This article first appeared on GuruFocus .
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Net Revenue:BRL431 million in Q2 2026; up 1.6% YoY from BRL424 million and up 5.4% QoQ; continued operations (excluding Resins) up 4.4% YoY.
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Adjusted EBITDA:BRL131.633 million in Q2 2026; margin of 30.5%; up 8.2% YoY (continued and discontinued operations); continued operations EBITDA up 3.2% YoY.
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Adjusted EBITDA (ex-technical event):Would have been BRL136.123 million excluding the negative BRL4.490 million effect from the TG4 energy issue.
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Net Income:BRL30.928 million in Q2 2026; down 70.3% YoY from BRL70.526 million; up from BRL19 million in Q1 2026.
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Recurrent Net Profit:BRL7.235 million, down from BRL50 million, mainly due to biological asset effects and higher depreciation/exhaustion.
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Free Cash Flow Yield:18.7% over the last 12 months (ongoing and discontinued operations).
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Leverage:2.07x net debt/EBITDA in Q2 2026, resuming deleveraging.
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Cash Position:BRL833 million in cash; net debt of BRL1,074 million; gross debt of BRL1.9 billion.
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Debt Profile:99% local currency, 1% foreign currency; cost of debt 14% per year (CDI minus 0.7%); 21% short term, 79% long term.
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ROIC:12.5% in the quarter, up 0.2 percentage points, versus average debt cost of 9.2%.
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Dividends:BRL64.894 million paid in Q2 2026 (BRL0.28 per share); BRL110 million paid to shareholders in last 12 months (BRL0.47 per share); proposed distribution of BRL0.03438359 per share.
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Sustainable Packaging Segment:Market grew 3.5% YoY and 3.8% in square meters; 4.4% growth in semester and 4.7% in square meters; sales volume rose from 41,000 tonnes to 44,000 tonnes, up 4.9% QoQ in square meters.
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Paper for Packaging Segment:Total sales volume grew 3.2% YoY from 30.9 thousand tonnes to 31.9 thousand tonnes, and 8.9% QoQ.
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Prices:Up 1.3% QoQ in tonnes; down 1.9% in square meters; flexible packaging paper down 1.1% YoY (FX impact); rigid paper down 2.4% YoY but up 1.8% QoQ.
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Scrap Prices:Dropped 20% YoY; recovered 2.9% QoQ.
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CapEx / Investments:Gaia XII (Minas Gerais expansion) total investment of BRL514 million, BRL1 million invested so far; PCH Sao Luiz total investment of BRL125 million, 25% progress; Gaia X 90% completed.
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Funding Operation:BRL750 million raised with multiple banks; average cost of 1.15% per year; 5-year term; BRL758.6 million at CDI plus 1.84%; BRL591.4 million added to cash position.
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Share Buyback:605,100 ordinary shares repurchased, representing 6.19% of the approved program.
Release Date: July 31, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Net revenue grew 1.6% year-over-year to BRL431 million and 5.4% quarter-over-quarter, driven by volume recovery in sustainable packaging.
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Adjusted EBITDA increased 8.2% year-over-year to BRL131.6 million, with margin expanding to 30.5% from 28.6%.
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Leverage decreased to 2.07x net debt/EBITDA, with a robust cash position of BRL833 million and well-structured debt (only 1% in foreign currency).
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Successful BRL750 million funding operation with a 5-year term and reduced cost (CDI +1.15% to +1.84%), enhancing liquidity and extending debt maturity.
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Commitment to sustainability and innovation: first Brazilian company to disclose IFRS S1/S2 report, ongoing Gaia XII expansion project (BRL514 million), and PCH Sao Luiz hydroelectric project 25% complete.
Negative Points
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Net income dropped 70.3% year-over-year to BRL30.9 million, mainly due to non-recurring gains in the prior year and higher depreciation/exhaustion.
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Recurrent net profit fell sharply to BRL7.2 million from BRL50 million, impacted by non-cash biological asset effects and operational challenges.
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Price transfer challenges in packaging segment due to oversupply of KraftLiner and idle industry capacity, pressuring margins.
