ALTRI SGPS Aktie

Good morning. We welcome you to the Altri Second Quarter 2026 Results Conference Call. [Operator Instructions] I'll now hand the conference over to Mr. Rui Cesario, the Head of IR of the Altri Group. Please go ahead, sir.

Good morning, and thank you for joining Altri's Second Quarter 2026 Results Conference Call. Today, we will review the financial performance, market conditions, operational highlights and outlook, followed by Q&A session. Joining us this morning are Mr. Jose Pina, Altri's CEO; and Mr. Miguel Silva, the Group CFO.

I will now hand over to Jose Pina.

Thank you, Rui. Good morning, everyone, and thank you for joining us today. We move on to Slide #2. Second quarter represented a significant improvement compared to the first quarter of the year. As you will recall, the beginning of 2026 was heavily impacted by severe storms in Portugal, which affected wood availability, logistics and operational efficiency across our mills. During the second quarter, however, conditions progressively normalized, allowing us to recover production stability and improve overall profitability.

At the same time, market conditions became increasingly supportive. Pulp prices recovered throughout the quarter, resulting pulp demand strengthened and customer activity remained healthy, particularly across Asian markets. These developments provide a much stronger commercial environment than the one we experienced at the beginning of the year.

Against this backdrop, revenues reached approximately EUR 205 million and EBITDA recovered to EUR 30 million with a margin of 14.7%. While profitability remains below the levels achieved in stronger market cycles, the quarter clearly demonstrates the earnings potential of the business once operational disruptions are removed. Importantly, we did not only focus on operational recovery. We focus to advance our long-term diversification strategy with the [indiscernible] projects entering the ramp-up phase at Caima, the biotech conversion project gaining commercial momentum and AeoniQ demo project progressing well according to plan.

These developments represent important steps in what we believe will become an increasingly significant source of value creation for the group. In parallel, the group continued to receive important external recognition for sustainability performance, further reinforcing our positioning as a leading sustainable fiber producer. Therefore, whilst the quarter clearly reflects the recovery of our core business, it also marks the beginning of a new phase where Altri starts to progressively capture the benefits from the specialty fibers and diversification [indiscernible] cycle that has been under execution over the last few years.

Moving on to market development. Although global pulp demand remained relatively soft during the first month of the year, the overall trend improved progressively throughout the quarter. China continued to outperform most other regions and remain a key demand driver for hardwood pulp. While global demand was still slightly below last year's levels, we observed a much healthier market environment that one seen towards the end of 2025.

Turning to Slide #4. The dissolving pulp market continues to be one of the most interesting areas within the broader fiber market. As shown on this slide, global dissolving pulp demand increased by more than 6% year-on-year during the first 4 months of 2026, with Asia accounting for most of this growth and China remaining the main demand provider.

The underlying driver remains unchanged. Global textile producers continue to increase their use of cellulose fibers, supported by consumer demand for more sustainable products. And by the means, we reduce reliance on fossil-based synthetic alternates. This structural trend is creating attractive long-term opportunities for dissolving pulp producers. For Altri, this market is strategically important because it supports the diversification efforts and our objective of increasing exposure to higher value cellulosic applications.

Whilst we're still in a transformation phase of Biotek, the demand trends we see today continue to reinforce the rationale behind this investment and our confidence in the long-term growth potential of the business. Let me now briefly comment on inventory levels, which remain an important indicator of market. Inventories at European ports have remained below historical averages during April and May, indicating a healthier supply-demand balance. As you can see, stock levels were consistently within the range of approximately 1.4 million to 1.5 million tons. This inventory position contributed to the improvement in market sentiment in Europe observed during the second quarter.

Moving from demand and inventories to pricing. Let me add a few comments on BHKP prices in Europe during the quarter. After a weaker environment towards the end of 2025, pulp markets improved significantly during the first half of 2026. We saw a sequence of successful price increase announcements across the industry, supported by better demand trends, particularly in China and by relatively healthy inventory levels in Europe.

As a result, average BHKP prices in Europe increased by around 16% year-on-year and 13% compared to the first quarter. What is particularly encouraging is that this recovery was not driven by a single event, but rather by a gradual improvement in market fundamentals throughout the first half of the year. From Altri's perspective, higher prices come at an important time as they coincided with the progressive normalization of operations following the storms experienced in the first quarter.

While we remain mindful of the macroeconomic uncertainties that continue to affect global industrial activity, we believe current inventory levels and customer purchasing patterns support a more balanced market environment going forward. On dissolving pulp pricing, we also observed positive trends. As shown on this slide, average DP prices increased around 9% quarter-on-quarter and recovered materially from the levels observed at the beginning of the year. This improvement was primarily supported by stronger demand for Asian textile producers, particularly in viscose and lyocell applications, where cellulosic fibers continue to gain relevance as a more sustainable alternative to synthetic fibers.

For Altri, this trend is particularly relevant. Over the past few years, we have been progressively positioning the group to increase its exposure to higher value-added cellulosic fibers and dissolving pulp is a central component of that strategy. Whilst we're still at an early stage of the Biotek's transformation journey, market dynamics remain supportive and reinforce our confidence in the long-term opportunity for this business segment.

Moving now to operational performance. The first half of the year continued to reflect the impact of the severe weather events experienced during the first quarter as well as the scheduled maintenance shutdown at Celbi. As expected, these factors affected production volumes on a year-on-year basis. Production declined compared to the first half of 2025, largely reflecting circumstances that we consider temporary in nature.

However, one aspect I would like to highlight is the resilience shown by our commercial platform. Despite the operational challenges, sales volumes increased versus the same period last year, reflecting both the strength of our customer relationships and the team's ability to maintain a reliable supply for our market. Protecting customer relationships has always been one of Altri's strategic priorities, particularly during periods of operational disruption, and we believe this quarter again demonstrated the value of that approach.

Another important development was the continued increase in dissolving pulp sales. This reflects both the gradual conversion of Biotek and the growing acceptance of our products by customers. Although the transition remains ongoing, we are encouraged by the commercial progress achieved so far and by the increasing number of qualification processes currently underway.

Looking now at our commercial mix. Tissue continues to represent our largest end-use segment and remains a stable source of demand for our products. However, the most strategically relevant trend is the increasing contribution from textile applications in Asian markets. Textiles represented around 15% of our sales volumes during the first half, while Asia accounted for approximately 18% of sales. Both figures have increased meaningfully over recent years and reflect the change in profile of the group. This evolution is not occurring by chance. It is a direct consequence of our deliberate strategy to move further into dissolving pulp and other specialty fiber applications where we believe long-term growth prospects are particularly attractive.

At the same time, increasing exposure to Asian markets provides access to some of the fastest-growing end-use segments globally, particularly within the textile value chain. As part of that strategy, we now have a direct presence in China with a local sales office. Therefore, beyond the short-term quarterly performance, this slide illustrates the direction in which we are strategically transforming the group.

I will now pass the floor to Miguel Silva, Altri's CFO, who will walk you through the main financial highlights of the quarter.

Thank you, Jose, and good morning, everyone. Let me now review the financial performance for the quarter in Slide #10. As Jose highlighted earlier, the second quarter represents a significant recovery compared to the first quarter and demonstrates the business ability to generate earnings once operations return to normal conditions. Total revenues reached EUR 204.6 million during the quarter, an increase of approximately 21% compared with the same period last year and almost 28% versus the first quarter.

This performance was supported by 3 main factors: first, a recovery in sales volumes following the operational disruptions experienced at the beginning of the year. Second, a stronger contribution from dissolving pulp sales; and third, the improvement in market prices that we discussed earlier.

On the profitability side, EBITDA reached EUR 30 million compared with EUR 5.4 million in the first quarter and EUR 28.2 million in the second quarter of last year. The quarter, therefore, marked a return to a more normal profitability profile for the group. Whilst we continue to face some wood cost pressure, most operational and logistics inefficiencies experienced earlier in the year were corrected during the second quarter, allowing profitability to recover materially. I would also note that this recovery was achieved while continuing to invest in the commercial development of our diversification projects and specialty fiber strategy.

Looking now at the first half as a whole in Slide #11, the reported figures still reflect the significant disruption caused by the first quarter. Total revenues reached EUR 365 million, broadly stable compared with the first half of last year, declining by only around 2%. However, EBITDA reached EUR 35.5 million compared with EUR 57.6 million in the first half of 2025. The difference is almost entirely explained by the extraordinary circumstances that affected operations during the first quarter, including the storms, supply chain disruptions and idle wood cost.

For that reason, we believe the quarterly evolution from Q1 to Q2 provides a better indication of the current trend in the business than the first half comparison alone. The key takeaway is that the operational and commercial recovery achieved during Q2 allowed us to start rebuilding profitability following what was an unusually challenging start of the year. This recovery is particularly visible at the margin level. EBITDA margin improved from 3.4% in the first quarter to 14.7% in the second quarter, representing an increase of more than 11 percentage points quarter-on-quarter. This was driven by a combination of stronger selling prices, higher sales volumes and improved operational efficiency. Overall, however, we are encouraged by the pace of recovery achieved during the quarter and by the clear improvement in profitability.

Moving down in the income statement as a consequence of the EBITDA recovering, the improvement naturally flow through the remainder of the income statement. EBIT reached EUR 18.5 million during the quarter compared with a negative EUR 6.3 million in the first quarter and EUR 16.9 million in the second quarter of last year. Net profit reached EUR 12.9 million compared with a loss of EUR 7.3 million in Q1 and EUR 6.4 million in the comparable period last year. This represents a very significant recovery in earnings and clearly illustrates the operating leverage embedded within the group.

Looking at the half year figures, EBIT for the first 6 months reached EUR 12.2 million, while net profit amounted to EUR 5.6 million. Both figures remain below the levels achieved during the first half of 2025. However, once again, these results are heavily influenced by the very weak first quarter. If we look only at the second quarter, profitability levels are already much closer to recent historical patterns.

Turning now to costs on Slide #15. One of the most encouraging developments during the second quarter was the progressive normalization of most operating and logistics. Energy costs remained broadly stable. Chemical costs also remained relatively controlled despite some inflationary pressure linked to energy-related inputs. The main area where we continue to see some pressure is wood. As discussed previously, the storms experienced early in the year affected wood availability and sourcing conditions across Portugal. While conditions improved significantly throughout the quarter, some impact on procurement costs remains visible. The positive aspect is that we expect these effects to progressively dilute over the coming quarters as supply chains continue to normalize.

Moving to the balance sheet on Slide 16. Net debt increased from approximately EUR 348 million at the end of March to EUR 398 million at the end of June. This increase was primarily explained by 2 factors: first, the payment of dividends during the quarter; and second, the continued investment in diversification and growth projects. During the quarter, we continued investing in projects that we believe will contribute meaningfully to the future development of the group, including the Biotek conversion to dissolving pulp, Caima's acetic acid, furfural and AeoniQ. Despite these investments, we have a comfortable liquidity position that provides us with sufficient financial flexibility to continue executing our strategy.

With that, I will now pass it back to Jose.

Thank you, Miguel. Before discussing our strategic projects, I'd like to spend a moment on capital efficiency and returns. As shown on this slide, our ROCE currently stands at around 3%, significantly below the level that Altri has historically delivered over the cycle. It is important to recognize that this reflects a very specific point in the cycle rather than a structural change in the quality of the business.

Over the last decade, Altri has consistently generated double-digit returns through most phases of the pulp cycle. And in stronger market environments, we have achieved returns comfortable in the mid-teens and above. Today, however, we are simultaneously facing 2 factors that temporarily depressed returns. First, earnings remain affected by a period of relatively weak pulp market conditions and more recently by the operational disruption experienced in the first quarter. Second, we are carrying a significantly larger asset base as a result of investments made over recent years to support our diversification strategy.

In other words, part of the capital has already been invested whilst a meaningful portion of the future earnings contribution is still to be delivered. This is particularly true for projects such as [indiscernible] conversion into dissolving pulp, acetic acid and [indiscernible] project at Caima and the AeoniQ platform, all of which are at different stages of commercialization and ramp-up.

Therefore, we believe the current ROCE should be viewed as a transitional metric rather than a reflection of the long-term earnings potential of the group. As market conditions continue to improve and our diversification projects progressively contribute to profitability, our objective is to move returns closer to the level that shareholders have historically associated with Altri.

Moving now to sustainability. It remains fully embedded in our business strategy and continues to be an important differentiating factor for the group. During the quarter, Altri was recognized by CDP as a Supplier Engagement Leader after achieving an A rating for supplier engagement assessment. This distinction recognizes companies that demonstrate leadership in working collaboratively with suppliers on climate-related matters and in strengthening resilience across their supply chain.

We were also included for the second consecutive year in TIME's ranking of the world's most sustainable companies, highlighting our continued progress across environmental, social and governance dimensions. While these recognitions are clearly positive, we view them as confirmation that the strategic choices made by the group over many years are producing tangible results. In parallel, we launched our Sustainability Literacy Programme designed to strengthen sustainability awareness across the organization and further embed sustainability into everyday decision-making.

Ultimately, we see sustainability not only as a responsibility, but also as a source of competitive advantage as customers increasingly focus on traceability, carbon footprint and sustainable sourcing, we believe Altri is well positioned to benefit from these structural trends.

Turning now to our diversification project. The first project I would like to discuss is the Acetic Acid and Furfural at Caima. This project entered the ramp-up phase during June and represents an important milestone in Altri's strategy to expand into adjacent specialty markets in particular in bioproducts. Although relatively modest in size compared to our core pulp operations, the economics of the project are highly attractive.

