Klabin (KLBN4) Q4 2023 earnings summary

Executive summary

• 4Q23 sales volume rose 4% YoY to 961k tons, while net revenue fell 11% to R$4.500bn and adjusted EBITDA excluding non-recurring effects fell 15% to R$1.620bn.

• FY2023 sales volume declined 5% to 3.666m tons; net revenue fell 10% to R$18.024bn and adjusted EBITDA excluding non-recurring effects fell 20% to R$6.259bn.

• Lower cash costs and efficiency gains partly offset lower revenue; PM28 ramp-up and the Caetê forestry acquisition marked strategic milestones.

Financial highlights

• Adjusted EBITDA margin excluding non-recurring effects was 36% in 4Q23 versus 37% in 4Q22, and 35% for FY2023 versus 39% in 2022.

• Net income was R$370m in 4Q23 versus R$790m in 4Q22; FY2023 net income was R$2.847bn versus R$4.689bn in 2022.

• 4Q23 COGS was R$2.229bn, down 6% YoY; COGS per ton declined 9% to R$2,322, aided by efficiency gains and higher volume.

• FY2023 adjusted EBITDA by segment: Paper & Packaging 64%; Pulp 36%.

Outlook and guidance

• MP28 production ramp-up targets 350k tons in 2024, 400k in 2025, 440k in 2026 and 460k in 2027; 70% of coated-board output is expected in 2024 and 100% from 2025.

• 2024 priorities include completing projects underway and continued focus on operating efficiency and safety; planned maintenance stoppages are scheduled at Ortigueira, Monte Alegre and Correia Pinto.

• Caetê Project payment of US$1.160bn was expected in 2Q24, subject to customary conditions; the acquisition is expected to reduce wood-haulage distances and future investment needs.