Rottneros Returns to Positive EBITDA in Q3 as Lower Wood Costs Boost Earnings

Rottneros AB reported a significant improvement in earnings for the third quarter of 2026, supported by lower variable costs, increased delivery volumes and stable demand in its prioritised market niches. The Swedish pulp producer recorded positive EBITDA of SEK 26 million, compared with a loss of SEK 21 million in the corresponding quarter last year.

Net turnover was SEK 570 million for July–September, slightly below the SEK 574 million reported a year earlier. Net income improved to a loss of SEK 15 million from a loss of SEK 52 million, while earnings per share improved to negative SEK 0.06 from negative SEK 0.20.

The results indicate an improvement in operating performance despite continued pressure on pulp prices, an uncertain global economic environment and higher electricity costs. Lower pulpwood prices and tighter cost management were central contributors to the stronger quarterly result.

Financial highlights: Third quarter 2026

• Net turnover: SEK 570 million, compared with SEK 574 million in Q3 2025.

• EBITDA: SEK 26 million, up from a loss of SEK 21 million.

• Operating result (EBIT): Loss of SEK 11 million, compared with a loss of SEK 58 million.

• Net income: Loss of SEK 15 million, compared with a loss of SEK 52 million.

• Earnings per share: Negative SEK 0.06, compared with negative SEK 0.20.

• Production: 79,300 tonnes, up from 72,900 tonnes.

• Deliveries: 77,500 tonnes, compared with 76,300 tonnes.

• Equity/assets ratio: 61% at September 30, 2026.

• Available liquidity: SEK 129 million at quarter-end.

Lower input costs underpin earnings recovery

Rottneros attributed the improvement in quarterly EBITDA primarily to favourable cost developments. Variable costs decreased by SEK 51 million compared with the third quarter of 2025, calculated on a cost-per-tonne basis. The reduction was mainly driven by lower pulpwood prices, following increased wood supply and softer demand.

The company also recorded a positive SEK 8 million contribution from the sale of emission allowances during the quarter. No comparable sales were recorded in the third quarter of 2025.

These benefits were partly offset by higher fixed costs, which increased by SEK 6 million year over year, largely due to maintenance-related effects at Vallvik Mill. Fuel costs also rose alongside higher global energy prices.

Electricity remained an important cost consideration. The Nordic system electricity price averaged SEK 0.83 per kilowatt-hour in the quarter, compared with SEK 0.40 a year earlier. Rottneros’ realised outcome from electricity price hedges was SEK 6 million, compared with zero in the prior-year quarter.

The company said its continued emphasis on cost-effectiveness, production availability and cash-flow improvement remains central to its operational approach.

Nine-month performance improves despite lower revenue

For January–September 2026, Rottneros recorded net turnover of SEK 1.804 billion, down from SEK 1.952 billion in the same period of 2025, a decline of approximately 8%.

Despite lower revenue, EBITDA improved to SEK 20 million from a loss of SEK 63 million. The operating result improved to a loss of SEK 91 million from a loss of SEK 312 million, while the net loss narrowed to SEK 91 million from SEK 267 million.

The comparison in operating profit also reflects a SEK 140 million impairment of non-current assets recorded at Rottneros Mill during the second quarter of 2025 amid weak market conditions for chemi-thermomechanical pulp (CTMP).

For the first nine months of 2026, variable costs decreased by SEK 179 million on a cost-per-tonne basis. Fixed costs fell by SEK 41 million, reflecting savings initiatives and reductions in personnel and other fixed expenses.

These improvements helped offset weaker sales prices, the effect of currency movements and lower revenue from certain other items. The company reported that average European net prices for northern bleached softwood kraft (NBSK) pulp, expressed in Swedish kronor, were 13% lower for the nine-month period than a year earlier.

Production increases as CTMP output strengthens

Total pulp production rose by approximately 9% year over year in the third quarter to 79,300 tonnes.

Sulphate pulp production at Vallvik Mill reached 58,100 tonnes, compared with 57,500 tonnes in the third quarter of 2025. CTMP production at Rottneros Mill increased to 21,200 tonnes from 15,400 tonnes.

The increase in CTMP output reflected improved demand that enabled the company to raise production, although volumes continued to be adjusted in response to market conditions and electricity prices. Rottneros Mill also underwent a four-week shutdown during the summer.

Total deliveries increased by 2% to 77,500 tonnes. Sulphate pulp deliveries were 55,800 tonnes, down from 58,300 tonnes, while CTMP deliveries rose to 21,700 tonnes from 18,000 tonnes.

For January–September, total production reached 252,500 tonnes, compared with 249,000 tonnes in the prior-year period. Deliveries increased to 252,100 tonnes from 250,000 tonnes.

The production mix reflects Rottneros’ ongoing efforts to align output with customer demand and profitability, particularly in specialised applications.

CEO highlights continued progress in a challenging environment

President and CEO Per Bjurbom said the business continued to move in the right direction despite an unsettled operating environment. He highlighted stable production, continued demand in the company’s selected niches and lower costs as important factors behind the improved quarterly earnings.

Bjurbom also pointed to the positive contribution from the stronger US dollar against the Swedish krona. The average exchange rate was approximately SEK 9.65 per US dollar in the third quarter, about 1% higher than in the same quarter of 2025.

Management’s priorities remain focused on improving cost efficiency, increasing production availability, reducing capital tied up in operations and strengthening cash flow. The company also sees longer-term potential in its niche strategy through closer engagement with customers and a deeper understanding of their product requirements.