We expect annual revenues of approximately EUR 6 million to EUR 7 million and annual EBITDA of around EUR 5 million once fully ramped up. Importantly, this project demonstrates the diversification does not always require very large capital commitments. By leveraging existing industrial assets and know-how, we were able to take what was before residue, created attractive new revenue streams while maintaining disciplined capital allocation. The project is expected to achieve full ramp-up by the end of this year, and we look forward to updating shareholders on this progress over the coming quarters.

On Biotek conversion into dissolving pulp, we believe this move represents one of the most significant value creation opportunities currently within the group. As we have discussed previously, dissolving pulp has historically commanded a substantial premium for commodity hardwood pulp while requiring only a moderate increase in operating costs. During the second quarter, we continued to accelerate the commercial phase of the project. Customer qualifications progressed, engagements with potential clients increased, and we completed the first large-scale commercial deliveries to new customers.

While qualification processes in specialty markets naturally require time, we are encouraged by the feedback received and by the increasing visibility of future demand opportunities. What is particularly important is that we're now moving beyond the technical conversion phase and increasingly into commercial execution phase. In many ways, this is where value creation starts becoming visible. The investment is largely completed, although some into 2027, the operational capability is in place, and our focus is now on customer development, product qualification and progressively increasing volumes. For that reason, we increasingly view Biotek as a project entering its delivery execution phase rather than investment phase.

In the following slide, on the AeoniQ project, it remains one of the most interesting long-term opportunities within our portfolio. The objective is to create a new generation of sustainable textile fibers capable of addressing some of the environmental challenges associated with traditional textile production. During the quarter, execution continued according to plan and the demo unit, which is, in this case, pre-industrial is under final installation.

Production is expected to begin during the fourth quarter of this year. While AeoniQ is still at an earlier stage than Biotek, we continue to see strong interest from potential partners and customers across the textile value chain. What makes this opportunity particularly attractive is that it positions Altri much further downstream, bringing us closer to end markets and creating exposure to a potentially very large addressable market.

Naturally, this remains a long-term project. However, every milestone achieved during 2026 increases our confidence in its future potential and the strategic role it can play within the group longer term.

To conclude, let me share our outlook and strategic execution. The first point I'd like to highlight is that market conditions have clearly improved compared to the beginning of the year. Hardwood pulp demand remains supported by China and good indications for Europe, while dissolving pulp continues to benefit from positive structural and cyclical trends. The second point relates to pricing. Following the strong recovery observed during the first half, we expect a more stable pricing environment during the second half of the year. Whilst we do not assume a continuation of the rapid increases experienced early in the year, current fundamentals appear supportive of a balanced market environment.

Finally, operationally, the significant disruption experienced during the first quarter is now largely behind us. Looking beyond the immediate market environment, our strategic focus remains unchanged. Delivering our diversification strategy remains one of management's top priorities. At Biotek, we continue to expand customer qualifications and commercial relationships. At Caima, we expect the acetic acid and furfural project to progressively ramp up during the second half. And at AeoniQ, our focus remains on successful starting production at the demonstration unit later this year.

To conclude, I wanted to highlight that the second quarter marked a clear recovery for Altri. Our operations normalized, profitability improved significantly, market conditions have become more supportive and our strategic projects continue to advance according to plan. At the same time, we are increasingly seeing signs that the investments made over recent years in diversification and specialty fibers are beginning to translate into tangible commercial and operational progress.

Whilst we will remain disciplined and realistic regarding the challenges we have, we believe the group enters the second half of 2026 from a position of greater strength and improved market fundamentals. We believe Altri will be successful in this transition to become a more diversified group with a higher footprint in the specialties market besides cost leadership in the [indiscernible] segment. Thank you for your attention.

We look forward to your questions.

Our first question comes from Bruno Filipe Bessa from CaixaBank BPI.

So a few questions from my side, if I may. The first one on the cash cost for 2026. If I remember correctly that -- I mean, I think you mentioned the mid-single digit cash cost increase expected in 2026 with your Q1 earnings call. Just trying to understand if you keep that view now that...

We cannot hear any questions.

Can you hear me better now?

Sorry, we cannot hear any question.

Okay. There seems to be a small problem with the connection. We will try and solve it. And in the meantime, we will follow to the next question, and we'll come back to Bruno as soon as we fix it. Sorry for the inconvenience.

Operator, can you move to the following question?

Our next question comes from António Seladas from A|S Independent Research.

I have two. So the first one is on volumes sold. The quarter was quite nice. So maybe you can provide some color on what kind of figures should we expect for the coming quarters, namely in dissolving because I think the quarter was one of the best quarters ever in terms of dissolving pulp sold, tons sold. This is the first question.

Second question is the wood prices. You mentioned that prices -- well, the situation should -- the abnormally high prices should dilute or should come down. So should we expect 10% to 20% prices coming down? Is that a fair assumption? Or maybe you can provide some color on these, too.

I'm sorry, Bruno (sic) [ António ], we were unable to hear the question. The sound did not come through clearly.

I'm going to do the questions via the webcast.

We are sorry for the inconvenience. Ladies and gentlemen, we seem to be experiencing some technical difficulties. [Operator Instructions] In the meantime, we are trying to solve the complications. Thank you very much for your understanding. [Operator Instructions] Thank you very much.

In the meantime, we do have a written question by António Seladas, and I will repeat the question. Wood prices, could you provide some color for the coming quarters? Namely, is it fair to expect 10% to 20% price increases? Volumes sold on dissolving pulp, what should you expect in the coming quarters?

So António, what we can say at this point, as we have referenced, the wood prices were a significant factor in the first quarter. Some of that had implications in the second quarter, as you would imagine. We've had a significant reduction in market availability of fiber during the first 6, 7 months. But things have now been normalizing. And in terms of costs going into the second half, we expect that situation to be gradually back to normal. So the overall wood prices should be normalizing and availability should be normalizing as well in the second half. And effectively, by the end of this year, we don't expect any significant further impact.

With respect to volumes of dissolving pulp, we have more stable volumes within our existing Caima units. When it gets to Biotek, there are multiple qualifications taking place. Some of the commercial sales that you have seen now in Q2 are continuing. So they'll start providing a base loading of the Biotek asset. But over time, we have now more than 10 qualifications ongoing into multiple segments, not just in textile, but also in specialty.

So we would expect to gradually start seeing some of those qualifications conclude. It will depend when contracts actually will have to be negotiated and confirmed once qualifications do take place. And the final stage of the qualification, as you may know, is large-scale industrial production and then a qualification of that output into the customers' applications and the customers further down the value chain. So that usually does take some time. But as I said, we're now ongoing with Biotek already on commercial sales. And gradually, you should see a steady increase in Indonesia. Thank you for the question. We have another question. Operator, could you please read the question?

Yes. We have the following question from Luis de Toledo from ODDO. The question is as follows. With regards to Gama project, do you expect the need to book material impairments in the foreseeable future?

Thank you, Luis. With respect to the Gama project, which has been archived just earlier this month. We are currently reviewing follow-up actions, including the possibility to present allegations to some of the arguments that were used to justify the archival. And then once we have clarity on those, we'll make a determination. But assuming that there are no further developments there in the near medium term, at some point, we will be recognizing the investment that has been made.

Some of which has already been recognized, but we also need to remind ourselves that there is significant intellectual capital and value that was generated through the project, which is actually now being already applied to some of the conversion projects that we have. Just to complement that, any impairments that may be registered, these are purely from an accountancy perspective, so that they would have no cash impact. So as far as free cash flow for the year, there's no impact.

The following question comes from Maksym Mishyn from JB Capital. What was the share of wood sourced domestically in 1H '26?

So regarding the share of wood sourced domestically in the first half, we're looking at roughly 60%. And that included both domestic market and our own forest. Actually, if we combine them, it will be closer, for year-to-date, will be closer to 70%.

The next question comes from Bruno Bessa from CaixaBank BPI. What is the cash cost expectation for 2026? Could you please provide an indication about cash cost in 1H '26 adjusting for the extraordinary events in Q1? Why do you expect stable prices until YE, considering the ongoing relevant new capacities coming to the market in China and Indonesia by YE '26? When do you expect the Sucuriú project to start up? Why do you think Suzano is giving in its investors presentation the indication that the project will only start up by YE '28?

Thank you, Bruno. Let me take it in by slices. Starting with the cash flow expectation for 2026. We've given previously the indication that we expect middle single digits for the full year. That remains our expectation. And based on our current forecast, that's pretty much in line with our previous indication. So overall cash cost will probably be in the range of approximately [ 450 ]. And considering what we see at least on the normalization, in particular on inputs in terms of fiber, that remains.

So our previous comments in the last call, even considering the disruption for the first quarter, will remain. In terms of prices year-end, I think what you've seen right now, at least, the market hasn't spiked. I would say, the beginning of the summer low season, prices haven't necessarily moved in any significant way. There is an arbitrage with China. China did correct about $20. We've seen in the last few weeks that stabilizing. I would say any movements there are going to be very much linked to supply-demand dynamics over the coming months.

But if you look back to Europe, prices do remain relatively stable. And even though you may have some adjustments in the near months, considering the relatively lower inventory levels, not just at ports across the board, but also on the supply side, and most of this has been primarily supply-driven, I would not expect to find any significant justification at risk for a big swing in prices.

Additionally to that, inflationary pressures, in particular on fossil fuels, continue to remain an issue. So that will affect, obviously, logistics, in particular on the dynamics of potentially imports of finished products into Europe. So we at least believe that's going to moderate somewhat and provide some stability at levels which are closer to where we are today. So just given those dynamics, I don't see necessarily that we're going to be into a period anything that can swing. So stability, I think, will be what we would consider for the remainder of the year, as I said, potentially some minor adjustments.

If you look at capacity by end of the year in China and Indonesia, as you know, capacities in China are a little bit volatile. We do have a series of projects in construction. These are integrated projects that are going to supply the continued growth that we see in China. Indonesia, there's been some constraints in terms of the fiber basket. There's some supply to those projects. We'll have to see all of that volume at least in Indonesia. It's non-certified volume. So we will not find any of that in Europe.

Obviously, we'll target, in particular, a lot of the growth that is still happening in Southeast Asia and will continue to happen in Southeast Asia in some basic segments such as tissue in particular, but also we will target China. And here, I think we have to see what happens with fiber prices because China hardwood fiber basket has been suffering some fluctuations. We've been experiencing significant storms, which have reduced availability. Imports continue at a relatively good pace. So I think there will be significant dynamics, particularly around Asia.

But as far as what we see looking at inventories in Asia, looking at inventories in China, customer demand and also the current dynamics in Europe, I think it will gradually find its way into the market, but I would not be expecting any very disruptive impact.

With respect to the Sucuriú project, our expectation is likely, even though it's ongoing, but it's likely going to be more 2028 and late 2027. I think it's not unheard of for some of these larger projects to have delays. I think the full financing of the project is still a little bit of a question mark, but we'll have to see how that's going to evolve. But I would imagine that we'll have some better indication towards the end of this year. But I don't see it in this case, and I would agree with Suzano, that based on where it stands, I don't think we'll see it before 2028.

Our next question comes from Maksym Mishyn from JB Capital. What was the impact of hedges and FX on financials in the second quarter of '26?

Thank you, Max. I'll ask Miguel to comment on that.

Sure. So we have a positive effect of FX changes and FX hedges on the second quarter of '26 of around EUR 2 million, which compares with a very negative effect on the second quarter of 2025, which was roughly negative in EUR 6 million. So it's a big difference when we compare the second quarter positive effect of around EUR 2 million with a negative effect of around minus EUR 6 million on the second quarter of 2025.

Our next question comes from António Seladas from A|S Independent Research. Wood prices, could you provide some color for the coming quarters? Namely, is it fair to expect 10% to 20% price decreases? Volumes sold on dissolving pulp, what should you expect from the coming quarters?

Thank you, operator. This question was already answered. So I think we have a pending question from Manuel Lorente from Santander. Not written. Can we try...

The next question comes from Manuel Lorente from Santander.

Can you hear me now?

Yes.

Brilliant. So my question probably is on dissolving pulp cash cost impact over the overall group. I see on the slide that you report that dissolving pulp cash cost will be, on average, 10% to 15% above the standard pulp production. Are we there? Or it's now a little bit higher because of the initial ramp-up cost of the operation?

My question is because I was expecting somehow better relative performance of the cash cost in Q2 and that was not the case. So I was wondering whether the blended cash cost between dissolving and traditional pulp impact is denting somehow the traditional good performance in terms of cash cost or it's more wood related?

Yes. Thank you, Manuel. Well, while we're going through all of the qualifications at Biotek, that has an impact and has -- you would assume through the transition at least a higher cash cost impact from dissolving. I would say generically through this stage, you'll probably be looking at cash cost in dissolving about 25% higher than what would be normal hardwood BHKP. So it's normal through this process. You would expect it to be as such.

The overall impact of wood on the cash cost that usually has some relevance in particular because since we've seen some more elevated wood pricing -- wood costs that would trickle down into the dissolving pulp cash cost as well. But purely from an operational standpoint, bear in mind that Biotek continues to be on swing. So even though pretty much every month, we're doing dissolving pulp production and these transitions, and even when we do dissolving pulp runs, we are producing several qualities, which are targeted to different markets, and those qualities also involve some transition themselves.

