Source: Inderes

Translation: Original published in Finnish on 7/15/2026 at 9:02 am EEST.

Norrhydro Group reported its Q2 half-year review today. Q2 revenue and especially earnings were weaker than we expected, influenced by a slower-than-anticipated recovery in the construction sector and delayed customer orders amid geopolitical uncertainty. The company maintained its guidance, but we believe that the uncertainty related to it has increased, especially regarding revenue.

Uncertainty in customer industries

Norrhydro Group's Q2 revenue was 7.7 MEUR, down 13% year-on-year. Revenue was 7% below our forecast. According to the company, demand was weighed down by, among other things, uncertainty caused by the geopolitical situation in the Middle East, which led customers to postpone orders. In addition, customers have reduced inventory levels due to recession fears. According to the company, these factors collectively had a 10-15% negative impact on Q2 order intake. Demand has remained strong in the defense, mining, and marine segments, but the recovery in the construction sector has been slower than anticipated. For the full H1, revenue was roughly at the level of the comparison period.

Q2 earnings fell short of expectations, but a strong Q1 compensated

EBITDA for Q2 was 0.44 MEUR, showing a significant year-on-year drop (Q2’25: 0.99 MEUR). The same applied to EBIT, which decreased to 0.13 MEUR (Q2'25: 0.67 MEUR). The earnings lines were thus clearly below our estimates, which assumed a moderate year-on-year improvement. On the other hand, thanks to the strong profitability in Q1, the overall H1 result was stronger than in the comparison period (EBITDA 1.35 MEUR vs. H1’25: 1.23 MEUR).

The company does not report more detailed income statement figures on a quarterly basis, which complicates the analysis of Q2 profitability. For H1 as a whole, the material margin improved to 50.2% (H1’25: 47.8%), continuing the positive trend of recent years. Personnel costs, in turn, increased by 7%, which weighed on profitability. However, the number of personnel has decreased from the previous year, so personnel costs may also include temporary items related to, for example, changes in NorrDigi's resourcing – we are clarifying this during the day.

Achieving the outlook requires a strong end to the year

The company reiterated its guidance and still expects 2026 revenue to be 30-32 MEUR (2025: 28.7 MEUR) and reported EBITDA to be 3-4 MEUR (2025: 2.65 MEUR). In our view, lower-than-expected revenue and EBITDA in Q2 slightly increase uncertainty around the guidance. The guidance requires revenue to grow by at least 9% in H2 against to a strong comparison period, even though Q2 order intake was described as weaker than expected. However, we understand that the company has recently gained new customers, whose revenue impact is expected to materialize from H2 onwards.

The company's comments did not contain significant new information regarding NorrDigi. The company states that interest in electromechanical actuators (EMA) has grown and that the development of the MCC solution has progressed, but the release does not mention any significant concrete orders.