabin also approved a program to repurchase as many as 31.25 million units over 18 months. The securities acquired will be canceled, reducing the number outstanding. The move signals management’s confidence in the company’s fundamentals and suggests Klabin believes it can balance gradual deleveraging with a more active approach to shareholder returns.
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