Norske Skog Reports Positive Packaging EBITDA and Record Containerboard Deliveries in Q2 2026

Norske Skog reported positive earnings from its packaging paper business and record recycled containerboard deliveries during the second quarter of 2026, marking a milestone in the company's strategic transition toward packaging grades. The group's overall financial performance, however, was affected by weaker publication paper markets and the strengthening of the Norwegian krone.

Norske Skog operates four mills across Europe with an annual production capacity of approximately 0.8 million tonnes of packaging paper and 1.2 million tonnes of publication paper, producing recycled containerboard, newsprint and magazine paper. The company employs approximately 1,650 people.

The company reported total operating income of NOK 2.584 billion in the second quarter, compared with NOK 2.877 billion in the previous quarter. EBITDA totalled NOK 73 million, down from NOK 451 million in the first quarter, while the EBITDA margin declined to 2.8% from 15.7%. Norske Skog recorded a pre-tax loss of NOK 163 million, compared with a profit of NOK 236 million in the previous quarter. Despite the weaker earnings, net interest-bearing debt decreased to NOK 4.361 billion from NOK 4.502 billion. The company said the stronger Norwegian krone negatively affected quarterly results, while profitability improvement initiatives across all mills are beginning to generate benefits and working capital remained efficiently managed.

A key highlight of the quarter was the packaging paper segment, which achieved record recycled containerboard deliveries of 122,000 tonnes and delivered a positive EBITDA margin for the first time following the company's conversion investments. Segment operating income increased to NOK 557 million, while EBITDA improved to NOK 1 million, compared with a loss of NOK 28 million in the previous quarter. Production reached 126,000 tonnes, reflecting continued progress in the ramp-up of new packaging capacity.

At Norske Skog Bruck PM3 in Austria, the company reported EBITDA of NOK 25 million, supported by higher recycled containerboard prices in line with market developments. Energy and raw material costs remained broadly stable compared with the previous quarter, although higher maintenance activity increased fixed costs.

At Norske Skog Golbey PM1 in France, the new recycled containerboard machine produced approximately 73,000 tonnes and delivered around 70,000 tonnes during the quarter, reporting EBITDA of NOK -24 million while continuing its operational ramp-up. Norske Skog said all announced recycled containerboard price increases had been fully implemented by the end of June 2026. Remaining gross capital expenditure for the project is approximately EUR 5 million, and the company continues to expect full utilisation of Golbey PM1 during the first half of 2027. In addition, Golbey is expected to receive energy certificates with an estimated market value of approximately EUR 30 million in the second quarter of 2027 and approximately EUR 45 million in the first quarter of 2029, while contracted minimum values remain unchanged.

The publication paper segment generated operating income of NOK 1.931 billion and EBITDA of NOK 86 million, compared with NOK 477 million in the previous quarter. The decline mainly reflected the absence of the NOK 320 million recognised in the first quarter under the agreement with Norsk Nukleær Dekommisjonering (NND) at Norske Skog Saugbrugs. Production totalled 275,000 tonnes, while deliveries increased to 280,000 tonnes. Lower pulpwood prices reduced raw material costs, although annual salary adjustments and higher maintenance expenses increased fixed operating costs.

Cash generation strengthened during the quarter, with net cash flow from operating activities improving to NOK 273 million, compared with an outflow of NOK 307 million in the previous quarter. The improvement was primarily driven by a NOK 300 million reduction in working capital following receipt of annual energy refunds in Norway and France. Capital expenditure totalled NOK 106 million, mainly relating to the Golbey packaging paper project as well as the book paper project and PulpFlex project at Norske Skog Skogn.

The company also strengthened its liquidity during the quarter by receiving approximately NOK 470 million in energy refunds. Norske Skog expects liquidity to improve further during the third quarter through proceeds of approximately NOK 780 million from the NND transaction, of which around NOK 50 million will be allocated to dismantling costs.

Looking ahead, Norske Skog said it will continue to increase market share despite uncertain market conditions while maintaining a strong focus on cost reductions, operational efficiency and working capital discipline. The company is continuing to evaluate profitable diversification projects across all mills, with particular emphasis on completing the ramp-up of Golbey PM1 and reaching full utilisation during the first half of 2027. Norske Skog also plans to determine the future direction of its Saugbrugs mill during the second half of 2026 while pursuing initiatives to strengthen its financial performance and long-term competitiveness.