Arctic Paper (ARP) Q2 2025 earnings summary

Executive summary

• Q2 and H1 2025 were marked by weak demand, lower prices, and high raw material costs, leading to significant declines in net sales, EBITDA, and margins compared to 2024.

• The pulp segment was hit by unfavorable currency rates, high costs, and a major asset impairment, while the paper segment faced low demand and increased competition.

• A PLN 53 million (140 MSEK) asset write-off in Rottneros Group significantly impacted net results.

• Cost reduction and efficiency programs, including a successful share issue, are underway to restore competitiveness.

• New business areas in packaging and pellets are expected to support future growth and margins.

Financial highlights

• Q2 2025 net sales were PLN 833.5 million, nearly flat year-over-year; H1 2025 net sales were PLN 1,656 million, down 8.2% from H1 2024.

• Q2 2025 EBITDA was PLN 0.01 million, sharply down from PLN 70.4 million in Q2 2024; H1 2025 EBITDA was PLN 22.9 million, down from PLN 182.4 million in H1 2024.

• H1 2025 net loss was PLN 98.8 million versus a profit of PLN 105.7 million in H1 2024.

• Net debt to EBITDA at end of H1 2025 was 1.18x, up from 0.30x at end of H1 2024.

• Working capital initiatives and cost reduction programs are expected to generate PLN 35 million in cash flow and PLN 45–50 million in annual savings from 2026.

Outlook and guidance

• No rapid recovery is expected in Europe in the next quarter; management focuses on cost efficiency, competitiveness, and customer value.

• Cost reduction and efficiency programs are anticipated to yield PLN 45–50 million in annual savings from 2026.

• Revenues from new business areas (packaging, pellets) are projected to increase EBITDA by PLN 20 million in 2026.

• CapEx will be reduced after 2025, focusing on essential investments.