So you would expect that the current period of transition to see some more elevated impact. But overall, on a blended basis, as I said before, for the year, we remain to be -- within what we stated last time, which was in the middle single digits, and that will mean on a blended basis, about [ 400 ].

Okay. Great. That's useful. And a follow-up on cash costs. So the overall full year guidance implies a better relative performance of H2 versus the second quarter. This relative better performance is wood-related, logistics-related or any other specific consideration?

Thank you, Manuel. Yes, it implies an overall improved second quarter. And I would say it comes from two primary elements. One is clearly wood-related. In addition to that, I would add logistics-related, because we've had some significant disruptions during the first quarter. Some of them remain into the second quarter and not all have been resolved. We have, for example, the Biotek rail line to the port, that's still down. It's not expected to recover until sometime late Q3 or even early Q4.

So those are things that will -- as they normalize, they will have an impact also on cash cost. Just to add on that, Manuel, overall, when we look at our current specific consumption KPIs, actually, they've been very -- on a very high note across the board. So fiber-specific consumption as well as energy and chemicals intensity, they've been on a very good footing. So we're not at all concerned on that.

Ladies and gentlemen, there are no further questions. I will now hand over the session to the Altri team.

Well, thank you very much for attending the call today. As I stated, Q2 was a quarter of recovery. Overall operational disruptions and the extraordinary costs that we experienced in Q1 have gradually normalized. At the same time, we see a particularly favorable development in the market, and looking into Q2, a more stable environment as well. So we look forward to discussing those over the next quarter. Thank you for attending.

This concludes today's event. We thank you all for your presence. Ladies and gentlemen, you may now disconnect your lines.

Good morning. We welcome you to the Altri Q1 '26 Results Conference Call. [Operator Instructions] I'll now hand the conference over to Mr. Rui Cesario, the Head of IR of the Altri Group. Please go ahead, sir.

Good morning, everyone, and thank you for joining Altri's First Quarter 2026 Results Conference Call.

Today, we will review our financial performance, market conditions, operational highlights and outlook followed by a Q&A session. Joining us this morning are Mr. José de Pina, Altri's Chief Executive Officer; and Mr. Miguel de Silva, the Group's Chief Financial Officer. I will now pass the floor to Mr. José Pina.

Thank you, Rui. Good morning, and thank you for joining Altri's conference call. We're pleased to welcome our investors and analysts today as we present our results and share our perspective on the current market environment and the key challenges we face.

Turning now to our main highlights for the first quarter of 2026. As we start with the market environment, it is important to note following a very challenging year for the global pulp sector in 2025, we are beginning to see some more constructive dynamics emerging in early 2026. Supply and demand conditions have been more balanced and the tariffs announced by the United States have so far been largely absorbed along the value chain.

In addition, stronger demand from China provided support to recent BHKP price increases while dissolving pulp continues to improve its competitiveness versus [indiscernible] synthetic fibers. These are reinforcing the long-term attractiveness of our product mix. That said, the first quarter was clearly impacted by extraordinary nonrecurring operational challenges. Several storms, severe storm in Portugal affected logistics, energy costs and overall operations, which combined with lower net pulp prices and the depreciation of U.S. dollar weighted significantly on our results.

As a consequence, EBITDA in the quarter reached EUR 5.4 million corresponding to margin of 3.4% compared with 14.5% in the same period last year. Importantly, these impacts were temporary. Operations have now been largely normalized. And as we move into the second quarter, we expect a meaningful improvement in profitability supported by better pricing dynamics and continued focus on cost efficiencies. Our strategy to diversify earnings while expanding to higher value of sustainable businesses continues to advance according to plan.

As, the acetic acid and furfural project is progressing well and is expected to be concluded in June 2026 as planned. This project represents an important step in maximizing the value of our biomass energy streams and strengthening our positioning within the biobased chemical space. At Biotek, the migration of the BHKP production to dissolving pulp remains on track with full migration expected by the end of 2026. This transition is key to enhancing product mix resilience and capturing structural demand in specialty fiber applications.

In parallel, we have initiated investments in the pre-industrial furfural unit aimed at scaling up AeoniQ, our share company in Switzerland. This allow us to increase production capacity, accelerate customer qualification processes and further position Altri in the fast-growing market for sustainable textile takers. These units will be installed in China.

Taken together, these initiatives clearly illustrate our long-term growth strategy, disciplined execution, diversification beyond traditional pulp and higher-value products as well as continued focus on sustainable value-added solutions.

Moving on to the home market highlights for the first quarter. Global pulp demand had a slow start of the year, reflecting the still cautious macroeconomic environment. Overall, demand declined by close to 4% year-on-year in the first quarter with softer consumption across most upgrades. That said, the structural trends remain unchanged and continue to support our strategic position. Hardwood pulp continues to gain share versus softwood with hardwood demand declining significantly less in softwood in the quarter. This trend reinforces the long-term attractiveness that Altri's at the phase, which is fully focused on hardwood pulp.

From a regional perspective, China once again outperformed the global market. While global hardwood demand declined by 2.4% year-on-year, demand in China remained broadly stable, highlighting the resilience of this key market and its importance for global pulp. North America also showed positive dynamics while Europe [indiscernible].

Then specifically to the dissolving pulp markets. Dissolving pulp continues to recover following a very challenging 2025. As we move into early 2026, the impact of the U.S. tariffs is increasing the [indiscernible] across the value chain, allowing market fundamentals to gradually reassert themselves. At the same time, the dissolving pulp is becoming more competitive versus furfural-based synthetic fibers. This is an important structural development as it supports demand in textile applications and reinforces the long-term sustainability case for solvable products.

From a regional perspective, China remains by far the largest and most important markets of dissolving pulp. In the first 2 months of 2026, demand in China grew by around 4.5% year-on-year contributing to overall global demand growth of close to 1%. Asia as a whole continues to drive market recovery, more than offsetting weaker dynamics in Europe. Just to reinforce utilization rates at our customers, in particular in East Coast in China remained well above 90%.

Overall, while the recovery is still gradual, the direction is clearly positive and fully aligned with our strategic focus on dissolving pulp and supports our ongoing version and growth initiatives.

Let me now briefly comment on inventory levels. Turning to Slide #5. Inventories at European ports have remained broadly stable and close to historical averages since the second half of 2024. As you can see, stock levels have been consistently within the range of approximately 1.4 million to 1.5 million ton. This stability is an important signal to the market. Despite the weaker demand environment at the start of the year, in countries have not built up to excessive level, indicating that supply and demand remained relatively well done.

Moving from demand and inventories to pricing, let me briefly comment on BHKP products in Europe in the quarter in Slide #6. In the first quarter, we started to see a clear picture recovery in BHKP in Europe particularly as the quarter progressed. On average, BHKP prices in the first quarter of 2026 were up 13% year-on-year in U.S. dollars but only up 1% in euros, which highlights the impact of the weaker dollar versus last year. Importantly, if you look at the sequential trend, pricing momentum improved meaningfully during the quarter. On a quarter-on-quarter basis, the BHKP prices rebounded by 12% in U.S. dollars or 11% in euros, indicating improving fundamentals as we move through the period.

Consistently with that, the fixed index ended March at $1,286 per ton or EUR 1,112 per ton. Overall, these pricing trajectory supports our expectation of the improved profitability. As we move into the second quarter with more normalized operations and continued policies.

Let me now turn to dissolving pulp pricing, which is more closely aligned to the textile value chain. Dissolving pulp prices were more affected during 2025 by macroeconomic uncertainty, particularly in the textile sector as a consequence of the potential impact from U.S. tariffs on Asian value chain. As a result, pricing dynamics in dissolving pulp, like those of commodity pulp during most of the last 6 months. In China, which remains the reference market for dissolving pulp, average imported hardwood dissolving pulp prices declined year-on-year moving from around $940 per ton in the first quarter of 2025 to approximately $810 per ton in the first quarter of 2026.

These are net prices, as you know, in China. Pricing overall remains relatively stable through the second half of 2025 reflecting cautious demand and inventory adjustments along the textile chain. Importantly, we started to see a recovery in March prices borrowed early in the quarter and ended March at around $835 per ton and now more recently, already moving closer to $880 per ton, signally improving sentiment and the gradual normalization of demand conditions.

While the recovery remains gradual, this recent improvement is encouraging and is consistent with our view that dissolving pulp fundamentals are stabilizing supported by improved competitiveness versus synthetic fibers and the long-term growth of sustainable text pulp applications.

Let me now turn to Altri's specific operational highlights for the first quarter in Slide #8. Production volumes in the first quarter of 2026 decreased materially compared with last year. This was primarily due to 2 factors: a program maintenance downtime at Celbi and severe storms in Portugal, which affected operations across all mills. These events had a clear but temporary impact on production.

Importantly, they were largely nonrecurring in nature and in the case of Celbi fully planned as part of our maintenance strategy. Despite the lower production volumes, sales volumes were less affected. This reflects our priority to maintain a regular and reliable supply to our customers despite all the implications of the storms, drawing on inventory management and operational flexibility to minimize disruption along the value chain. As conditions normalize towards the end of the year, operations returned to expected levels, and we entered the second quarter with normalized production, improved availability and a stronger operational base to benefit from the improving market and pricing environment.

Let me now comment briefly on our sales mix in Slide #9, both by end use and by region. Production and sales volumes in 2025 remained broadly in line with 2024 despite a softer demand environment in Europe. Some logistical constraints temporarily delayed dissolving pulp shipments, but we expect full normalization from the second quarter of 2026 onwards. Tissue remains our most important end-use segment in the first quarter, representing 39% of total sales volumes. The decline versus previous periods, usually in the high 40s were mainly due to temporary order delays as well as logistic complications rather than any structural change in demand.

At the same time, we continue to see textiles as a key growth area. In the first quarter, textile-related applications represented already 14% of sales volumes, and this share is expected to continue to increase over time as dissolving pulp volumes ramp up, particularly at Biotek. From a regional perspective, Europe continues to account for most of our sales, representing 61% of total volumes. However, Asia already represents 19%, and this share is expected to grow as our exposure to dissolving pulp and textile end users increase. Overall, this sales mix evolution is fully aligned with our strategic diversification objective, maintaining a strong position in traditional tissue and paper markets while progressively increasing our exposure to higher growth textile-related and Asian markets.

I will now pass the floor to Miguel Silva, Altri's Chief Financial Officer, who will walk you through the main financial highlights of the year.

Thank you, Jose, and good morning, everyone. In Slide 10 and starting with our financial highlights for the first quarter of 2026. Revenues declined year-on-year, reflecting lower met coal prices and the weaker U.S. dollar versus the euro, which had a negative effect on reported revenues. A of the main effects affecting net coal prices was the increase in discounts implemented in January of 2026. In addition to pricing and FX, the quarter was also impacted by control increases in logistics and energy costs largely related to the severe storm in Portugal that Jose referred to earlier.

As a result of these combined factors, EBITDA reached EUR 5.4 million in the first quarter, representing a historically low level for the group. It is important to stress, however, that this performance was mainly driven by temporary and largely nonrecurring factors, including operational disruptions and market conditions at the start of the year. As we move into the second quarter, we are already seeing a much more supportive environment with higher net pulp prices, normalized operations and lower extraordinary costs, which gives us confidence in a sequential improvement in profitability.

Turning to Slide 11. It summarizes the evolution of our EBITDA margin over the last 5 quarters. As a consequence of the factors we have just discussed, namely lower net coal prices, the weaker U.S. dollar versus the euro, the extraordinary logistics and energy costs linked to the severe storms, together with lower production due to the planned downtime, our EBITDA margin was under significant pressure in the first quarter of 2026. You can see that margins were relatively solid through most of 2025 with 14.5% in the first quarter, 16.7% in the second quarter of '25 and 15% in the fourth quarter of '25, while third quarter reflected a softer point in the cycle at 7.1%.

In the first quarter of '26, the margin declined to 3.4%, reflecting the combination of market headwinds and operational disruptions concentrated in the quarter. As we move through the second quarter, we expect the margin to recover sequentially, supported by better pricing, normalized production and the reduction in exceptional costs.

Moving down to the income statement in Slide 12. The low EBITDA level in the quarter naturally translated into an operating loss and a net loss in the first quarter of '26. EBITDA margin remained under pressure in 2025 due to the already mentioned lower prices and the weaker U.S. dollar. In the fourth quarter, margins began to recover as market conditions and FX stabilized. As shown on the left-hand side, we reported an EBIT of minus EUR 6 million in the first quarter of '26 compared with EUR 13 million in the fourth quarter of '25 and EUR 18 million in the first quarter of '25. This reflects the same combination of factors we discussed earlier, lower net pulp prices, the weaker U.S. dollar versus the euro and the extraordinary logistics and energy costs led to the severe storm together with the impact of planned downtime and lower production. On the right-hand side, net profit was EUR minus 7 million in the first quarter of 2026 versus EUR 9 million in the fourth quarter of '25 and EUR 8 million in the first quarter of 2025. In other words, the sharp decline in operating profitability during the quarter was the key driver of the bottom line outcome.

