Klabin (KLBN4) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered strong performance across all segments, driven by effective commercial strategies, diversified product portfolio, and ramp-up of new machines (PM27, PM28, Figueira), with integration of Arauco's assets boosting volumes and margins.

• Sales volume reached 995k tons, up 16% year-over-year, with strong results in pulp and paper; adjusted EBITDA rose 53% to R$2.052 billion, margin expanding to 41%.

• Net revenue rose 15% year-over-year to R$4.95 billion, driven by higher sales, price increases in short fiber pulp, and favorable FX.

• Net income was R$315 million, down 68% from 2Q23, mainly due to higher financial expenses and FX impacts.

• Logistics bottlenecks, especially in container exports, limited shipments, but recovery is expected in Q3.

Financial highlights

• Adjusted EBITDA was R$2.052 billion, margin 41%, up 10 p.p. year-over-year.

• Net revenue reached R$4.95 billion, up 15% year-over-year, with sales volume and pricing as key drivers.

• Total cash cost per ton dropped to R$2,890, down 11% year-over-year.

• Net debt stood at R$23.8 billion, with Net Debt/EBITDA at 3.2x (USD) and 2.6x (LTM), within policy limits.

• Dividend payout in the last 12 months totaled R$1.3 billion, with a 5.7% yield and R$410 million approved for 2Q24.

Outlook and guidance

• Management expects robust demand for pulp and packaging, with price increases in containerboard as logistics normalize.

• Q3 sales volume will be impacted by scheduled maintenance stoppages at key mills.

• Fluff market remains stable with positive price outlook, though volumes may dip temporarily due to stoppages.

• No new M&A or major capital projects planned; focus remains on deleveraging and maximizing returns from recent investments.

• The company is committed to sustainable value creation and maintaining leverage within policy parameters.