May 7, 2001

www.klabin.com.br

First quarter results 2001

Summary
Sales volume totaled 435 thousands tons, 5% lower than the 4th Q00. Average price fell 6% compared to the 4th Q00, reflecting a change in the mix of products sold. EBITDA was R$ 178 million, similar to the 4th Q00 in spite of the fall in sales volume and prices. Improvement in EBITDA margin from 31% in the 4th Q00 to 33% in the 1st Q01. Decline of R$ 106 million in net debt compared to December 2000. Capital expenditures of R$ 64 million, R$ 36 million of which dedicated to the Klabin Riocell expansion project. Sales of forest assets amounting to R$ 88 million. Issuance of 154.5 million preferred shares with a corresponding increase in the capital stock of R$ 278 million on January 4 2001. 53% self sufficient in electric energy needs.

Highlights
R$ Million Average Price (R$/ton) Sales Volume (1,000 ton) Net Revenue Gross Profit Gross Margin EBIT Net Profit (Loss) EBITDA EBITDA margin (%) Equity Net Debt Capitalization Net Debt / EBITDA (x times) Net Debt / Capitalization Depreciation / Amortization Capex without Acquisitions 1Q/01 1.260 435 536 217 40% 122 (80) 178 33% 1.428 2.369 3.856 3,3 61% 55 64 4Q/00 1.344 457 572 235 41% 124 (35) 178 31% 1.228 2.475 3.762 3,4 66% 55 67 1Q/00 1.333 319 408 182 45% 106 38 144 35% 1.006 1.323 2.582 2,3 51% 38 59 QoQ -6% -5% -6% -8% -2%

-4%

The results of Igaras, a company acquired on October 3 2000, are consolidated since the 4th Q00, thus making the figures recorded in the 1st Q01 not comparable with those in the 1st Q00.

Quarterly Release May 7, 2001

Economic and Financial Performance

Sales and Net Revenue
The results of Igaras, a company acquired on October 3 2000, are consolidated since the 4th Q00, thus making the figures recorded in the 1st Q01 not comparable with those in the 1st Q00. In order to obtain a better understanding of the Companys performance, the comparisons made in this press release, unless otherwise stated, relate to figures for the 4th Q00. Net revenue was R$ 536 million, 6% lower quarter over quarter. Sales volume in the 1st Q01 totaled 435 thousands tons, 5% lower quarter over quarter. Corrugated boxes posted a 5% decline while sales volumes for newsprint weakened by 17%, tissue by 13% and pulp by 16%. On the other hand, there was an increase of 5% in packaging paper and 6% in sacks and envelopes. In the packaging and tissue segments, sales maintained their normal seasonal trend, with a volume reduction in the first quarter following higher year-end sales. In the pulp segment, the lower sales volume is in line with the segment trend, with producers promoting shutdowns to control inventories. The packaging segment, which includes packaging paper, corrugated boxes and multiwall sacks, accounted for 54% of sales volume and 48% of net revenue in the 1st Q00. Following the acquisition of Igaras, the packaging segment increased its share of the total to 65% of volume and 54% of net revenue in the 4th Q00, further increasing to 70% and 61% respectively in this last quarter.

Volume 1st Q01

Newsprint/ Printing 7% Sacks/ Envelopes 7%

Net Revenue 1st Q01

Newsprint/ Pulp Printing 8% Others 14% 1% Sacks/ Envelopes 9%

Pulp 16% Tissue 7%

Tissue 16%

Packaging Paper 33%

Corrugated Boxes 30%

Packaging Paper 26%

Corrugated Boxes 26%

Quarterly Release May 7, 2001

The domestic market accounted for 70% of net revenue and 64% of total volume, a breakdown that is basically unchanged in relation to the 4th Q00 (70% and 67% respectively).
Sales Volume
Net Revenue

33%

36%

30%

30%

67%

64%

70%

70%

4thQ 00

1stQ 01 Exports

4thQ 00

1stQ 01 Exports

Domestic Market

Domestic Market

The average price in the 1st Q01 was R$ 1,260 per ton, a quarter over quarter decline of 6%, mainly due to the mix of products sold. In the packaging segment, higher volume of kraftliner sales, which has lower prices, impacted overall prices. In the corrugated containers business segment, still very fragmented, prices remained well below international levels. The pulp segment registered a decrease in prices, in line with international trends.

Gross Profit
As a consequence of sales and price reductions, gross profit was R$ 217 million in the period, down by 8% compared to the 4th Q00. The gross profit margin, nevertheless, remained almost stable at around 40%.

Operating Profit
Operating profit before financial results was R$ 122 million, similar to the result obtained in 4th Q00. Sales expenses, as a percentage of net sales, decreased from 12% in the 4th Q00 to 10% in the 1st Q01. General and administrative expenses remained stable at 8% of net revenue. General, administrative and selling expenses totaled R$ 94 million in the 1st Q01, compared to R$ 112 million in the 4th Q00.