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Scrap price increases (up 2.9% quarter-over-quarter and 4% in July) pose cost pressure, with uncertainty on mitigation through price adjustments.
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Machine 5 shutdown in Q1 2026 and TG4 energy issues in Q2 (BRL4.49 million negative impact) disrupted operations and EBITDA.
Q & A Highlights
Q: Pedro Mello from Citibank asked about the company's strategy to gain market share in packaging while transferring costs. He wanted to know the expectations for price transfers in the second half of the year and if any specific segment is more or less receptive to these adjustments. A: Lindomar Lima de Souza, Packaging Business Director, explained that while there is significant idle capacity in the KraftLiner market, making price transfers a challenge, the company is focused on growing its volume in corrugated packaging. He noted that 75% of their business is concentrated in the food sector, particularly animal protein in the south, but did not identify a specific segment with more difficulty. The strategy is to continue working on price recovery in the third quarter while actively growing volume.
Q: Guilherme Nippes from XP Inc. asked for the volume and price expectations for the paper segment in the third quarter. He also inquired about the future dynamics of scrap prices, which had recently increased, and how the company could mitigate this cost pressure. A: Henrique Zugman, Director of Paper and Forest Business, stated that a price increase for flexible packaging is expected in the third quarter, while rigid paper sales should remain stable. CEO Odivan Cargnin added that while there is momentary pressure on scrap prices, the industry will likely compensate by transferring costs to customers, as is historical practice, provided that demand for corrugated paper remains strong.
Q: Marcelo from Itau asked for more detail on the main variables the company needs to feel confident to move forward with the "Neos" project, specifically whether it's related to market conditions or the company's capital structure. A: CEO Odivan Cargnin explained that the primary factor is the company's financial management policy, which sets a leverage limit of 2.5x EBITDA. He also emphasized the need for robust engineering, detailed market studies for plant locations, and careful risk assessment. He noted that while high interest rates are a consideration, the project could proceed if good funding lines are available and the risks are well-calculated.
Q: Bruno Oliveira, a shareholder, questioned the sustainability of the dividend policy, noting that the recurrent net profit would imply a payout exceeding 100%. He asked if the company plans to change the calculation reference, given the high volatility of biological assets. A: CEO Odivan Cargnin clarified that there are no plans to change the dividend policy. He explained that the sustainability is maintained because the calculation should also consider the non-cash effect of exhaustion (depletion), which is related to biological assets and reduces net profit. He stated that the exhaustion values are even higher than the biological asset gains, making the payout sustainable.
Q: A shareholder, Michael, asked two questions: first, if the company has any alerts or preparations for "Super El Nino," and second, if the conflict in the Middle East has affected the company's exports. A: Henrique Zugman, Director of Paper and Forest Business, stated the company is well-prepared for "Super El Nino" through micro-forestry planning, monitoring towers, and infrastructure investments. Regarding the Middle East conflict, he noted an initial drop in exports for one month due to truck stoppages, but operations have since fully normalized, albeit with higher freight costs.
Q: Lucas Oliveira asked for the company's opinion on the economic activity of its main clients, whether it is accelerating, decelerating, or stable, and what the perspectives are for new businesses. A: Lindomar Lima de Souza, Packaging Business Director, stated that the general perception is one of stability. He noted that while there is a natural seasonal drop in demand from the chemical segment, the main animal protein segment is stable and even shows signs of investment and expansion projects.
Q: Carolina from Frost Markets asked about the pressure on the national containerboard market, especially testliner, due to high costs and competition. She also inquired how the U.S. tax on paper for packaging might affect supply and demand in the next semester. A: CEO Odivan Cargnin explained that the U.S. tax has a small impact as export volumes to the U.S. are low. The bigger issue is the increased supply of containerboard in Brazil due to Chinese exports. He noted this scenario has already impacted their investment cycle, leading them to pivot the "Neos" project from virgin fiber to recycled paper, which has lower CapEx and risk.
Q: Shing asked for more information on the oscillations of the biological assets in the quarter. A: Henrique Zugman, Director of Paper and Forest Business, explained that the variation is due to an evaluation of the wood price, which has increased over the last few years. This revaluation positively impacted the value of the forest assets in the second quarter compared to the first.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
