Mercer International Surmounts Market Headwinds with Strong EBITDA Growth
Mercer International, a leading global leader in pulp and paper production, has navigated the challenging first quarter of 2026 with remarkable resilience, reporting an impressive $8 million increase in operating EBITDA.
According to Juan Carlos Bueno, President and Chief Executive Officer, this significant gain was primarily driven by the strategic scheduling of planned maintenance downtime and the successful implementation of their One Goal 100 program. However, overall results were impacted by rising fiber costs in Germany and Canada, alongside weak demand and pricing for pulp and lumber.
The company's pulp segment reported quarterly EBITDA of $7 million, while the solid wood segment experienced negative quarterly EBITDA of approximately $6 million. Notably, softwood pulp markets remained stable throughout the quarter despite ongoing global economic headwinds.
"We're pleased with our ability to adapt and mitigate the impact of market fluctuations," said Richard Short, Chief Financial Officer. "Our commitment to operational excellence and strategic planning has enabled us to navigate these challenging conditions."
Softwood pulp sales realizations averaged $696 per ton in Q1 2026, a slight decrease from the fourth quarter's average of $702 per ton. In contrast, hardwood markets in China and North America showed significant improvement due to stronger demand and higher domestic fiber costs.
The company's decision to strategically reduce production at their German mills due to fiber supply limitations helped minimize losses during this period. Pulp sales volumes remained flat at approximately 471,000 tons, with first quarter pulp production steady at about 466,000 tons.
Looking ahead, Mercer International has obtained a waiver from their lenders for the leverage ratio covenant under their German revolving credit facility, ensuring compliance by the fourth quarter of 2026. As they continue to navigate the complexities of the market, the company remains committed to operational excellence and strategic planning, positioning themselves for future growth and success.
