Mercer Reports Third-Quarter Operating EBITDA of Negative $2.9 Million
Third-quarter Operating EBITDA improved to negative $2.9 million as Mercer agreed to a recapitalization covering $1.275 billion of senior notes and $400 million of backstopped new capital.
Mercer International Inc. (MERC) reported third-quarter 2026 Operating EBITDA of negative $2.9 million, an improvement from negative $21.0 million in the second quarter but a decline from positive $7.8 million in the first quarter.
The global forest products company said the sequential gain followed a second-quarter loss of $76.0 million, or $1.13 a share, that narrowed to a net loss of $59.2 million, or $0.88 a share, in the third quarter. Revenue was $440.7 million. Operating loss narrowed to $38.7 million from $59.0 million in the second quarter.
On November 2, 2026, the company entered restructuring support agreements with holders of more than 87% of the aggregate outstanding principal of its senior notes and with holders of a majority of its common stock. The agreements cover $1.275 billion of outstanding senior notes and provide $400 million of fully backstopped new capital. Chief Executive Officer Juan Carlos Bueno said the recapitalization provides for the exchange of approximately $1.1 billion of existing senior notes for equity, eliminates approximately $96 million of annual cash interest, and is expected to significantly reduce debt, extend the maturity runway and provide substantial new liquidity. Mercer International Inc. and Mercer International (Texas) LLC are expected to commence voluntary chapter 11 prepackaged cases in the Southern District of Texas. The company said it is optimistic it can conclude the expedited process by the end of 2026. Operating subsidiaries were to continue with no impact on customers, suppliers and employees.
Pulp sales realizations remained steady, matching the second-quarter description. Overall pulp prices were relatively flat versus the second quarter. Industry-wide curtailments and permanent pulp mill closures helped balance supply, the company said, but soft demand and regional overcapacity in China kept prices flat. Average NBSK pulp sales realizations were $671 per ADMT, down from $728 a year earlier. Average NBHK pulp sales realizations increased 14% to $601 per ADMT from $528 a year earlier. Total pulp sales volumes decreased 7% to 421,413 ADMTs from 452,840 ADMTs a year earlier. Pulp production fell 11% to 406,519 ADMTs from 458,708 ADMTs a year earlier, mainly because of more planned annual maintenance downtime, reduced production at German mills on high fiber prices and mechanical issues at Celgar. Pulp mills had 44 days of planned annual maintenance downtime, about 48,900 ADMTs, which the company estimated reduced Operating EBITDA by approximately $34.1 million.
The pulp segment’s Operating EBITDA improved to positive $5.9 million from negative $12.7 million a year earlier. The company attributed the year-over-year gain primarily to government grants at Peace River, cost-reduction initiatives and higher energy sales realizations, partially offset by higher per-unit fiber costs and lower pulp sales realizations. Pulp-segment revenues, including energy and chemicals, decreased 8% to $310.2 million from $339.0 million a year earlier. Energy and chemical revenues increased 43% to $29.1 million from $20.4 million a year earlier. Costs and expenses included a $13.0 million benefit from government grants recognized at Peace River and a non-cash inventory impairment of $8.0 million, compared with a $20.4 million impairment a year earlier. The company secured about $26.5 million in grants and repayable contributions for the mill.
Solid wood segment Operating EBITDA improved to negative $7.0 million from negative $9.3 million a year earlier. Solid wood revenues increased 10% to $128.6 million from $117.2 million a year earlier. Lumber revenues rose 11% to $68.0 million from $61.0 million a year earlier. Manufactured products revenues increased 53% to $18.7 million from $12.2 million a year earlier. Lumber sales realizations modestly increased versus the second quarter, primarily on higher U.S. prices from reduced supply. The company currently expects lumber prices to be relatively flat in the fourth quarter as weak demand is offset by ongoing supply constraints. Mass timber order book and commitments were about $151 million at the end of the third quarter.
The “One Goal One Hundred” program added $22.0 million of cost savings in the third quarter, taking the cumulative total to about $76.0 million since its April 2025 launch, after $13.0 million in the second quarter and $11.0 million in the first quarter. The company said it remains on track to achieve a $100 million target by year-end. Cash and cash equivalents were $71.0 million as of September 30, 2026.
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