Pulp markets remain mixed amid global oversupply

Rottneros described the pulp market as broadly stable but characterised by overcapacity and significant regional differences.

Global demand for market pulp declined by 2.7% through August 2026 compared with the corresponding period of 2025. Demand for softwood pulp fell by 2.3%, while demand for hardwood pulp declined by 3.3%. In contrast, demand for unbleached pulp increased by 3.1%.

Demand for CTMP was 4.5% below the previous year’s level through August. Global CTMP capacity utilisation was reported at 60%, compared with 84% for softwood pulp.

The company said customer demand in its prioritised niches remained generally stable during the third quarter. It also highlighted favourable conditions for unbleached chemical pulp in selected applications, including electrotechnical uses.

However, the company continues to face competitive pressure from additional global supply, including pulp from China, Indonesia and Brazil, as well as uncertainty associated with geopolitical developments and transport and energy costs.

European net prices for NBSK declined during the quarter from USD 710 to USD 695 per tonne, according to the market data cited in the report. Prices for bleached chemi-thermomechanical pulp remained broadly unchanged at around USD 450 per tonne.

Financial position and liquidity remain key priorities

At September 30, 2026, Rottneros reported an equity/assets ratio of 61%, above its long-term target of more than 50%.

Available liquidity totalled SEK 129 million, down from SEK 406 million at the end of the third quarter of 2025. Cash and cash equivalents stood at SEK 23 million, while interest-bearing liabilities amounted to SEK 479 million. Net debt reached SEK 456 million, compared with SEK 339 million at the end of 2025.

Operating cash flow was negative SEK 94 million for the first nine months, compared with negative SEK 70 million in the prior-year period. Cash flow after investments in non-current assets was negative SEK 117 million, compared with negative SEK 171 million a year earlier.

Investments in property, plant and equipment totalled SEK 23 million during the first nine months, down from SEK 102 million in the same period of 2025. For the full year, the company expects investment expenditure of approximately SEK 60 million, compared with SEK 166 million in 2025. Planned investments are intended primarily to maintain technical standards and strengthen production stability and availability.

The report also disclosed that the company had breached a financial covenant under its loan agreement as external conditions weakened profitability. The loan agreement was amended in March 2026 to introduce temporary liquidity and profitability covenants, which are scheduled to remain in effect until April 2027. The original debt-to-equity covenant is due to be reinstated from the second quarter of 2027.

The company’s focus on working capital, liquidity and cash flow therefore remains particularly important as it manages operating costs and planned maintenance.

Vallvik Mill maintenance shutdown expected to affect fourth-quarter earnings

Rottneros’ annual maintenance shutdown at Vallvik Mill is scheduled for the fourth quarter of 2026. The company estimates that a normal annual shutdown would have an income impact of approximately SEK 70 million to SEK 80 million compared with a quarter without such a shutdown. This estimate includes direct maintenance expenses and the indirect effect of lost production.

No annual maintenance shutdown is planned at Rottneros Mill in 2026, although the facility underwent a four-week shutdown during the summer.

The timing of the Vallvik shutdown is an important consideration when assessing quarterly performance, since maintenance costs and lost output can affect the period in which the shutdown occurs.

Specialised pulp and sustainable packaging support longer-term strategy

Rottneros produces and sells chemical pulp, including sulphate pulp and NBSK, as well as mechanical pulp in the form of CTMP. Its products serve specialised applications in packaging, filters, electrotechnical products and other industrial uses, with customers across Europe, Asia and North America.

The group is also developing its moulded-fibre packaging business. Rottneros and Arctic Paper established the jointly owned Kostrzyn Packaging company in Poland, which has invested in moulding and laminating equipment and is handling commercial production of moulded-fibre packaging. Rottneros Packaging’s operations in Sunne are focused on customer service and product development.

Rottneros has also been a co-owner of Blue Ocean Closures since 2023. The company is developing fibre-based closures using dry-forming technology, with the aim of replacing selected plastic packaging solutions.

Its long-term financial and sustainability ambitions include increasing pulp production to 415,000 tonnes by 2030, maintaining an equity/assets ratio above 50%, and achieving fossil-free production. The company also targets an electricity self-sufficiency rate above 50% by 2030; the reported rate for January–September 2026 was 47%.

Outlook: Cost discipline and cash generation remain central

Rottneros enters the final quarter of 2026 with improved earnings momentum but continued exposure to pulp-market pricing, energy costs, currency movements and global supply conditions.

Lower pulpwood prices and savings initiatives have strengthened the cost base, while demand in selected customer niches has remained stable. At the same time, lower revenue during the first nine months, negative operating cash flow and reduced available liquidity underline the importance of financial discipline.

The planned Vallvik Mill maintenance shutdown is expected to weigh on fourth-quarter performance, while the company continues to adjust production to market demand and profitability.

For Rottneros, sustaining the earnings improvement will depend on maintaining cost control, improving cash generation, protecting operational reliability and developing higher-value specialised pulp and fibre-based packaging applications.

About Rottneros AB

Rottneros AB is a Swedish pulp producer supplying chemical and mechanical pulp to specialised industrial markets. The group operates Vallvik Mill and Rottneros Mill and is developing fibre-based packaging solutions through its packaging activities and strategic partnerships. Its shares are listed on Nasdaq Stockholm.