Turning now to costs on Slide 15. As highlighted on this slide, operating costs were abnormally higher in the first quarter, mainly driven by logistics and energy costs, both of which were temporarily impacted by the storms in Portugal. We expect these effects to normalize in the second quarter of 2026. Nevertheless, we have started to see some inflation pressures in some cost items for the rest of 2026. On wood costs, average prices in 2026 remain broadly in line with the 2025 average. That said, we may see some inflation during the year, mainly due to the recent storms in Portugal. These events temporarily constrained local availability and required us to source additional volumes sometimes from alternative or more decent suppliers. At this stage, we see this as temporary rather than structural.

Moving to electricity and natural gas. The severe weather conditions in Portugal affected all mills, leading to several days of downtime and production restrictions. This had a direct impact on energy consumption and production efficiency during the quarter. At the same time, the quarter also included programming downtime at Celbi, and we faced additional costs linked to power grid instability. Finally, energy prices, particularly gas, saw some upward pressure since March following geopolitical developments in Iran.

On chemicals, prices have remained broadly stable since 2024, although as expected, they are correlated with energy prices. During the second quarter of 2026, we have started to see some inflationary pressures, mainly on caustic soda, but it remains manageable and within our expectations.

Turning now to net debt on Slide 14. As shown on this bridge, net debt increased during this first quarter, reflecting the fact that investment levels exceed operating cash flow in the period. Net debt moved to EUR 329 million at the end of December 2025 to EUR 348 million at the end of March 2026, an increase of around EUR 19 million. The CapEx level of EUR 15 million and some other commitments exceeded the operating cash flow generation of EUR 5 million.

In summary, the increase in net debt in the first quarter is primarily investment driven, remains well controlled and is fully consistent with our capital allocation strategy. Importantly, we continue to maintain a solid balance sheet and a very comfortable liquidity position. I will now pass it back to Jose Pina.

Thank you, Miguel. Turning now to returns on capital employed on Slide #15. As this slide illustrates, we are currently going through a challenging cyclical period for the global pulp industry, which has resulted in a modest ROCE. This level is clearly below our historic double-digit average, which stands at around 15% and also well below the strong returns we delivered in previous up-cycle years such as 2022 and 2024. It is important to stress that this performance is cyclical, not structural. Altri's assets remain high quality, competitive and cash generating across the cycle, and our capital discipline has not changed.

Let me now turn to ESG and sustainability, which remains a core pillar of Altri's long-term strategy in Slide 16. First, on sustainable logistics, Altri was awarded the Annual Sustainable Transport Certificate 2025 by Medway. This recognition reflects our increasing use of rail transport, which directly contributes to the reduction of greenhouse gas emissions measured in tons of CO2 equivalent. Second, on partnerships, Altri furfural formalized a strategic partnership with Eucaforest, a company of the Caisse de Dépôt et de Gestion Group during the SIAM event in Morocco. This partnership is focused on technical and scientific cooperation in forestry while also supporting the identification of additional sustainable sources of fiber.

Finally, on Net Zero, Altri is actively implementing its transition road map, fully aligned with international best practices as a long-term decarbonization strategy. During 2026, the group committed to the science-based targets initiative with the objective of achieving carbon neutrality by 2050 and a 2-year time frame to formally submit our targets. Slide 17 to 20, we have some highlights of the growth and diversification projects we have underway. The first of these projects to be finalized is the acetic acid and furfural production unit at Caima that should start operating in 2026.

To conclude, and turning to Slide 21 and 22, let me briefly summarize our perspective on strategic execution. We entered 2026 with a more supportive demand environment following a highly volatile 2025. We are seeing a recovery in demand from China in the hardwood segment where Altri has significant exposure as well as early signs of a more sustainable recovery in dissolving pulp. This improvement in demand is increasingly being reflected in pricing trends, in particular, the BHKP prices in Europe increased with 5 consecutive months between January and May.

As usual, this positive price momentum reaches our accounts with a lag of around 2 months, dissolving pulp prices have also shown a favorable evolution, especially from March onwards. On the cost side, we expect a normalization of the nonrecurring impact stated previously in the first quarter, particularly in logistics and energy. Taken together, the combination of improving prices and a more efficient cost base supports our expectations of a meaningful recovery in profitability in the second quarter of 2026 compared to the first.

Importantly in parallel, we continue to execute on our strategic diversification project. The conversion of Biotek to dissolving pulp is progressing as planned, remains on track for completion by the end of the current year with multiple customer qualifications expected to be gradually overcome during the year. At Caima, the acetic acid and furfural valorization project is expected to start operations in June, followed by a gradual ramp-up towards near full capacity by year-end. At the same time, we continue to invest in AeoniQ with the installation of the industrial unit Caima, supporting the acceleration of production scale and customer qualification in the sustainable textile fiber segment.

To conclude, while the recent near-term environment -- with the recent near-term environment challenging, we are now seeing early signs of improvement in demand and pricing alongside a normalization of costs. At the same time, we continue to execute with discipline on our strategic priorities, strengthening our positioning for the next phase of the cycle. Altri remains financially solid, operationally resilient and focused on creating sustainable long-term value for all stakeholders. Thank you for your attention. We look forward to your questions.

[Operator Instructions] Our first question comes from Manuel Lorente Ortega from Santander.

So my first question, probably it's on European trends. I'm a little bit struggling to justify the current price trend, especially considering the Chinese pricing backdrop or the -- as you were mentioning in one of your slides, the drop in demand in the quarter, and also the very complicated situation of the softwood regime in Europe. So I would like your thoughts regarding -- what is driving this pricing levers hence between Europe and China, especially in this context of somehow high risk on the softwood arena?

Thank you, Manuel. What I would say when we look at pricing effectively, progression of prices in Europe has been faster than in China, although the process originally further in China. I think in China, the recent event of integrated suppliers clearly have an impact in terms of resisting some of the price changes. But nevertheless, mainland China remains supportive. Demand in Europe is a little bit more subdued. But as you know, Europe is a relatively stable market.

Overall, what I would point is the market remains balanced in Europe. And I think that has been the primary driver at these prices. Also the pricing structure, as you know, China works on net pricing. Europe works on contracts and the discount levels that were operated on the beginning of the year, effectively prompted the producers to be more active in terms of price management. What's clearly the case -- so when you look on a net-net basis, even though Europe has been enhanced, if I look at the inventories at port levels in Europe, they remain pretty much in line with historical trends. And effectively, there has been even a slight reduction more recently in March.

So I think Europe is in a fairly stable place. The announcement of USD 50 increase remain, we have, at this point, full confidence that it's going to go through, although as you know, it gets reflected in later on. The other aspect regarding the dynamics between softwood hardwood, we know there's been fiber substitution in the past, that has been at points reversed. I would say the more recent trend and because of the weakness in the softwood market is perhaps a demonstration that some of that substitution is potentially definitive and would not have the same dynamics we have in the past. I will continue to expect to see fiber substitution going forward and supporting hardwood prices, and in this case, [ we will seek window ].

Okay. Understood. And then second question. So Q1 results has been a severe condition by the storm weather conditions in Portugal, as you mentioned. It will be great if you can give a sense of idea of what has been the impact, I don't know, in terms of revenues or profitability levels. To address, let's say, the underlying trend of the business in the current backdrop.

Thank you, Manuel. Regarding the significant storms we've had in late January and actually in all through part of February, sometimes perhaps outside of the country, the full impact has not been fully understood. I mean we've had a series of storms, not just Christmas, but after Christmas, there was at least 2 additional storms very much in the same area. We've had winds in excess of 200 kilometers an hour, which is highly unusual. The prior situation or close to prior to similar conditions have been back in 2018 with Leslie. But obviously, this has, as we've explained, significant impact, not just in terms of the stability of operations, we've had continuous shutdowns until operations stabilize.

We were able to do control stops in all our units ahead of the storm or the day before the storm in expectation of the severity of the storm as it came through. But then beyond our facilities, I would say the 2 most significant impacts were on, first of all, obviously, energy because it requires significant more consumption, particularly natural gas when you have unstable operations. The OPEC was shut down for close to 2 weeks. That dealt with a particular incident where one of the cranes that is installed for the new line field, which will be operational by the end of the third quarter, actually collapsed even though the damage was minimized.

So there was a series of events. But beyond that, you have logistics apart from communications for 3, 4 days, there were significant restrictions in communications in the area. We've resorted to obviously satellite and that helped us overcome some of the constraints. But on logistics, in particular, we had the main port that we to shutting down essentially for a month. It has already had some complications back in December, which delayed some of the shipments. But then because of the storm, essentially was shut down for about a month. You've had rail shutdowns, the main line to Biotek, for example, was shut down because of damage in the line that's still being restored, and we don't expect that to be restored possibly for a few more months.

So all in all, you start building all of these complications, reduce production levels, very, very tightly controlled sales because we wanted to maintain service levels to our customers, higher energy costs, higher logistic costs and then on fiber, the fact that we have to resort to additional sources and more expensive sources of raw material of wood. As you can imagine, I think the public figures, there's been well over 30,000 hectares impacted in terms of forestry. That's going -- that's now being resolved, but it will also take some time. So we would estimate at least that numbers in terms of full impact, possibly closer to the range of about...

And just to say, Manuel, that all -- most of those situations with a few exceptions have now normalized, and this is reflective of the comments we made regarding how are we looking at Q2 and onwards.

Our next question comes from Bruno Bessa from Caixa Bank.

I will start with the dynamics of the pulp industry and following up on this topic. We have seen prices going up, but it's true that we have also seen some resistance in China over the last month or something like that. It seems like the last price increase that has been announced for China has not been passed through and there are difficulties in the market to see that.

It is also true that next year will be a year of significant new capacities coming to the market in Indonesia. And already by the end of this year, it is also expected that some Chinese players accelerate again new capacities to the market. So my question here is, I understand that you are more positive for Q2 because prices are going up, cash costs are going down. But how long do you think we could see an improvement in the market in terms of pricing considering all these dynamics in terms of the supply evolution and the risks that exist on the demand front, considering the current macro backdrop. Are you concerned about prices heading into the end of the year? Do you think the price increase announced in China will be passed through? There is room for prices to go even above those levels until the end of the year. So just trying to get here a bit of your view about the potential for pulp prices to continue going up. This will be my first question.

My second question will be related with the conflict in Iran. You already mentioned that there are some risks on the cash cost front because of logistics and energy costs, even though you are partially hedged. Just trying to understand if you are seeing any kind of slowdown in the demand caused by this conflict? And if you could guide us a bit on your expectations in terms of impact coming out of this conflict, it will be great.

And the last one, just a bit of housekeeping work and looking to the message that you provided and the guidelines that you provided in the last earnings call, you mentioned that you were expecting by then cash cost to be up by low single digits in the year. You were also mentioning EUR 50 million to EUR 60 million CapEx for this year and net debt to be at the same level seen in 2025, which I believe was EUR 329 million. So just trying to understand if you keep these guidelines provided in the last conference call or not.

Thank you, Bruno. let me start with the first question regarding the price dynamics. And you mentioned multiple comments regarding, I'll say, more recent resistance in particular in China. I think I have commented already regarding the European situation, which we believe has been supportive and will continue to be supportive. In China, effectively, there's been some more resistance. Regarding the last price increase, we don't see it as not having gone through, I think, partially went through, not fully as was originally intended, that help with some of the dynamics related to the market and some of the new integrated capacities coming up to the market as well.

But when you look at it in the near term, so in the next year, 1.5 years, effectively in Indonesia, you have the OP2 project that has been already delayed. There is an expectation that perhaps it will not necessarily come on stream as expected late this year, early next year. We'll have to see for that. But the project has been delayed. As you know, Indonesia has implemented significant forestry limitations, restrictions. Those haven't yet fully passed through, but we believe that's going to create some constraints in terms of wood availability or fiber availability for some of those needs.

But OP2 effectively is focused on the Asian market. So we don't expect significant impact at least directly, certainly in Europe, perhaps indirectly through some of that fiber filtering through into other markets. But Asia Pacific, as you know, we have half of the global -- more than half of the global population and more than 50% of the increase in middle class over the next 5, 10 years will be in Asia Pacific. Asia Pacific will continue to be a significant engine of growth across some of these products respective of substitution.

So even though there's additional capacity, I think OP2 to if and when it comes on stream, we're not, let's say, overly concerned in terms of the supply demand dynamic, at least on our core markets. In China, effectively, by the end of this year, there's new capacity that are likely to come on stream. you follow the trend prices on fiber in China, they have been on the way up. It's expected that, that trend likely will continue. There are questions related to replanting of those forests because of the return compared to what was originally achieved in construction. But nevertheless, there's more availability altogether, I think there's about 6 million hectares of eucalyptus forest or close to in China, but not all of them are being exploited for production in a regular way.

But as I said, the price levels for fiber have been increasing, which is likely going to impact at least some of those new capacities. China, although has been working on more self-sufficiency, they've also been significantly pressured with inflation, and we have now a trend towards what they call evolution to try and manage any excess capacity in the industry that could potentially impact their own operations.

So that's a phenomenon that I think going forward, we may see some potential changes or eventually some delays of projects, although we have no doubt that China will continue to increase, but this is primarily integrated capacity. Moreover, and beyond purely just the pulp market, the BHKP market, let's not forget that we're increasingly more exposed to dissolving pulp. Dissolving prices have been supportive. There's no new capacity in dissolving markets in China. There's a series of nonintegrated players.

There's no new viscose plant being built with the exception of a couple of licenses for a different Asian player who will be converting part of their own production into dissolving -- that's all captive. But we see a lot of growth in other fibers, particularly in lyocell where potentially capacity has more than doubled in the last 3, 4 years. And that's likely going to continue, not just the largest incumbent in Asia, but from multiple other nonintegrated players, some of which are customers of ours. And obviously, that's supply that we would aim to cover.

