ENCE Energía y Celulosa (ENC) Q1 2026 earnings summary

Executive summary

• Q1 2026 was impacted by one-off events, including a strike at Navia and extreme weather, but strategic direction and full-year guidance remain unchanged.

• Strategic focus is on growth in higher-margin special pulp, local sourcing, cost efficiency, and expanding renewables EBITDA.

• Special pulp products accounted for 34% of pulp sales volume, up from 30% in 2025, with a target of over 62% by 2028.

• Renewables platform expansion continues, with strong project pipelines in industrial heating and biomethane, aiming to nearly triple EBITDA by 2030.

• Product diversification, cost reduction, and decarbonisation remain key strategic priorities, with significant investments ongoing.

Financial highlights

• Group consolidated revenues were €154 million in Q1 2026, down from €187 million in Q1 2025.

• Attributable net income was a loss of €18 million, compared to a profit of €2 million in Q1 2025.

• Group consolidated EBITDA was €1 million; pulp EBITDA was negative €1 million, renewables EBITDA was €3 million.

• Free cash flow for the quarter was negative €76 million, reflecting high capex concentration.

• Net debt stood at €462 million, with €209 million in cash at quarter-end.

Outlook and guidance

• Full-year CapEx guidance remains at €120 million, with most spending in 1H26 and a decrease expected in Q2 and H2 2026.

• Cash cost reduction initiatives target €30 per ton savings by 2027, with €15 per ton in 2026, supporting a cash cost guidance of €468 per ton.

• Special pulp share expected to reach close to 40% in 2026 and over 62% by 2028.

• Renewables platform expected to almost triple EBITDA contribution by 2030.

• Pulp price increases in Europe expected to benefit 2Q26 results.