ENCE Energía y Celulosa (ENC) Q4 2025 earnings summary

Executive summary

• 2025 was marked by lower pulp prices and challenging market conditions, but saw strong growth in renewables and special pulp, with special pulp reaching 30% of volumes and a ramp-up of a 125,000-ton fluff line.

• Major cost reduction initiatives included a 15% headcount reduction, efficiency plans, and cash cost improvements to the lowest levels since 2022.

• Renewables platform expanded, with biomass electricity generation up 6% YoY, three new industrial heating contracts, and significant progress in biomethane.

• Net loss attributable to shareholders was €55m in 2025, compared to a profit of €32m in 2024, with EPS at -€0.22.

• Free cash flow before growth capex was €8m, but after investments, it was negative; net debt increased to €378m.

Financial highlights

• Group revenues declined to €747m in 2025 from €876m in 2024, mainly due to weaker pulp prices.

• Consolidated EBITDA dropped to €83m in 2025 from €164m in 2024; group EBITDA margin declined to 11% from 19%.

• Pulp EBITDA was €56m (vs. €138m in 2024); Renewables EBITDA rose to €27m (+4% YoY).

• Pulp sales revenue dropped 22% to €486m, with average sales price down 22% YoY to €503/t.

• Free cash flow before growth investments was €8m, but after capex and investments, it was negative.

Outlook and guidance

• Cash cost guidance for 2026 is €468/t, with further reductions targeted through efficiency and decarbonization initiatives.

• Special pulp share targeted to reach 40% in 2026 and over 62% by 2028, with incremental EBITDA margin benefits.

• Renewables and biomethane platforms expected to nearly triple EBITDA by 2030; four industrial heating projects to start in 2026.

• Updated regulatory parameters to increase regulated electricity EBITDA run rate by €10m annually.

• BHKP prices in Europe expected to rise to $1,330/t in March 2026, supported by strong demand and supply constraints.