Just as a side note, besides the tariffs that were implemented last year that has significant restricted activity on textiles and viscose this year, we've seen and recently visited China, we've seen utilization rates at these plants above 90%, which is very, very significant. I don't think they've been this high for a number of years. Part of that is also driven by the fact that polyester staple fiber has been going up. Fossil-based fiber is close to double prices because of the price of oil. And those dynamics are also playing a role in terms of demand there.

Turning to your second question, Bruno, on Iranian implications, we -- in terms of our exposure, obviously, natural gas has been an area of concern. We are significantly hedged this year. So we haven't seen a significant impact there. We've seen some impact, but as I said, not a significant impact. The greatest impact came from consumption because of the instability of operations during the first quarter as we recovered from the storm. Apart from that, I think potentially the most impact is going to be on logistics. We do have more freight container logistics, in particular to Asia.

And when I say Asia, also in the Pacific, so China, India and a few other places. And those return containers, obviously, with larger or longer routes does have an impact on overall cost. So we'll closely follow that. Hopefully, the geopolitical situation will stabilize in the next few months. So everyone expects. But nevertheless, we'll be tracking that very closely.

Those will be, I would say, the 2 potential impacts that we may see. Now on the other hand, -- as you know, historically, pulp prices have benefited from geopolitical disruption. And we've seen that in terms of some of the demand from a few of our customers, they tend to create or actually hedge some of their supply chain risk. And that's been a little bit the case, although not to the levels that we've seen a few years ago.

So we're not overly concerned in terms of any future significant destocking process. We're keeping our own pulp inventories relatively low. And when I say relatively low, below what we would normally carry as a precautionary measure. to ensure also that we continue on the one hand to serve customers, but beyond that, that we manage our working capital carefully. On the cash cost regarding your third question, the indication we gave for 2026 was in the range of middle single digits for the year on variable costs. That is still the case despite the fact that we've had some cost pressures in the first quarter because of the storms.

But I would say that's still our current objective. And when we look at the remaining of the year, we believe that that's still achievable. There are some uncertainties in particular on the fiber cost, so that could be one unknown that we'll have to track closely as well as on energy. The demand level seems to be relatively strong, and we hope some of that will also compensate overall, at least in our dilution of fixed costs. Regarding assets or just before that, regarding CapEx, we're still pointing towards the range of $16 million. So that's in line with what we said in the last call.

And regarding net debt, depending on how the remaining of the year goes, obviously, with the first quarter that we saw somewhat of an increase in our overall net debt. We expect for the remaining of the year, things to be a bit more balanced. But nevertheless, we would still likely see a slight increase in net debt versus the end of 2025. I hope I covered all your questions.

[Operator Instructions] The next question comes from Antonio Seladas from AS Independent Research.

First one is related with if you -- I think that you mentioned a rough estimate for nonrecurring costs on the first quarter, but I was not able to hear. So if you can confirm the figure. The second question is related with your COGS pressure or performance over the first quarter. I think that there was -- well, basically, COGS increased by around EUR 12 million sequentially from the fourth quarter to the first quarter. Meanwhile, your tons sold were more or less the same. So I think there's some pressure here on COGS. If you could provide some color on it? And last question is on revenue side. On the other business, which is, I think the bulk is biomass, figures were also on the weak side. I don't know if there's any particular reason to explain it, seasonality, the storms or any other reason?

I'm sorry. May I ask you to repeat your first question? I didn't get it fully clear.

I think that -- well, I think that you mentioned a rough estimate for nonrecurrent costs on the first quarter related to storms and so on, but I didn't heard the figure. So if you could clarify, if I understood well.

Yes. Okay. Thank you. So I'll ask as well Miguel to comment a little bit on the cost side. But regarding the figures in terms of the impact of what we've seen, and again, all considered, I mentioned energy, logistics, operation instability, obviously, the difficulties we've had with sourcing fiber because of not only availability, but also we have to go to more stream locations. And some of that instability obviously remained. It had an impact in terms of our overall production levels, plus we have -- which is a different topic we've had also this program, regular maintenance stoppage of Saudi that's purely related to the storms -- we estimate something closer to about EUR 10 million.

You mentioned EUR 10 million.

I'm sorry?

You mentioned EUR 10 million, yes?

Closer to EUR 10 million overall.

Closer to EUR 10 million.

And let me ask Miguel perhaps comment on your cost.

If I correctly understood, I think it's related to the increase of COGS from the previous quarter to this quarter. And what happened in the fourth quarter is that we had some nonrecurrent positive effects. Well, not exactly nonrecurrent. They usually happen on every fourth quarter of the year, and that has a positive impact on the cost of that quarter, which are not in this first quarter. This is the only significant effect that I remember, too.

Okay. On the biomass, maybe you can provide also some information on it.

So on the -- we are providers of biomass products to Greenvolt as well. We have bioproducts. Our bioproducts business is very much related to also production levels, particularly in China with sulfate. But in essence, it's basically due to seasonality and some related to some of the revenue associated with our, as I said, tertiary biomass.

There are no further questions from the conference call. We'll start now with the written questions. Our first question comes from Guilherme Neves. Out of the one-off effects during the quarter, what is the impact directly related with Kristin storm impact?

Just this was already replied. So first question was the reply to this, the answer to this and just now was already answered.

Thank you very much. There are no further questions. So I'll now hand it over the session to Mr. José Soares de Pina, Altri's CEO.

Well, thank you very much again for joining the call. As we've stated, we're seeing a positive development in the current near-term scenario on the business. We're now operating under normalized conditions. So we're looking forward to the rest of the year and obviously, a positive evolution as well in terms of the industry. So thank you so much for joining, and have a good day.

This concludes today's event. We thank you all for your presence. Ladies and gentlemen, you may now disconnect your lines.

Good morning. We welcome you to the Altri Full Year 2025 Results Conference Call. [Operator Instructions] I will now hand the conference over to Mr. Rui Cesario, the Head of IR of the Altri Group. Please go ahead, sir.

Good morning. Thank you for joining Altri's 2025 Results Conference Call. We'll review our financial performance, market conditions, operational highlights and outlook followed by Q&A at the end. To address these topics, we have with us the CEO of Altri, Mr. Jose Pina; and Mr. Miguel Silva, the group's CFO. I will now pass the floor to Mr. Jose Pina.

Good morning. Thank you, Rui, and thank you all for attending Altri's conference call. We're pleased to host this call with investors and analysts to share Altri's results and our views about the market environment and challenges.

If you turn to Slide #2. We start with the main highlights of 2025 and some consideration. 2025 was a challenging year for the global pulp sector. Market conditions were marked by excess supply, alongside increased uncertainty following tariff announcements from the United States. On the demand side, the improved visibility on U.S. tariff conditions and strengthening Asian demand are already translating into a more positive pricing environment in early 2026.

On the supply side, we expect the gradual rebalancing of the market with less efficient capacity, namely in the Softwood segment is rationalized. In 2025, EBITDA reached EUR 94.1 million, down 57% year-on-year with a margin of 13.4%, reflecting weaker pricing environment and the depreciation of the U.S. dollar.

Despite these external pressures, we continue to execute on cost optimization. Cash cost declined for the second consecutive year, reinforcing our operational discipline and strengthening our resilience as market conditions improved. During 2025, we continued to advance our growth and diversification strategy, taking decisive steps beyond our core pulp business.

We strengthened our portfolio through 2 targeted non-organic growth initiatives, the acquisition of the majority stake in AeoniQ, positioning the group in advanced sustainable textile fibers and the strengthening of our forestry platform in Northern Spain through Altri Forestal. In parallel, we remain fully focused on the execution of our industrial projects.

The acetic acid and furfural project at China is expected to be completed in the first half of 2026 while at Biotek, the gradual migration of BHKP production to dissolving pulp continues with full conversion planned by the end of 2026. These initiatives reinforce our strategic diversification, enhance long-term value creation and position the group for more resilient and sustainable growth.

Moving to Slide #3. Global pulp demand closed 2025 on a healthier footing, although with clearly diverging trends across fiber types. While overall demand improved performance deferred markedly between hardwood and softwood markets.

China and the broader Asian region were the primary drivers of growth, underpinning volumes and supporting market momentum . In contrast, Europe and North America experienced a moderation in demand following a relatively strong performance in 2024.

In Slide #4, we want to highlight that a recovery in the final months of the year allowed the dissolving pulp market to close 2025 with positive momentum. Demand improved progressively as the initial negative impact of U.S. tariff implementation on the Asian textile value chain was increasingly absorbed. This normalization supported a more resilient demand environment and an increasingly constructive backdrop for dissolving pulp as we move into 2026.

In Slide #5, inventories at European ports have remained broadly stable since the second half of 2024, staying close to historical averages of around 1.4 million to 1.5 million tonnes. This level further reduced in January 2026 to 1.29 million tonnes.

In Slide #6, we talk about pulp prices, and during the full year of 2025, Europe's average BHKP prices declined by 12% in U.S. dollars and minus 15% in euros. In the fourth quarter 2025, prices were also down year-on-year, but showed a sequential recovery in the last quarter of the year. Prices rebounded quarter-on-quarter with a fixed index ending December at around $1,100 per ton.

In Slide #7, dissolving pulp prices closely linked to the textile value chain were pressured through early 2025 due to geopolitical uncertainty. Since this summer, the market has stabilized and in early 2026 is showing the first signs of recovery as fundamentals improve and demand in key regions begins to normalize.

On Slide #8, production and sales volumes in 2025 remains broadly in line with 2024 despite a softer demand environment in Europe. Some logistical constraints temporarily delayed dissolving pulp shipments, but we expect full normalization from the second quarter of 2026 onwards.

Going to Slide #9. On a segment level, both end use and geographic mix remains broadly in line with 2024 with some increase in Turkey and Middle East.

I'd now like to pass to Miguel Silva, Altri's CFO, who will comment on the main financial highlights.

Thanks, Jose. In Slide #10, throughout 2025, our performance was constrained by a challenging market environment. Lower pulp prices combined with a weaker U.S. dollar against the euro placed pressure on both revenues and profitability across the year. However, market fundamentals began to improve towards the end of the period with a gradual recovery during the fourth quarter of 2025.

Going to Slide 11. Looking on a full year basis, revenues and EBITDA declined, reflecting the weaker pricing environment and as well as FX dynamics in 2025, especially when compared with the more favorable market conditions seen in 2024.

On Slide 12, we can see that EBITDA margin remained under pressure in 2025 due to the already mentioned lower prices in weaker U.S. dollars. In the fourth quarter, margins began to recover as market conditions and FX stabilized and we have some positive impact of recurring items that usually occur in the fourth quarter.

In Slide #13, despite being a challenging year, EBIT and net profit improved in the fourth quarter of '25, rebounding from the quarterly low recorded in the previous quarter, driven by the recovery in pricing, FX stabilization and ongoing cost efficiency measures.

We can move to Slide 15, where we highlight that Altri continuous focus on cost optimization, delivered a second consecutive year of cash cost reduction in 2025. On the wood side, average wood costs were slightly lower year-on-year, supported by a more efficient sourcing mix.

On energy, electricity and natural gas, with normalization of Celbi cogeneration turbine in late March 2025, improved electricity outputs and plant efficiency. As a result, the energy area, it was a slightly better contribution compared with 2024. And finally, on chemicals, prices continued their downward trend and overall chemical costs in 2025 were marginally below the previous year.

This improvement reflects strict cost management across all major inputs helping to mitigate the impact of a softer market environment.

In Slide 16, we can see that net debt decreased in the quarter, supported by stronger operational cash flows and the receipt of recurring cash inflow linked to the group's operating activity which typically occur in the final quarter of the year.

Slide 17, we can see the increase in net debt in 2025, reflecting lower EBITDA, higher investment levels linked to our diversification projects, namely the dissolving pulp conversion at Biotek and acetic acid and furfural at Caima as well as the acquisitions of AeoniQ and Greenalia.

I'll now pass it back to Jose Pina.

Thank you, Miguel. If you move to Slide #18, a challenging year for the pulp industry resulted in a modest 6% ROCE for 2025, below our historically double-digit average, which remains a solid 16%.

Slide #19. In 2025, Altri continued to strengthen its leadership in sustainability and responsible operations, earning recognition from several environmental and rating institutions. Altri was included in CDP's 2025 A List, positioning the group amongst the top 4% of companies worldwide employment-related transparency and performance under the world's leading independent environmental reporting system.

The group has successfully issued EUR 50 million in Green Bonds with a maturity of up to 8 years to finance Biotek's strategic conversion project from paper pulp to dissolving pulp. To mark the 30th anniversary of EMAS program, the Portuguese Environment Agency, APA, recognized companies with long-standing environmental excellence. Celbi received the Gold Certificate for maintaining EMAS certification for 20 years, while Caima was awarded Silver for its 15th-year commitment, both highlighting our continuous focus on environmental best practice.

From Slide 20 to 22, we have some highlights on the growth and diversification projects we have underway. The first of these projects to be finalized is the acetic acid and furfural collection unit at Caima on our Bioproduct segment and should start operating during the third quarter of 2026.

On Slides 23 and 24, we share some of our conclusions and perspectives. First, the global pulp market remained highly volatile through 2025. Year-over-year demand recovery was interrupted by U.S. tariff announcements, which affected global sentiment and slowed purchasing activity, particularly in Asia and China.