Quarterly Release May 7, 2001

EBITDA
R$ Million EBITDA Margin
33% 35% 33%
40% 30%

200 150 100

35%

31%

144
50 0

145

164

178

178

20% 10% 0%

1Q 00

2Q 00
EBITDA

3Q 00

4Q 00

1Q 01

EBITDA Margin

Cash generation, measured by EBITDA, totaled R$ 178 million, in line with the 4th Q00. In a scenario of lower volumes and prices, the maintenance of EBITDA level reflects an expenses reduction effort.

Net Profit
The company reported a net loss of R$ 80 million, mostly impacted by financial expenses accounted as a result of the 10.5% local currency devaluation against the dollar in the 1st Q01.

Financial Results and Debt

Financial expenses totaled R$ 250 million, R$ 158 million of which were foreign exchange losses. The company reported a net debt of R$ 2,369 million, or 61% of capitalization (66% in the 4th Q00). In comparison with December 2000, gross debt fell by R$ 151 million and net debt by R$ 106 million. The companys debt tenor is mostly allocated in the long term (72%), with maturities extending out to 2008. Foreign currency denominated debt was reduced by 5% compared to 4th Q00, decreasing from US$ 840 million to US$ 800 million in the 1st Q01. Klabin is firmly committed to reduce its debt level, and intends to use its operational cash generation and the sale of some assets for this purpose, such as the sale of land and forests of Klabin Riocell and Klabin Igaras.

Quarterly Release May 7, 2001

Debt
December 31, 2000 Local Foreign Total Currency Currency 435 549 984 520 1.123 1.643 955 1.672 2.627 (152) 2.475 March 31, 2001 Local Foreign Currency Currency 131 614 745 554 1.177 1.731

(R$ million) Short Term Long Term GROSS DEBT Cash and Short Term Investments NET DEBT

Total 685 1.791 2.476 (107) 2.369

Capital Expenditures
Capital expenditures totaled R$ 64 million in 1st Q01, of which R$ 36 million for the Klabin Riocell expansion project. Klabin is maintaining a rigid control over its capital expenditures, without jeopardizing the preventive maintenance of its plants and mills.

Relevant Events
Downtime at Klabin Riocell

By the end of March, Klabin Riocell took production downtime for an eleven-day period in order to reduce its inventories, thereby contributing to a better pulp supply. Sale of forest assets

During the first quarter, the company sold an excess of forestry assets as part of its continuing strategy of focusing investments. The amount of R$ 88 million received from the divestiture was used entirely to pay down debt. The assets involved 9,700 hectares of forests and 13,000 hectares of land in the State of Rio Grande do Sul and 5,400 hectares of land and forests in the State of So Paulo.

Quarterly Release May 7, 2001

Electric power Klabin generates an average of 53% of all its electric energy needs. Electricity is acquired from third parties per region as follows: South 62%, Southeast 29% and Northeast 9%. The pulp mill of Klabin Bacell generates 80% of all its electric energy needs. Klabin Riocell has already achieved self-sufficiency and when the expansion project is concluded in December 2001, the plant will be in a position to generate surpluses for sale. The major paper and cardboard mills are located in the South of Brazil, therefore unlikely to be affected by electricity rationing. The mills in Otaclio Costa and Correia Pinto, in the State of Santa Catarina, purchase about 30% of all their electric energy needs and the mill in Telmaco Borba, State of Paran, buys 45% of its electricity, mainly for the production of newsprint. The companys corrugated containers and tissue-manufacturing plants, as well as the recycled paper units, are concentrated in the Southeast and Northeast regions, and are therefore subject to rationing. Eventual shortfalls in electricity supply can be minimized by switching production among the plants in these regions and in the south of Brazil thus guaranteeing supply to the market.

Capital Markets
Klabins preferred shares were traded on all business days of the So Paulo Stock Exchange (Bovespa) in the 1st Q01. The share price reported a depreciation of 31% against an 8% decline in the Ibovespa. In all, 3,621 transactions were registered involving 32.4 million preferred shares, equivalent to an average daily volume of R$ 723,000.
Share Performance at Ibovespa Base: 12/28/00 = 100
130 120

Ibovespa
110 100 90 80 70

Klabin

The Argentinean crisis and the devaluation of 60 50 the real against the dollar affected investors perceptions. In the short term, the foreign exchange rate has a negative effect on dollar denominated debt. However, the devaluation of the real is positive for the company as 50% of its revenues are dollar linked, due to exports and sales in the domestic market of products with US dollar denominated prices.

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Quarterly Release May 7, 2001

Capital Stock On January 4 2001, the companys capital stock was increased by R$ 278 million, following the issuance of 154.5 million preferred shares, totaling R$ 1,206.6 million. Capital stock currently comprises 917.7 million shares, of which 316.9 million are common and 600.8 million are preferred shares.

