Mercer International reported a net loss of $76 million in the second quarter of 2026 as elevated European fiber costs and a $29 million non-cash inventory impairment weighed on its operating performance.
The loss, equivalent to $1.13 per share, compared with losses of $52 million in the first quarter of 2026 and $86.1 million in the second quarter of 2025. All figures are in U.S. dollars.
Operating EBITDA was negative $21 million, little changed from negative $20.9 million a year earlier but down from positive $7.8 million in the previous quarter.
Revenue reached $460.3 million, compared with $489.3 million in the first quarter and $453.5 million in the same period last year.
Fiber Costs Pressure Pulp Operations
Mercer attributed much of the quarterly pressure to higher fiber costs in Europe, where limited supply and strong demand for wood from energy producers intensified competition for sawmill residuals.
The company recorded a $29 million non-cash impairment primarily against pulp and fiber inventories because of low pulp prices and elevated fiber costs. A year earlier, the corresponding impairment was $11 million.
Operating EBITDA for the pulp segment was negative $12.7 million, compared with negative $10.3 million in the second quarter of 2025. Segment revenue declined to $325.1 million from $332.3 million.
Average NBSK pulp sales realizations decreased 10% year over year to $682 per air-dried metric tonne, reflecting weaker pricing in North America and China. Average NBHK realizations increased 6% to $607 per tonne.
Pulp sales volumes rose 6% to 450,329 tonnes, while production remained relatively stable at 455,769 tonnes. Mercer reduced output at its German pulp mills by approximately 26,000 tonnes because of fiber constraints and expects the reductions to continue in the third quarter.
Cost-Savings Program Advances
Mercer generated an additional $13 million in savings and operational efficiencies during the quarter through its “One Goal One Hundred” program.
Savings have reached approximately $54 million since the program was launched in April 2025. The company continues to target $100 million in cumulative savings by the end of 2026.
The program forms part of a broader effort to preserve cash, reduce capital expenditures and optimize working capital.
Mercer Reviews Financing Alternatives
Mercer has engaged advisors and entered discussions with holders of its senior notes due in 2028 and 2029, as well as other stakeholders, to assess potential financing and liquidity-enhancing transactions.
A special committee of independent directors is overseeing the review of alternatives intended to address debt maturities, increase liquidity and strengthen the company’s capital structure. Mercer emphasized that no agreement has been reached and that the discussions may not result in a transaction.
At June 30, the company held $78.8 million in cash and cash equivalents and had approximately $112.9 million available under its revolving credit facilities. Aggregate liquidity stood at approximately $191.7 million.
Mixed Outlook for Pulp and Solid Wood
Mercer expects softwood pulp prices to decline slightly across its markets in the third quarter as seasonally weaker demand offsets the effect of recent supply reductions. Hardwood pulp prices are also expected to decrease modestly as global supply constraints ease.
The company has scheduled 40 days of planned maintenance downtime at its pulp mills during the third quarter.
In solid wood, segment revenue increased 14% year over year to $134.2 million, although operating EBITDA declined to negative $8.2 million. Mercer’s mass timber order book and commitments totalled approximately $151 million at quarter-end, supported by large data-centre infrastructure projects expected to begin contributing to results late in 2026 and into 2027.
Mercer is also continuing a previously announced operational restructuring at its Torgau facility in Germany, including workforce and product portfolio product portfolio adjustments intended to align the site with current market conditions.
Mercer International is a forest products company with operations in Germany, the United States and Canada. Its consolidated annual production capacity includes approximately 2.1 million tonnes of pulp and 1.02 billion board feet of lumber, along with mass timber, pallets and biofuels.