Towards the end of 2025 and into early 2026, market conditions began to improve, weak demand recovery more visibly in the hardwood segment and dissolving pulp also showing first signs of rebound.

Second, BHKP prices in China and Europe reached their early lows in second quarter of 2025. A more sustained recovery only emerged towards the end of 2025 and into early 2026, supported by improving Asian demand. Price increases announced in the first quarter of 2026 will begin to affect results from the second quarter 2026 onwards, reflecting the usual 2-month pricing lag.

Third, severe storms in early 2026, most notably Storm Kristin, caused damage, production stoppages and significant logistical disruption across our industrial units. The closure of the Port of Figueira da Foz, our main logistics hub, for several weeks, as well as disruptions on rail transport further intensified the operational constraints. Although operations normalized by March, the impact on first quarter 2026 results will be material driven by higher logistic costs, lower production levels, increased energy consumption and reduced surplus energy generation.

Fourth, on the geopolitical front, the immediate impact of the cost of conflict in the Persian Gulf region has been increasing energy costs, partially offset by our hedging strategy, especially on natural gas. Should the situation persists, inflationary pressures could indirectly raise costs across logistics, chemicals and wood.

In 2026, the group remains firmly focused on cost optimization. Variable costs are expected to rise slightly, reflecting the impact of the early year storms while excluding any potential prolonged effects from the Iran geopolitical situation.

Our diversification program continues to advance as planned. Biotek's full conversion to dissolving pulp remains on track for completion by year-end 2026. Qualification-related delays should begin to ease for the second quarter, improving visibility in its financial contribution. At Caima, the renewable acetic acid and furfural recovery project is expected to be completed in late first half of 2026, enabling sales of a new higher value bioproduct from the second half of the year.

Number seven, regarding Project Gama in Northern Spain, the group continues to wait the integrated environmental license before taking a final investment decision. In 2025, the project achieved 2 important milestones: the receipt of a favorable Environmental Impact Statement, DIA, by the Xunta of Galicia and the awarding of the STEP label by the EU Climate Agency. Altri has also strengthened its presence in the region through targeted forestry acquisitions and is pursuing an alternative electrical connection solution to ensure the project maintains its classification as a Strategic Industrial Project.

At Caima, a pre-industrial unit for AeoniQ will be installed to support industrial scale-up of these next-generation sustainable fiber. This unit will enable higher production volumes and accelerate customer qualification processes, strengthening our position in the rapidly expanding sustainable textile fiber segment.

To conclude, 2025 was undeniably a challenging year for our sector. shaped by the uncertainty created by tariff announcements, geopolitics and the evolution of the U.S. dollar. As we enter 2026, we're facing some unexpected events, including the severe storms, I referenced before in Portugal and the geopolitical tensions in the Gulf region. Even so, industry fundamentals appear more solid today, demand has strengthened over recent months and pricing trends remain on a positive trend.

As we have highlighted, the first quarter will reflect the temporary impact of the storms, mainly on logistics, production and energy. However, we expect operations to normalize in the second quarter profitability to exceed the levels reported in the fourth quarter of 2025. Despite short-term volatility, our strategy remains unchanged and focused on operational excellence, cost discipline and the execution of our diversification project.

We remain confident in Altri's ability to deliver sustainable value creation. Thank you for your attention, and we look forward to your questions.

[Operator Instructions] Our first question comes from Manuel Lorente from Santander.

Yes. Probably my first question is regarding the extremely supportive cash cost trend in this fourth quarter, whether you can give us an indication of what has been the main reasons behind this positive performance. And more or less, whether you can give us an indication of what we should expect for this year?

Thank you, Manuel. So basically, I think with the continuation of a lot of our efforts, fourth quarter there were, I think, a few additional reasons. One was we did not have any campaign for dissolved pulp. As you know, dissolving pulp usually has a somewhat higher cash flows because of the specific consumption of fiber but nevertheless, it was very positive on all fronts.

We have -- we run very efficient operations. Usually, you have a few items that sometimes impacts such as some of the remuneration tariffs for energy. But those are on a yearly basis, they ended basically evening out. So even though the impact may be reflected more in the fourth quarter, but I think it's an indication of what we have been doing and all of the work that the company continues to pursue in terms of optimization in its operations.

I think if you look at 2026 in terms of our cash costs, considering the first quarter with the impact of the storms and some of the geopolitical uncertainties particularly around energy costs, it's likely that we'll see a slight increase for the full year but it will still be somewhat in the low single digits. So that would be our expectation. Thank you, Manuel.

The next question comes from Luis de Toledo Heras from ODDO.

The first one refers to the tariffs. I mean, I don't know if you could explain the final outcome. Obviously, the U.S. market is not directly an important market, but it might activate some other export markets and the news that I've -- look, I don't know if you have a complete exception or partial exception. If you could elaborate on that front, it would be great.

I don't know if you want me to post the other 2 questions. In that case, I mean, the second one would be referring to the depreciation level. I think it's slightly lower than the last year. I don't know if there's any reason on that front.

And my last question refers to the AeoniQ acquisition. I've seen that the goodwill increases in the second half by around EUR 20 million. You mentioned that CapEx this year would be more inclined towards the EUR 70 million range and specifically, I thought you were mentioning an initial investment on AeoniQ of EUR 10 million. I don't know if you could elaborate more details on the AeoniQ acquisition and its consolidation in the quarter.

Sorry, Luis, could you just repeat the first question, please?

Okay. It's regarding the U.S. tariffs. When you mentioned that the things have cleared, I don't know if you could elaborate there if there's been a total exemption of wood -- hardwood pulp to the U.S. I know it's not a significant market for you, but it might activate other markets, which have different treatment in tariffs and so on. I don't know if you could give a brief outlook on the tariff equation.

Yes. Thank you, Luis. Regarding your question on the U.S. tariffs and I think these have now normalized, but at least there is some greater clarity concerning some of the agreements that have been made. What still remains unclear is going to be the impact of the U.S. Supreme Court decision regarding the tariffs and ultimately what the final level will be. So that, I think, we'll have to wait and see.

But I would say the anxiety related to all of the volatility associated with U.S. tariffs at this point has been somewhat mitigated also by actions in different regions of the globe, which have been actively pursuing diversification of the market. So we don't see, at least in the short, medium-term a significant disruption unless obviously something changes, which you can never fully exclude.

If I understood you correctly, there was a second question around depreciation level probably related to the U.S. dollar. Maybe Miguel will give you an update.

If I understood correctly your question. I think it was about lower depreciation that we have in 2025 and that is very easy to explain. So we have an important [indiscernible] and the depreciation in 2025, that's why there is a significant decrease in depreciation in 2025 compared with 2024.

Yes. And regarding your AeoniQ question, so the acquisition, we did not disclose at the time specific terms on the acquisition. The acquisition was a combination of the share purchase plus a capital increase. And that's what you see reflected particularly on the goodwill related to that transaction.

Regarding the investment that we have for this year, we currently, our best estimates is in the range of EUR 50 million to EUR 60 million, excluding subsidies, and that includes the conclusion of the large project that we have underway plus as well this initial market pulp line that we have also on pulp.

The next question comes from Bruno Bessa from Caixa Bank.

Yes. And the first one, if you could provide a bit of color on the sentiment coming out of this week big event in Shanghai. What is your sentiment of the industry? And if you are seeing any kind of concern or demand slowdown caused by the conflict in Iran?

Then the second question, you already provided some visibility on the CapEx for this year. Just trying to understand if you still expect net debt to go down this year despite the still relatively low pulp prices and relatively higher CapEx when compared to mid-cycle numbers. And the third [indiscernible] so that there was a relevant duration of the fair value of the biological assets this year. If you could please explain the...

Okay. Thank you, Bruno. So on the first -- your first question regarding Shanghai sentiment. I think overall, at least what we have been -- what we have experienced is actually I would classify as a positive sentiment. The market has seen some tightening. I think out of Shanghai, at least from some of the discussions that have taken place, the likelihood of further price increases, I would say, is high given the tightening of the current supply-demand imbalance.

There's a number of scheduled turnarounds in the second quarter that will clearly impact it, but overall, I would say there is somewhat of a positive sentiment that came out of Shanghai and concerning demand flow from some impact in terms of Iran, I would say the key, let's call it, concern at this point is really related to logistics. It may -- the flow of logistics, obviously, is becoming longer. The return container flow is potentially reduced.

So we should see not only an increase in terms of some of the logistic costs between Asia and Europe but also potentially some specific disruptions at given times, just out of prudence in terms of ensuring that there is some regular flow of transshipment. But I would say, at least at this point, that could potentially impact some of the exports from China, although they have been reduced. But on the whole, I would say that's the only uncertainty at least in terms of logistics flows that we see at this point, apart from an increase in energy costs, which also impacts, as you know, logistics.

On the CapEx for this year, as I've mentioned, our estimate at this point is $50 million to $60 million rate, excluding subsidies. In terms of net debt, we're looking at being somewhat at the same level as we finish the year. And it really depends on the optimization of some of our CapEx investments. But I would say the current level is probably where we're going to be focusing on. Regarding the biological assets, maybe Miguel would like to comment. There was a change in biological asset valuation.

Yes. It happens. Sorry, because I [indiscernible] question, but there is the same work that we do every year in order for the valuation of biological assets and a reflection of that value that we do every year. So no major difference regarding the previous year.

The next question comes from Stefano Maina from JB Capital.

Thank you for explaining your results. The question I have relates to mainly the outlook for 2026. So we are seeing an improvement in demand and an optimistic sentiment from what you're saying. The question that I have is more related on what, in your opinion, is going to be driving a potential upside in prices.

From my understanding, the majority of this upside is coming from the supply side, a constraint in supply. And I just wanted to know what's your view on that? And apart from that, if you think that considering that from my knowledge, the situation in Indonesia with the revocation of the permits has been kind of improving, what are your expectations on that side?

Thank you, Stefano. I will say in terms of the outlook for 2026, clearly, we see at least some improvement in sentiment. You don't have -- apart from actually some integrated capacity in China, you don't have really any significant capacity coming on to the market this year. There's been a delay as well related to some of the projects in Indonesia and into 2027, major capacity introduction, I think, will be somewhat muted as well.

So effectively, when you look at not just the short-term but the medium-term, so the next 12, 24 months, primarily constraints in supply given that there continues to be a positive trend in terms of the development of demand will clearly tighten the supply-demand ratio. I think in Indonesia the cancellation of a number of forestry licenses as we refer has been a factor at least impacting some of the sentiment in the industry.

If you look at where the fiber sourcing is going to come from, specifically for some of the new capacity in Indonesia and also in China given the levels of fiber supply has not changed dramatically, at least in the last 6 to 12 months, and we've seen already an increase in fiber prices in China, there aren't many additional sources of fiber in the region.

So Vietnam being obviously the key markets for that. And all of those movements will likely constrain somewhat at least the availability of raw materials. And that, in turn, will, I think, reinforce a positive sentiment. So even though we're seeing a number of factors substantially impacting at least in the short-term, I would say, the maintenance stoppages that have been planned will clearly support that trend.

But we have, I would say, a somewhat positive sentiment at this moment. And we see that in the order flow from customers not just on paper pulp but also on dissolving pulp, where we have seen also an upward strengthening of prices in near-term and we're also seeing an improvement in sentiment as well from a demand perspective, the big information. So overall, I would say those would be the key elements.

[Operator Instructions] The next question comes from Antonio Seladas from AS Independent Research.

So I have 2 questions. First one is related with volumes in the fourth quarter were probably slightly below my expectations. So I don't know and taking into consideration that production was okay, maybe you can explain why volumes -- and taking into consideration that prices increase, maybe you can explain a little bit more why volumes were on big side? So first question.

Second question is related with 2026. You already mentioned some -- already provided some color on it. Maybe you can also talk about volumes, taking into consideration that Biotek is now in the transition period. So should we be worried about volumes or not?

And finally, on wood prices, wood prices have been coming down, your average figure. So at least taking into consideration the accounts that we do on our spreadsheet. Nevertheless, they are still higher than the levels before 2022. So my question is, should we expect wood prices to continue to adjust? Or do you think that current prices are okay?

Antonio, may I ask you if you could repeat your second question, please?

The second question was on the -- last one was on the -- second question was on volumes. So volumes for -- volumes sold for 2026, taking consideration that Biotek is under this transition period that could impact volumes. So if you could -- well, if it's fair to expect volumes in 2026 at least similar to 2025.

Okay. Thank you. Well, first of all, in terms of -- from a volume perspective, volumes are at a production level 2026 -- 2025 versus 2024 was in line with -- actually with a slight increase. And you could see that production, in particular on dissolving pulp -- so paper pulp was flat, dissolving pulp was an increase, which was a reflection of the campaigns we have, particularly for qualification products.

In terms of sales, I think it was a slight decrease. So a lot of that, again, you have -- in particular, when you look at Biotek which is where you would have seen the biggest change, we have not -- we did not have any production of -- in dissolving Biotek in Q4. But primarily, we've been focusing on ensuring that we have a good level of inventory for all of the qualification processes taking place.

So I will say through these months and this period of qualification, I would ask you not to overly focus on production levels when it comes to dissolving because they're going to be very deferring from quarter-on-quarter until we have the full qualification then by the end of this year.

