Source: Inderes

Translation: Original published in Finnish on 7/10/2026 at 7:15 am EEST.

Norrhydro will publish its Q2 report on Wednesday, July 15. We expect the company to have reached approximately the same level as the comparison figures, as the repercussions of the Iran war on demand and costs have, in our estimation, eroded the benefits of the development efforts the company has made over the past year. However, in our view, Norrhydro will reiterate its guidance. In addition to the Q2 figures and guidance, we will focus on the demand outlook for conventional cylinders and the potential cost impacts of macroeconomic instability. We are also keeping an eye on the company's balance sheet, although the overall development in this regard has been positive for about a year, especially due to the positive earnings trend.

We estimate that the demand effects of the war in Iran pushed revenue slightly below rather tough comparable

Norrhydro faces a rather high comparable figure in terms of revenue, as the company's H1 revenue last year was quite heavily weighted towards Q2. However, the company's quarterly reporting history is short, making it quite difficult to assess the seasonality of the business. The company also indicated in its Q1 report that the repercussions of the war in Iran had a slightly negative impact on order intake at the end of Q1, and we do not believe the situation changed significantly in this regard during Q2. Thus, we estimate Norrhydro's Q2 revenue to have decreased by 7% to 8.3 MEUR. However, our forecast is clearly higher than the Q1 realized figure, reflecting our estimated normal seasonality. In our forecast, revenue is still generated almost entirely from conventional cylinders, while NorrDigi's revenue contribution has remained low during the initial commercialization phase, in our estimation. Among customer sectors, we anticipate growth in Q2 was driven by material handling, mining, and the marine industry, while the market situation in the forest industry accounts likely remained challenging. We have marginally reduced our Q2 revenue estimate.

Our forecasts see a continuation of a slightly positive earnings trend

We expect Norrhydro's EBITDA to have improved in Q2 in line with the recent trend, by ~8% to 1.07 MEUR. This would correspond to an EBITDA margin of around 13%, which is better than the comparison period but similar to Q1. We have also slightly lowered our Q2 operating profit estimate in line with the revenue forecasts. Year-on-year profitability development has been driven particularly by the increased efficiency of the Rovaniemi factory's production, but the decline in revenue and inflation in certain material and logistics costs have likely acted as counterforces. We estimate that fixed costs have remained well under control. High financing expenses have continued to weigh on net profit in the lower lines of the income statement, but we estimate Norrhydro's EPS to have risen to EUR 0.05 per share in line with earnings. We expect earnings to have satisfactorily converted into cash flow despite certain pressures on working capital created by inflation, though the reduction in net debt compared to the end of Q1 is limited by the small dividend paid by the company during Q2.

We expect the company to reiterate and meet its guidance

Norrhydro’s 2026 guidance is for revenue of 30-32 MEUR (growth of 5-11%) and EBITDA of 3-4 MEUR (2025: 2.65 MEUR). Our full-year estimates (revenue of 30.5 MEUR and EBITDA of 3.6 MEUR) are firmly within the company's provided revenue and earnings ranges, so we expect the company to reiterate its guidance. The repercussions of the war in Iran on Norrhydro's demand and costs may not be entirely over yet, but the upward trend in H1 figures, a slight decrease in uncertainty, price increases, and certain new customer accounts expected to commence in H2, in our view, support achieving the guidance. We are also keeping an eye on the balance sheet, although the strengthening earnings trend, net debt reduction, and extension of the revolving credit facility have, in our view, already significantly reduced balance sheet risks over the past year. In addition, we expect updates on the progress of commercializing NorrDigi technologies and potential new customers, which play a critical role in the company's long-term value creation.