Irani Reports Lower First-Quarter Revenue Following Scheduled Maintenance Shutdowns

Irani Papel e Embalagem SA reported net revenue of R$409.8 million in the first quarter of 2026, down 3.1% from the same period last year and 1.5% lower than the previous quarter, as scheduled maintenance shutdowns affected production and sales volumes.

The company said results were impacted by the temporary shutdown of Paper Machine 5 (MP#5), part of the Gaia XI Project, and the biannual inspection of the Power Boiler, which also required the stoppage of Paper Machine 1 (MP#1). The interventions had been disclosed to the market in November 2025.

According to André Camargo de Carvalho, Irani’s Director of Administration, Finance and Investor Relations, the operational impacts were anticipated in advance. He said the company expects production levels to recover quickly, supported by a projected 7% productivity increase following the refurbishment of MP#5.

A technical issue involving the transformer of turbo generator 4 (TG4) at the company’s Vargem Bonita, Santa Catarina paper mill also increased energy purchases from third parties during the quarter, adding pressure to operating costs. Irani said the issue had been resolved and operations were expected to normalize in May.

In the Sustainable Packaging segment, corrugated cardboard sales volume totaled 42,000 tonnes, down 3.8% year on year, while the Brazilian market expanded 2.5%, according to Empapel data. Average net prices rose 5.5% compared with the first quarter of 2025.

Within the Sustainable Packaging Paper segment, production fell 19.2% year on year to 62,600 tonnes, while sales declined 10.8% to 29,400 tonnes, reflecting the shutdowns of MP#5 and MP#1.

Adjusted EBITDA totaled R$113.5 million, down 17.1% from a year earlier, with a margin of 27.7%. Net income fell 66.9% to R$19.4 million during the quarter.

Irani also announced the approval of R$82.5 million in financing from Brazil’s National Bank for Economic and Social Development (BNDES) for the Gaia XI Project, with repayment terms of up to 20 years. The company said the funding would support modernization, operational efficiency, and innovation initiatives.

At the end of the quarter, Irani reported cash holdings of R$760.2 million. Leverage, measured by net debt to adjusted EBITDA, improved to 2.11 times from 2.21 times a year earlier, while return on invested capital reached 12.3%.