On recovering wood prices, we've seen a stability in terms of wood prices last year. There was actually some improvement, a lot of it came from the mix -- sourcing mix. We've reduced some of our imports outside of the region and then obviously, have a positive effect -- positive impact in our wood prices.

So this year, one is so far from energy, which I've mentioned, we don't expect to see significant changes in terms of wood pricing on most sources, but there may be a slight increase given the current inflationary pressures, particularly associated with energy. And when you look at somewhat of an impact, which we're still assessing in terms of on the domestic market, domestic sourcing market, first quarter, there was clearly a reduction in terms of supply in the central region of the country.

There are additional costs associated with the harvesting and the processing of wood because we have to get into certain forestry areas, which are difficult to access, which have roads which are blocked. But a lot of that work is ongoing. That should normalize anyway going forward beyond the first quarter. But clearly, that those will potentially pressure upwards somewhat wood prices. But for the whole year, and given that we don't expect any significant increase in terms of exports from beyond Iberia, I would say wood prices will remain relatively contained with, I guess, the potential impact of energy as I said, which could possibly put some inflationary pressures on fiber.

There are no further questions from the conference call. We'll start now with the written questions. The first question comes from [ Tote Florio. ] And the question is, despite these results, does Altri continue to distribute dividends. And the next question is, will there be dividends.

Thank you for the question. Regarding dividends, as you, I'm sure, are aware, we do not have a dividend policy. But nevertheless, we have historically maintained a relatively stable and healthy shareholder remuneration. If you look over the last 5 years, in the range of 5% to 6% yield. I would say that decision will be made in the coming couple of months, but we continue to be and will remain very focused on shareholder remuneration. So although I can't comment specifically on dividends until we have proposals to our AG in May. But as I said, that's something that we remain very focused on.

So I'm reading the last question from the written area of questions. And it's regarding the hedging energy policy in place for 2026 in Altri. So I'll pass it to Mr. Miguel Silva, who will answer the question.

Yes. I think the question is mostly around gas. As we do every year, yes, we usually do some hedging for the gas prices and this year is not different from another. So we have at a fixed price, more or less 60% of our consumption. So we just have 40% of our consumption roughly in the open market. So we have a big price of slightly higher than EUR 30 per megawatt hour for around 60% of our consumption.

I'll pass to the operator.

There are no further questions. So we'll hand over the session to Mr. Jose Soares de Pina, Altri's CEO. Thank you.

Well, thank you very much for attending our results conference call, and we remain focused for the coming quarters, ensuring that we continue to deliver and looking forward to our next call in May. Thank you very much.

Good morning. We welcome you to the Altri Third Quarter 2025 Results Conference Call. [Operator Instructions]

I'll now hand the conference over to Mr. Rui Cesario, Head of IR of the Altri Group. Please go ahead, sir.

Good morning. Thank you for joining Altri's Third Quarter '25 Results Conference Call. We will review our financial performance, market conditions, operation highlights and outlook, followed by Q&A at the end. We have with us the CEO of Altri, Mr. Jose Pina; and Mr. Miguel Silva, the group's CFO, to address these topics.

I will hand over to Mr. Jose Pina.

Thank you, Rui. Good morning, and thank you for attending Altri's conference call. As always, we're pleased to host this call with investors and analysts to share Altri's results and our views about the market environment and challenges.

If you turn to Slide #2. We start with the main highlights of the third quarter of 2025. In the pulp market, global hardwood pulp demand picked up in recent months. However, China's additional capacity and increased access to domestic raw material have limited recovery in prices. Demand for dissolving pulps and Asian textile chain has stabilized in the third quarter after a more challenging first half of the year as a result of U.S. tariffs announcement and lower activity in the sector from some Asian countries.

EBITDA reached EUR 11.6 million, a 79% decrease year-on-year with a margin of 7.1%. This is mainly the result of lower pulp prices, which have amplified -- was amplified by the devaluation of the U.S. dollar. Nonetheless, and despite the difficult environment, our cash cost continues to decline compared to previous periods.

On diversification and growth at Biotek, the migration of BHKP production to dissolving pulp remains on track for completion by the end of 2026. The acetic acid and furfural project at Caima is progressing. And we've completed in the third quarter of 2025, the acquisition of a majority stake in AeoniQ, a Swiss company focused on sustainable textile fibers.

Moving to Slide #3 and looking at market highlights. We have seen some acceleration in global pulp demand over the summer months. Many industry players became more aware of the tariffs effect and the impact in their financials. China and Asia are the main drivers, while Europe and North America have slowed after a strong 2024. Hardwood pulp demand grew by 8.8% year-on-year with China showing a 13.4% increase and the rest of Asia/Africa up 18.1%. Fiber to fiber substitution continues more obviously every year. The challenges faced by softwood producers are even higher than hardwoods with main clients adapting their products to higher hardwood use anticipating challenges or in this case, continued challenges on softwood.

In Slide #4, dissolving pulp demand was affected by U.S. tariffs impacting the Asian textile value chain, but we have been seeing recovery in the past months. Overall, global dissolving pulp demand declined slightly by 1% to August, which compares with minus 4% by June of this year and minus 8% in the first quarter as well of this year.

Turning to Slide #5. Inventories at European ports have been stable since the second half of 2024, in line with the historic average of 1.4 million to 1.5 million with a slightly lower trend.

In Slide #6, we comment on the evolution of the U.S. dollar versus the euro during 2025, which has amplified an already material increase in pulp prices. Average BHKP pulp prices in Europe fell by 25% in U.S. dollars and 30% in euros compared to the third quarter of 2024. When comparing with the previous quarter, we also saw a reduction in prices by 12% in U.S. dollars or the equivalent of minus 15% in euros. The PIX price index ending September was at EUR 1,000 per ton and currently stands at $1,080 per ton.

In Slide #7, we see dissolving pulp prices down by 15% in the third quarter of 2025 versus last year's third quarter. Despite a historically stable and lower volatile trend versus BHKP, dissolving pulp prices have been affected by the U.S. tariffs announcements with material consequences to the global textile value chain. Nonetheless, prices have stabilized during the third quarter of 2025, and we have started to see a pickup in demand from end clients.

In Slide #8, we show an evolution of volumes broadly in line to slightly negative in the first 9 months of 2025, given the challenging demand environment, especially in Europe.

Moving on to Slide #9. Volumes sold per region are focused in Europe with an increasing trend from the Middle East, namely Turkey and Asia. On end users, volumes sold continue to be led by tissue with textile, P&W increasing its weight.

I will now pass to Miguel Silva, Altri's CFO, to comment on the main financial highlights of the quarter. Thank you.

Thank you, Jose. In Slide #10, lower pulp prices and the weaker U.S. dollar has put pressure on revenues and profitability throughout 2025. Total revenues for the quarter were EUR 165 million, down 20% year-on-year, and EBITDA was around EUR 12 million, down 79%. When comparing to the second quarter of '25, although revenues have decreased by a small amount, this was achieved with 9% higher volumes, which were more than offset by lower prices and the weaker U.S. dollar, leading to lower margin in the quarter.

Going to Slide 11. On an accumulated basis, revenues and EBITDA have registered a decrease in the 9 months as the pulp market environment was less favorable than last year. Going to Slide #11, we can see that EBITDA margin continues under pressure, standing at 7.1% for the quarter and 12.9% for the first 9 months. We expect margins to recover in a more normalized environment.

In Slide 13, EBIT and net profit have continued their downward trend in the third quarter, mainly due to the already mentioned challenging pricing environment and currency effects.

We move directly to Slide 15 and regarding costs, in spite of the challenging market environment, we have been able to reduce the cash cost in the quarter by 3% quarter-on-quarter and minus 8% year-on-year, putting the 9 months '25 number down by 2% when compared with the 9 months of 2024. We continue to focus our efforts in optimizing costs with the goal to achieve a cash cost reduction for the full year of 2025.

On the wood side, prices have been fairly stable during 2025 when compared with 2024, but with a better mix. During 2025, we are having less imports of wood from outside Iberia, the more costly source. On the energy front, the situation has normalized since the reactivation of the cogeneration turbine at Celbi on late March 2025, improving production and efficiency levels. Chemical costs are mostly trending down and are in line with last year.

On Slide 16, we can see net debt increased during the quarter, mainly due to additional CapEx and corporate tax advanced payments, which are based on last year's profitability and will be adjusted as the final numbers are calculated.

I will now pass back to Jose.

Thank you, Miguel. If you turn to Slide #17. Despite the challenging environment, Altri maintains a high single-digit return on capital employed at 8% for the first 9 months of 2025.

Turning to Slide #18. We have some ESG and sustainability highlights during the quarter. Altri earned the EcoVadis Platinum Medal for the third consecutive year, ranking in the top 1% of companies globally in our sector. The group was ranked third worldwide in our industry among the 500 most sustainable companies according to TIME and Statista. We celebrated the Sustainability Day, making an event that -- or hold an event that gathers several business partners and suppliers to talk about reducing impact and creating innovative solutions towards net zero. Altri also held a second health and safety convention, reinforcing our commitment to prevention and safe behaviors.

Turning to Slide #19. And in order of expected completion of new projects, we started by sharing the main numbers, main figures of the acetic acid and furfural production unit at Caima that should start operation in the first half of 2026. We already shared these numbers in previous quarters, but wanted to underline that the commercial development is already underway.

In Slide #20 at Biotek, the conversion from BHKP to dissolving pulp is on track for completion by the end of 2026. Some of the highlights include the price premium for DP over BHKP average 41% between 2019 and 2024. Production capacity will exceed 180,000 tons once the full conversion is complete with potential to reach longer term 200,000 tons. Main target for this project is obviously Asia with a focus on textiles and specialties.

On Slide #21, we share some numbers of the project to be developed by the recently acquired AeoniQ. Capacity will be 1,700 tons per year with revenues of EUR 20 million to EUR 25 million expected from 2028. Project targets global markets and a range of end users, including apparel, home textiles and footwear. CapEx for the industrial unit at Caima is EUR 60 million net of subsidies.

In Slide #22, we repeat some highlights on the Gama project, and we're happy to discuss an update of the situation in the Q&A session.

Finally, on Slide #23, we share some of our conclusions and perspectives. In the pulp market, global demand recovery was disrupted early in 2025 by U.S. tariffs and economic uncertainty, but demand is now seems to be recovering led by Asia and China. We see early signs of price improvement and remain moderately optimistic for the coming quarters. Operationally, we continue to focus on cost optimization with another favorable evolution in variable costs during Q3. We expect a second consecutive year of cash cost reduction.

On strategic diversification, Biotek migration to dissolving pulp is on track. Caima's acetic acid and furfural project will enable new high-value products and AeoniQ project is advancing sustainable textile fiber development.

As a conclusion, 2025 being a challenging year for the sector given the economic doubts caused by tariffs announcement and the evolution of the U.S. dollars, we expect to see a normalization of the situation in the coming quarters with the 2026 less volatile with a more balanced supply and demand, making it possible to have progressively higher returns.

Thank you for your attention. We look forward to your questions.

[Operator Instructions] Our first question comes from Bruno Bessa from CaixaBank BPI.

Yes. My first question will be on the -- related with the pulp industry balance. So we have been reading from several industry sources that apparently, the industry needs permanent capacity shutdowns or conversions in order for prices to recover more materially. My question here is, how do you see this being played? So do you expect more conversions of capacity like the one you are doing at Biotek and the one already announced by Bracell? Or do you think that there will be effectively capacity shutdowns? And if we see capacity shutdowns, where do you think those shutdowns are most likely to happen? So this will be the first question, a bit of an overall view on the industry momentum.

The second question on the cash cost evolution. So you have a very aggressive reduction of cash cost throughout the year and particularly in Q3, you made a very strong delivery on this front. If you could give a bit more color on the drivers behind this evolution? And what should we expect going forward in terms of net of cash cost for next year? And where is further room for improvements in the short term? So this will be the second question. And the third question, well, as you mentioned, an update on the Gama project.

Thank you, Bruno. Okay. So let's start with the first question regarding the pulp industry balance. I think from what -- everything that we've seen at least the supply-demand balance has clearly been somewhat long on the supply side. I think most of what has come to market recently is now fully operational. So the question becomes if there's not going to be significant capacity additions, at least, I think, implications, particularly for the European market, although this relates to global supply-demand balance, but in the foreseeable future, I think we're talking primarily if there's any capacity additions will likely be in Asia, although there is some questions around the viability of some of the projects that have been announced.

As you're probably aware, particularly in China, integrated capacity and the multiple projects that have been announced, a lot of those are dependent on domestic wood, which has been under upside pressure. I think just over the summer, we've seen roughly a 30% increase in domestic fiber prices. And effectively, the marginal cost of a lot of these, specifically also the new operators, even with domestic supply of fiber, it will be somewhere in the range of where prices are now.

So clearly, the recent price development is justified truly from significant pressure in terms of the financials of those units. But what we see actually looking forward is likely going to be some continued potential upside risk in terms of implications that may have on prices. But if I look at current cash cost curves globally for the industry, there's still a number of units which ultimately could be under significant pressure. I'm sure there's going to be a review of a lot of those and the outcomes will be some sort of slowdown in terms of output, potential some conversions, although it's not clear into what type or what integration that could take or eventual straight shutdowns.

And I think North America still has some, although not significant, but some capacity and high cost capacity. Latin America, despite what everything everyone says, there are several units and some of the major players or at least the major player, which ultimately are still quite inefficient and something will ultimately need to happen there.