Common
Klabin Irmos 59.4% Foreign Investors 13.9% Brazilian Investors 20.6%

Preferred
Institucional Investors 16.1% BNDESPAR 31.7%

Monteiro Aranha 20.0%

Brazilian Investors 38.3%

Ronald Seckelmann, CFO and Investor Relations Director Luiz Marciano Candalaft, Investor Relations Officer Phone: (55.11) 3225-4045 E-mail: marciano@klabin.com.br

Alex Cancio Phone: (1.212) 701-1973 - New York E-mail: alex.cancio@thomsonir.com

Annex 1 Consolidated Income Statement Brazilian Corporate Law

(Thousands of R$)
Net Revenue Cost of Sales Gross Profit Selling Expenses General & Administrative Expenses Other Revenues (Expenses) TOTAL Operating Expenses Operating Result (before Fin. Results) Financial Expenses Financial Revenues Operating Result Non Operating Revenues (Expenses) Net Income (Loss) before Inc. Tax and Soc. Contrib. Income Tax and Soc. Contrib. Minority Interest Net Income (Loss) Amortization / Depreciation EBITDA

Results 4Q/00 1Q/01

571.491 (336.157) 235.334 (65.939) (47.480) 1.745 (111.674) 123.660 (190.878) 15.503 (51.715) 6.045 (45.670) 15.709 (4.753) (34.714) 54.717 178.377 535.926 (319.197) 216.729 (52.550) (41.741) (379) (94.670) 122.059 (250.176) 16.941 (111.176) 2.118 (109.058) 29.593 (283) (79.748) 55.456 177.543

Change
(35.565) (16.960) (18.605) (13.389) (5.739) 2.124 (17.004) (1.601) 59.298 1.438 (59.461) (3.927) (63.388) 13.884 (4.470) (45.034) 739 (834)

% of Net Revenue 4Q/00 1Q/01

100,0% 58,8% 41,2% 11,5% 8,3% 0,3% 19,5% 21,6% 33,4% 2,7% 9,0% 1,1% 8,0% 2,7% 0,8% 6,1% 9,6% 31,2% 100,0% 59,6% 40,4% 9,8% 7,8% 0,1% 17,7% 22,8% 46,7% 3,2% 20,7% 0,4% 20,3% 5,5% 0,1% 14,9% 10,3% 33,1%
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Annex 2 Consolidated Balance Sheet Brazilian Corporate Law (Thousands of R$)

Assets
Current Cash and banks Short-term investiments Receivables Inventories Recoverable taxes and contributions Other receivables Dec. 31-00 Mar. 31-01 832,036 821,706 24,382 30,210 127,470 76,615 301,305 287,358 236,230 254,011 82,345 110,352 60,304 63,160

Liabilities and Shareholder's Equity

Current Loans and financing Debentures Suppliers Income tax and social contribution Taxes payable Payroll provisions Other accounts payable Long-Term Loans and financing Debentures Other accounts payable Results for Future Fiscal Years Minority Interests Shareholders' Equity Capital Capital reserves Revaluation reserve Profit reserve Retained Earnings Total

Dec. 31-00 Mar. 31-01 1,247,717 988,368 952,094 678,077 2,822 7,177 157,956 166,182 33,425 4,991 25,711 64,675 37,792 31,864 37,917 35,402 1,798,051 1,556,553 115,300 126,198 23,507 58,892 1,228,352 928,444 111,604 102,988 85,316 0 4,356,519 1,925,731 1,675,776 115,300 134,655 20,895 59,047 1,427,914 1,206,589 112,785 102,110 85,300 (78,870) 4,421,955

Long-Term Deferred income tax and soc. contrib. Taxes to compensate Recoverable taxes Other receivables Permanent Other investiments Property, plant & equipment, net Deferred charges

211,570 83,946 25,221 52,568 49,835 3,312,913 609,193 2,578,416 125,304

250,713 117,094 27,581 55,979 50,059 3,349,536 639,040 2,590,637 119,859

Total

4,356,519

4,421,955

Annex 3 Sales Volume and Average Price Consolidated 100%

1,000 t Newsprint Printing Packaging Tissue Pulp Klabin Riocell Klabin Bacell Corrugated Boxes Sacks/ Envelopes Others Total Average Price (R$/t) 1st Q 27 11 74 34 72 56 16 72 26 3 319 1,333 2nd Q 26 10 62 37 92 64 28 76 27 4 334 1,400 2000 3rd Q 28 10 81 38 87 67 20 89 28 3 364 1,447 4th Q 29 9 136 35 83 49 34 135 27 3 457 1,344 Total 110 40 353 144 334 236 98 372 108 13 1,474 1,380 2001 1st Q 23 9 144 31 70 49 21 129 28 1 435 1,260
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