The 63.5% drop in the company’s profit Klabin (KLBN11) in the first quarter of this year (1Q24), to R$425.5 million in the annual comparison, was not enough to make BB Investimentos (BB-BI) stop looking at the company’s balance sheet in the paper and cellulose sector with good eyes. “Good performance across all segments leads to a balanced consolidated statement”, says the report published by the bank this Friday (26), one day after the release of the company’s results.
A series of factors caught the attention of analysts, who highlighted an improvement when analyzing the numbers from previous quarters of the Klabinin which only the pulp business stood out positively.
In the analysis, strategists point out that there was an increase of 4.7% in the company’s sales volume Klabin in 1Q24 compared to the same period of the previous year. Of particular note is the recovery in kraftliner sales, driven by the increase in cardboard volume due to the ramp-up of the MP28 machine, in addition to the strong pace of corrugated cardboard shipping.
However, says the bank, the Klabin’s net revenue recorded a drop of 8.3% compared to the previous year, impacted by lower pulp prices, as well as the appreciation of the real in relation to the dollar. The cash cost of production continued to decline, maintaining the trend of previous quarters.
Adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) reached R$1.7 billion, representing a 15% drop compared to the previous year, while the adjusted Ebitda margin was 37.3%, a reduction of three percentage points compared to the same period of the previous year, according to the bank’s analysis.
With regard to the capital structure, after new funding in the first quarter of 2024, the Klabin’s gross debt reached R$33 billion and net debt was R$21.3 billion, analysts note. “Financial leverage measured by the net debt/adjusted Ebitda indicator increased to 3.5x (compared to 3.2x in 4Q23), but remains within the parameters established in the company’s debt policy”, points out the report.
Another point draws BB-BI’s attention: the approval of the Klabin dividend distribution in the amount of R$330 million, with payment scheduled for May 16th this year. Furthermore, a capital increase of R$1.6 billion was approved for share bonuses, with the credit of 1 new share for every 10 shares held by shareholders, to be carried out on May 9th.
The bank’s report also highlights that, despite the expectation of resilient results in the coming quarters, it maintains its neutral recommendation for the Klabin due to the limited upside potential for the target price of R$24 by the end of this year, an increase of +2.8%, considering the risk of correction in pulp prices in the second half of 2024 after the opening of new plants and increasing global supply. Currently, BB-BI recommends shares at R$23.25.
Profit, revenue and Ebitda: check out Klabin’s performance in 1Q24
In the first quarter of this year (1Q24), the Klabin recorded a net profit of R$425.5 million, representing a drop of 63.5% compared to the same period of the previous year. This decline was mainly impacted by a less favorable financial result during the period.
The company’s revenues from the paper and cellulose sector reached R$4.43 billion between January and March, showing a drop of 8.3% compared to the same period in 2023. This decline mainly reflects the decrease in cellulose and pulp prices. kraftliner, in addition to the appreciation of the real in relation to other currencies.
The company’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) Klabin was R$1.65 billion in the first three months of 2024, which represents a drop of 14.9% compared to the previous year. The adjusted EBITDA margin also registered a decrease of three percentage points, reaching 37%.
On the other hand, the Klabin’s cash cost per ton saw a 9% reduction in one year, reaching US$2,984. This decline is mainly explained by the drop in sales expenses and variable costs, in addition to the dilution of fixed costs due to the increase in sales volume.
However, the company’s financial result was negative at R$378 million, reversing a positive result of R$58 million recorded in the same period of the previous year. This negative result is due to the increase in financial expenses and the greater effects of exchange rate variation.
Klabin recorded a free cash burn of R$454 million, due to the investments made and the increase in working capital. The company’s net debt at the end of March was R$21.3 billion, with leverage of 3.5 times Ebitda.
Klabin shares close trading lower one day after the release of 1Q24 results
Klabin closed trading this Friday (26), one day after releasing the company’s 1Q24 results, with shares trading at R$23.10 on the Ibovespa, a drop of 0.65% when compared to the previous day.
After reaching the highest high this year on the Stock Exchange, on April 9, the Klabin began to face successive drops in the trading session. But even though in the month of April the paper and cellulose company was down 7.76%, in the last twelve months the group registered an increase of 25.27% in its valuation.
