Eucatex (EUCA4) Q1 2026 earnings summary

Executive summary

• Net revenue rose 5.2% year-over-year to R$783.8 million in 1Q26, with all segments showing positive performance despite a challenging macroeconomic environment and adverse currency effects.

• Recurring EBITDA increased 8.6% to R$196.9 million (25.1% margin), and recurring net income grew 37.3% to R$138.4 million; reported net income surged 94.2% to R$186.4 million, reflecting non-recurring gains.

• Export competitiveness improved after the US reduced tariffs from 50% to 10%, offsetting some negative exchange rate impacts.

Financial highlights

• Gross profit reached R$289.5 million, up 3.2% year-over-year, but gross margin declined by 0.7 p.p. to 36.9% due to exchange rate effects and higher cost mix.

• Recurring EBITDA margin improved by 0.8 p.p. to 25.1%.

• Net debt decreased 6.7% to R$561.8 million, with net debt/EBITDA at 0.7x.

• Investments totaled R$104.8 million in 1Q26, mainly for forestry and panel factories, with a planned increase to R$495.2 million for 2026 focused on forest expansion and plant modernization.

• Operating cash flow was R$173.1 million, down from R$521.5 million in the prior year.

Outlook and guidance

• Planned investments for 2026 are R$495.2 million, a 29.8% increase over 2025, focusing on forest expansion, plant modernization, and sustainability initiatives.

• Management expects continued positive domestic demand, supported by social programs and real wage increases, but inflationary pressures and delayed monetary easing may impact costs.

• Growth prospects in international markets are supported by the recent US tariff reduction and ongoing product mix improvements.