Borregaard’s Q2 Results: Core Operations Thrive Amidst One-Off Charges

SARPSBORG, NORWAY – July 16, 2026 – Borregaard ASA today announced its second-quarter 2026 financial results, revealing a story of robust operational strength and resilience in a complex global market. The advanced biorefining company posted increased operating revenues of NOK 2,114 million and a solid EBITDA of NOK 515 million. However, the bottom line was significantly impacted by two substantial, non-recurring financial items, leading to a reported profit before tax of NOK -45 million.

Despite the headline loss, the underlying performance paints a picture of a healthy and adaptable business. The results underscore the effectiveness of the company’s diversified business model, which continues to deliver value even when faced with market volatility and strategic financial adjustments. CEO Tom Erik Foss-Jacobsen captured this sentiment, stating, “We are pleased to deliver a strong result in a challenging business environment. The quarter once again demonstrates the resilience of Borregaard’s highly diversified portfolio and broad customer base.”

A Tale of Two Ledgers: Operational Strength vs. Financial Adjustments

A deeper look into the Q2 figures reveals a clear distinction between the company's core operational profitability and the impact of specific financial charges. The reported EBITDA of NOK 515 million, while slightly down from NOK 522 million in the same period last year, remains strong and indicates stable underlying performance. This stability is particularly noteworthy given the external pressures faced during the quarter.

When the non-recurring charges are excluded, the company's performance is even more impressive. The two main items affecting the profit before tax were a NOK 337 million impairment related to an investment in Alginor ASA and NOK 30 million in costs for ground stabilisation measures at the Sarpsborg site. Factoring these out, Borregaard’s earnings per share (EPS) would have been NOK 2.35. This adjusted figure, compared to the reported EPS of NOK -1.27, provides a more accurate reflection of the quarter's operational earnings power and stands favorably against the NOK 2.56 EPS from Q2 2025.

This operational success was built on a foundation of growing revenues, which climbed to NOK 2,114 million from NOK 2,045 million in the prior-year quarter. The performance suggests that demand for Borregaard's specialized and sustainable products remains strong across its global customer base.

Navigating a Diversified Portfolio Through Market Volatility

Borregaard's multi-segment structure proved its strategic value in Q2, with varied performance across its business areas. The BioMaterials and Fine Chemicals segments were standout performers, posting improved results that helped balance challenges elsewhere.

In BioMaterials, the company achieved high delivery volumes of its speciality cellulose products, bolstered by record production at its facilities. While lower sales prices and a less favorable product mix provided some offset, the operational efficiency and high output were key contributors to the segment's positive result. Similarly, the Fine Chemicals segment benefited from higher delivery volumes and a favorable product mix, demonstrating its ability to capitalize on market opportunities.

Conversely, the BioSolutions segment faced significant headwinds. Higher sales volumes were not enough to counteract a confluence of negative factors, including increased energy and logistics costs stemming from the Middle East conflict, adverse currency effects, and a less favorable product mix. The net cost impact from raw materials, energy, and logistics alone was approximately NOK 40 million compared to the second quarter of 2025. Despite these challenges, the company effectively managed other key inputs, noting that wood costs were approximately 15% lower than in the same period last year.

Deconstructing the One-Off Charges

The significant profit-before-tax decline from NOK 326 million in Q2 2025 to NOK -45 million this quarter is almost entirely attributable to two distinct, non-operational items. The largest of these was the NOK 337 million impairment of Borregaard’s investment in Alginor ASA, a Norwegian marine biotech company.

Borregaard, which holds a 41.70% stake in Alginor, made the prudent financial decision to write down the value of this investment. The move follows disclosures that Alginor is facing significant challenges, including raw material supply issues, development delays, and cost overruns on a planned demonstration plant. Alginor has since frozen the plant investment to develop a revised strategy. While a difficult step, the impairment reflects a disciplined approach to capital allocation and risk management in its venture investments. The long-term potential in marine biotechnology remains, highlighted by a recent EU classification that could ease market access for Alginor's kelp-based ingredients, but the immediate financial adjustment was deemed necessary.

The second item, a NOK 30 million charge for ground stabilisation measures at the main Sarpsborg production site, is classified as a non-recurring expense to ensure the long-term operational integrity and safety of the facility.

A Proactive Strategy for Future Growth and Efficiency

Looking forward, Borregaard is not standing still. The company is actively addressing the challenging cost environment by implementing a comprehensive cost improvement programme. This strategic initiative targets annual savings of NOK 150 million, with the full effect expected to be realized from 2028. This proactive measure is designed to enhance profitability, strengthen competitive positioning, and ensure the company is lean and resilient for the future.

Market observers appear to have recognized the underlying strength of the business, focusing on the solid operational metrics rather than the one-off charges. The positive pre-market trading of Borregaard’s stock following the announcement suggests that investors understand the distinction between core performance and non-recurring financial events. By transparently addressing its investment challenges and launching a forward-looking efficiency program, Borregaard continues to build a foundation for sustainable, long-term value creation.