Borregaard ASA

Borregaard reported second-quarter operating revenues up 3% year over year, with EBITDA of NOK 515 million versus NOK 522 million in Q2 2025. EBITDA margin was 24.4%, about 1 percentage point lower year over year but 3 percentage points higher than Q1. Reported EPS was -NOK 1.27, reflecting a NOK 337 million impairment on the Alginor investment and a NOK 30 million accrual for Sarpsborg site ground stabilization; adjusted EPS was NOK 2.35, and adjusted EPS year to date was NOK 4.17. By segment, BioSolutions EBITDA was NOK 306 million, BioMaterials EBITDA was NOK 151 million, and Fine Chemicals EBITDA was NOK 58 million. Cash flow from operating activities was NOK 695 million, investments were NOK 194 million, and net interest-bearing debt increased by NOK 16 million; the equity ratio was 59% and leverage was 1.2. For the full year, Borregaard now expects BioSolutions sales volume of approximately 335,000 tons, BioMaterials sales volume to exceed 160,000 tons, BioSolutions Q3 volume around 85,000 tons, and BioMaterials Q3 volume around 40,000 tons. Net currency impact for the full year is now estimated at about NOK 45 million positive versus 2025, with Q3 estimated at about NOK 10 million positive versus last year.

The CEO emphasized that the quarter showed the resilience of Borregaard’s diversified model, with solid operational performance across the businesses. He highlighted stronger BioSolutions specialty sales versus Q1, record production in BioMaterials, and another solid quarter in Fine Chemicals, while noting that product mix remains less favorable than last year in some areas. He also framed the outlook as one of cautious optimism, citing selective price actions, good demand in specialized grades, and a cost improvement program to protect profitability in a more demanding operating environment.

The CFO focused on the financial bridge: operating revenues rose 3%, EBITDA was NOK 515 million, and the EBITDA margin was 24.4%. He said wood costs were about 15% lower year over year, but this was more than offset by higher energy, logistics, and chemical costs tied partly to the Middle East conflict, leaving a net negative raw material, energy, and logistics impact of about NOK 40 million. He also detailed the non-cash Alginor impairment, the NOK 30 million Sarpsborg accrual, strong operating cash flow of NOK 695 million, capex of NOK 194 million, and a still-strong balance sheet with 59% equity ratio and 1.2 leverage.

Analysts pressed management on BioSolutions agriculture demand, the lower full-year BioSolutions volume guide, raw material and energy costs into Q3, Chinese competition in ethers, the timing of the debottlenecking project benefit, and pricing into the second half. Management said agri demand improved versus Q1 but crop protection still faces pressure from the Middle East-related situation, and the lower BioSolutions guide mainly reflects normal seasonality plus Q1 volumes that likely cannot be recovered. On costs, they said sulfur and caustic are expected to rise in Q3 and energy remains uncertain, while selective price adjustments and surcharges are helping in BioMaterials and BioSolutions, with only a moderate pricing impact expected in Q3 and H2.