The Navigator Company Reports 21% EBITDA Growth and 85% Increase in Net Profit in Q2 2026

The Navigator Company reported improved financial and operational performance in the second quarter of 2026, with EBITDA increasing 21% quarter-on-quarter to €79 million and net profit rising 85% to €32 million as business activity recovered following operational disruptions caused by storms earlier in the year. Turnover reached €442 million, up 4% from the previous quarter, while the EBITDA margin improved by 2.6 percentage points to 18%.

The company attributed the stronger results to recovering volumes and prices across its core businesses and the increasing contribution from its Packaging and Tissue divisions, which together accounted for more than 30% of turnover. Despite continued economic and geopolitical uncertainty, including higher raw material, energy and logistics costs linked to tensions in the Middle East, Navigator said it improved profitability through operational execution and adaptability.

To address rising operating costs, Navigator has launched a variable cost reduction programme expected to offset nearly half of the cost impact during 2026. The initiative is projected to contribute approximately €28 million annually from 2027 onwards. During the first half of 2026, the company invested €127 million, including around €72 million in environmental and sustainability projects, as part of a strategic investment cycle focused on productivity, resource efficiency and long-term competitiveness.

Navigator noted that integrating new technologies and industrial projects temporarily reduced available pulp and paper volumes and increased natural gas consumption and CO₂ allowance requirements. Low inventory levels also limited the company's ability to mitigate production disruptions caused by storms, scheduled maintenance and investment implementation. Restoring normal production levels remains an operational priority for the second half of the year.

For the first six months of 2026, turnover totalled €869 million, EBITDA reached €143 million and net profit amounted to €49 million. The company said it remains focused on innovation, operational efficiency and sustainable industrial solutions to support future growth within the forest-based bioeconomy.

The Printing and Writing Paper business recorded a gradual recovery in volumes and prices during the second quarter. While global apparent demand for printing and writing paper declined by 0.8% through April, uncoated woodfree paper demand increased 0.4%. Navigator operated at around 90% capacity during the first half of the year, above the European industry average of 86%. The company also implemented European paper price increases that translated into a €30 rise, exceeding the market benchmark increase of around €10. Average UWF prices increased by €87 in June compared with December.

Navigator's Tissue business continued to expand internationally and accounted for approximately one-quarter of group turnover. Tissue sales volumes remained in line with the first quarter while average prices increased 2%. The company said competitive conditions in the UK affected performance as it continues a project to rationalise its industrial footprint there, with completion expected during the first half of 2027. A new tissue machine scheduled to start up in 2028 is intended to improve profitability. During the first half of 2026, 80% of tissue sales volumes were generated outside Portugal, compared with 54% in 2022, with Spain, the UK and France representing the largest markets.

Navigator also strengthened its premium tissue portfolio through the launch of a new Don Limpio branded range in Iberia under licence from Procter & Gamble, while preparing a Mr Propre branded range for commercial launch in France in the coming months.

The Packaging division maintained strong growth, generating €53 million in first-half turnover. Sales volumes increased by nearly 50%, driven by growth in low-grammage packaging grades, while average prices in June were approximately 13% higher than in December. The segment accounted for more than 6% of group sales during the first half of the year, with 70% of sales generated in Europe and the remainder in overseas markets including the Americas and the Middle East and North Africa.

The pulp market continued its recovery during the first half of 2026. The PIX BHKP benchmark in Europe reached US$1,409 per tonne, around 27% higher than previously, while the benchmark price in China rose around 7% to US$605 per tonne. Navigator sold 111,000 tonnes of pulp during the half-year, with volumes constrained by operational factors and maintenance shutdowns at its Setúbal and Aveiro mills.

Investment remained centred on modernisation and decarbonisation. Navigator commissioned a new oxygen delignification system at its Setúbal Industrial Complex following an investment of more than €40 million, improving operational performance while reducing chemical consumption during pulp bleaching and enhancing environmental performance.

As of 30 June 2026, net debt stood at €693.2 million, €10 million lower than at the end of December. The company reported €363 million in available undrawn long-term credit facilities, with 95% of total debt classified as sustainable and 60% at fixed interest rates or hedged.

Looking ahead, Navigator expects average pulp prices during 2026 to remain above 2025 levels despite signs of adjustment in China during July. The company has implemented paper price increases of between 4% and 8% in its main markets and expects average selling prices to increase further in the third quarter. It also expects continued strong demand in packaging and forecasts tissue demand growth of around 0.8% in Europe and 1.6% globally during 2026. Navigator said it will continue implementing programmes focused on efficiency, cost reduction, product engineering, industrial innovation and sustainable value creation while maintaining product quality and customer service.