We've seen the move by Bracell specifically to dedicate a full line to DP, primarily for internal captive users given that they're expanding their finished fiber capacity. So most of the -- or essentially the volume that the -- additional volume we supply will likely go into their new units but this represents 600,000 tons. On the European side, the conversion we're undergoing with Biotek, where Biotek hasn't been, if you think of paper pulp 250,000 ton units that will be -- it's already underway with significant swing campaigns that's over 2026, in particular, will be swinging completely by the end of the year into dissolving. So that's another significant reduction.

So I think the combination of all of this is clearly going to tighten the market through next year. And we believe that there will be a reflection in terms of, as I said, some upside risk concerning the actual price level. And in fact, the analysts, when they look at -- when they make a forecast for pricing levels for next year, I think you see in the future curve that clearly that will be on the upside.

Regarding the question on cash cost outlook, we continue as we have been on a trend towards optimizing our cash costs. I think if you look at it in the context of this year, we -- I think we said earlier this year that our target is going to be in the low single digits. I think actually, we're probably going to be a bit closer, especially looking at the Q4 towards middle digits. But for the year, we remain pretty much confident of achieving the indication we've given.

And the main drivers here is clearly a more optimized wood sourcing portfolio. So we've seen some reductions in our fiber costs, there's also lower chemical costs and more efficiency from operations. And a last but still significant point is we have very stable fixed costs that, again, we continue to optimize. So I think all those -- all 3 have combined to ensure that we were delivering lower cash costs and that's continuing.

Regarding your last question on Gama, we're currently under environmental permitting. So the next step or the step currently underway is on the integrated environmental license, which is responsibility of the regional -- the autonomic administration. So we continue to follow that closely. In the meantime, we have been exploring also some of the financial opportunities. We were happy to register that through one of the applications we've done through the European Innovation Fund and having surpassed all the thresholds for funding, unfortunately, did not receive an allocation because of the limited funds available for all the projects.

It's a highly competitive process. It's a highly demanding assessment process by an external panel of experts of the union, very experienced experts that review a number of projects. And in the end, they decided also to assign an [indiscernible] the project specifically validates its merits and clarifies that the project is fully in line with the strategic industrial priorities of the European Union, which should, in principle, also support access or give it -- in terms of access to other financial support and incentive instruments. So that's basically where that is. I think the next step is clearly this one. In the meantime, we also have been looking at options regarding the electrical grid connectivity. And over the next few months, hopefully, we'll have some further news on that front. Thank you, Bruno.

The next question comes from Luis Colaco from JB Capital.

Most of my questions have been answered. But probably a more generic one regarding the London Pulp Week. If you could provide us some feedback on the event and if you left the event feeling more positive or less positive versus when you arrived?

Thank you. I think overall, I mean, the expectations, I have to say, were not extremely high for the events, given where the industry has been this year. The word that I would use coming out of London Pulp Week was most probably a fairly muted conference. And when I say muted is historically in the past, you obviously do all of the discussions with customers, you go through volumes, you start having some pretty serious discussions around commercial terms for the contracts for next year.

And I think on the volume front, we're actually, I would say, rather pleased to see not only a confirmation of the key contracts we have, but ultimately also some additional volume requests, which we felt was quite positive. But in terms of the commercial, very few commercial discussions actually took place to the level where they have been in the past.

And part of that, I think it's both on the customer side as well on the supply side. I think there was some caution approaching those discussions given the current momentum. So it certainly requires a bit more interaction, and that will happen over the coming weeks. The other 2 things that I think were clear, as I mentioned earlier, the view that there is the supply-demand balance is skewed towards the longer supply, and that obviously that was part of the reason why some of those discussions have and will likely correct somewhat. But the other clear indication is, I think everyone was pretty clear that the industry has reached the bottom over the summer. And we're looking to see some positive development over the coming months and certainly over the coming years that was general perception from us.

[Operator Instructions] Our next question comes from António Seladas from A|S Independent Research.

I have 3. First one is regarding dissolving pulp. I noticed that you sold less pulp -- less dissolving pulp, sorry, year-to-date than last year. So if you can explain the reason. Second one is related with capital spending for 2026, if you can provide some figures. And last one is regarding -- is related with cash flow that has been very weak, actually negative for the last 2 quarters, at least, so a net debt-to-EBITDA at levels not seen for a while. And taking consideration that the pulp prices even that they improve, no one, I think, is expecting a strong [ healthy ] pulp price. So it seems that your free cash flow will remain weak. So should we expect -- there's any level of net debt-to-EBITDA, sorry, that we will not like to surpass?

António, may I ask you to clarify the first question on DP?

Sure. Dissolving pulp, you sold less dissolving pulp this year than last year, I think. So if you can explain the reason for it.

Well, in terms of dissolving pulp, just to be clear in terms of the overall volumes, there have been -- if I think of it for the 9 months, so we have a number of trials ongoing for Biotek. So most of the volumes that you see there in essence is the volumes from China. But overall, I would say this year for the first half of the year, I think we've made that comment because of all of the tariff implications, demand was soft, in particular on textile, and that was the primary reason.

But in terms of Biotek, we now have well over 10 qualification projects underway, some with existing customers, some with new customers. We're also qualifying beyond textile into the pharma market. So I wouldn't overread in terms of those numbers given the weakness of -- or the softness of demand in the first half, but also the fact that Biotek currently, the campaigns that have been done are primarily focused towards qualification.

Regarding capital expense for next year, we're clearly aiming at somewhat of a reduced level of capital investment, primarily focused on completing both the conversion of Biotek and also the acetic acid and furfural, which will be complete by end of first quarter, early second quarter. So the focus is on those projects. There's still ongoing maintenance CapEx and environmentally upgrade-related CapEx, but the intensity for next year will be somewhat lower compared to what we have for the next -- for this year.

Regarding the cash flow, this year, obviously, with the current environment and in particular, when it comes to the overall margins for the business that has generated less cash, I mean it's where we expected. But given the trend in terms of pulp prices and what we see going into next year, we do expect an improvement in terms of the net debt-to-EBITDA ratio. And maybe I'll ask Miguel if he wants to comment further.

Yes. Just on top of what Jose said, we will be, of course, focusing on the strategic investments that we are doing and that we have to finalize next year, namely the acetic acid that will be producing from 2026 onwards and also the conversion of Biotek to dissolving pulp, which we think will be finalized at the end of next year. But there will be also some one-off events that will benefit 2026.

One is the subsidies related to those investments, which the major part will be received during 2026. So we will have an important part of subsidies that we expect to receive next year regarding the subsidies. And also this effect of the corporate tax that we have been doing advanced payments this year based on 2024 profitability. But as we can see that 2025 profitability is not the same, we will be receiving some extra amounts paid this year. So I think this will also contribute for a better cash flow next year.

Our next question comes from Manuel Lorente Ortega from Santander.

My first question is regarding trends on the dissolving pulp industry. I believe that you mentioned, and correct me if I'm wrong, but you used the word caution to reframe the feedback from the London Pulp Week as a whole for the industry. However, on dissolving, we have seen higher negative pressures on the recent quarter, at least pricing-wise. So what we should expect for next year in terms of prices for the dissolving industry?

Thank you, Manuel. I'll say in terms of the key trends on dissolving pulp, the fundamentals remain pretty solid. This year, as I mentioned, the first half of the year, you've seen some softness, a lot of it related to destocking within the value chain because of the tariffs. There was a significant uncertainty associated with those. I think that's reversed now in the second half. In fact, we see utilization of capacity in the industry for end-use fiber production at higher levels than in the first half.

There we haven't yet fully seen a restocking process taking place. We expect sometime into next year that some of that will happen. But overall, the fundamental trends in terms of dissolving are still there, either on the specialty side, on the fiber to fiber substitution, in particular, hardwood replacing more of the softwood in terms of fossil-based raw material fibers undergoing some replacement by renewable sourced fibers. So I think a lot of those will continue to play out.

In terms of prices, if you look at the current level, you're still in the range of 40-plus percent higher than the paper pulp, which has been pretty much in line with industry trends. Currently, prices have been well above or around $300 gap versus the paper prices. And ultimately, we'll continue to see that happening into next year, perhaps even with less volume.

And conceptually speaking, is there any reason why this premium versus standard pulp prices should narrow or widening? I was thinking, for example, in the context of higher fiber to fiber substitution trends, it is fair to say that, that premium should narrow to some extent?

I wouldn't necessarily see a narrowing in premium. I mean, at the end of the day, you have 2 very different pulps. If you think of dissolving pulp, it has to undergone significant processes, purification processes, you're extracting a lot of different materials chemical versus some sugars, minerals, et cetera. That's an extended process.

And ultimately, purely on a specific consumption, we used to end up with the same ton of dissolving pulp, we have to use more wood. So the basis for a delta in terms of pricing is always going to be there. And I think historically, there's been some use of a hybrid type of pulp that requires significant purification processes, which has a significant cost. So I don't see at least any significant reason why that gap should narrow.

And in some specific segments, it may even increase hardwood dissolving pulp is purely from a pricing perspective, it's more attractive than softwood because ultimately, softwood has significantly higher cash cost associated with it. So I would say, over time, in some of the more specialty applications and when I mean specialty, specifically going beyond the which is textile fibers, I think you'll see even the possibility for some expanding that [indiscernible].

Okay. And just my final question regarding cash cost trends, if I have understand it correctly, you pointed that a significant part of the improvement in cash cost comes from an efficiency -- a higher efficiency process on the wood cost. I'm a little bit puzzled with that in the sense that my perception was that dissolving would imply a higher consumption of wood and [ ergo ], higher associated costs regarding wood. However, you keep on improving significantly the cash cost throughout this quarter. So that assumption is correct. Yes, dissolving comes with a higher wood consumption. So -- and if that is correct, then we have seen a meaningful improvement then in terms of wood cost on the other side of the business. Is that the correct way to see this? Or is any missing point that I'm not taking into consideration?

No, I think it's correct. So if you start from the assumption that all of the inputs remain exactly at the same price level or in this case, at the same cost level, particularly considering variable costs, the more migration or the higher the production of dissolving pulp, you would expect, in fact, with a combined cash cost to see an increase in that cash cost. So the fact that you're seeing a decrease is a reflection of what I said in terms of some improvement on the input prices of the variable cost components, but also in terms of a higher stability on fixed costs.

Just to note that when we start thinking in terms of variable costs for DP. Caima, which, in fact, is, by all measures, a small plant in the global context of DP or at least a small to -- but it's on the lower end in terms of capacity. But Caima is probably at the top end in terms of the lower cash cost. And a lot of that deals with efficient use of the inputs, the particulate species of eucalyptus hardwood that we use in Portugal allow us to have a very, very strong efficiency use in terms of specific consumption, significantly below what's the standard for the industry.

So as I said, it all remains the same. The more -- or the higher the weight of dissolving pulp, you should see higher cash cost. The fact that you're seeing a reduction in that cash cost actually speaks to the significant work that I think our teams have been doing at managing the cost inputs and on the operational side of reaching very, very high efficiency rate.

[Operator Instructions] Our next question comes from Bruno Bessa from CaixaBank BPI.

Just precisely a follow-up on the cash cost front. If you could give us an indication of your expectations about cash cost evolution for next year? And also related with this topic, when do you see your cash cost stabilizing under a scenario in which pulp prices recover $600, $650 per ton. Where do you see your cash cost structurally stabilizing in the future?

And lastly, just a bit of a more technical one. I saw in Q3 a relevant reduction in terms of net financial costs. So the -- what is left between EBIT and earnings before tax. So the number I get is EUR 2 million negative compared to EUR 11 million in Q2 and EUR 8 million in Q1. Just trying to understand here what was the driver behind this, if there was here any kind of hedging -- currency hedging effect or something that could explain this decline? Just trying to extrapolate for why it's less from the year.

Thank you, Bruno, for the follow-up. Perhaps Miguel will be able to give you a bit of an outlook and specific on the net financial cost, and I'll follow up with...

No, it's a fair observation. In fact, we've been increasing our financial costs. First of all, because we've been paying less interest. So also the rates have been decreasing and that has an impact on the amount of interest that we have to pay. There is -- also this year have been very challenging in terms of FX gains and losses. And on the previous quarters, we have been significant losses in FX due to the depreciation of the currency, the ongoing and continuous depreciation of the U.S. dollar, and we had a better quarter on that side also that helped the improvement on the financial results. And as Bruno mentioned, we also have some hedging. And the more the U.S. dollar depreciates, the more we gain with that hedging. And in fact, in this last quarter, we had also an improvement in terms of the result of that hedges. And all this combined, there is a significant improvement in terms of financial costs for the quarter.

Thank you, Miguel. Just one additional note in terms of -- because you asked around cash cost future trends and I would say for us, I mean, we see a continuation of the current detailed focus in terms of our cash cost structure. Obviously, as I mentioned before, the fact that you're doing more dissolving pulp will likely to see some pressure on the average cash cost of pulp. On the DP, we're talking about our cash cost across units, starting with Caima to be at the market or close to being market leader.

And in terms of paper pulp, I mean, the fact that we have continued to reduce, it means that we've seen some increased reductions on paper pulp. So looking into 2026, our expectation is that we'll probably continue to see some additional efficiency, but you probably -- the trend that you've seen this year, I think for next year, probably on an average annual price will be somewhat at a similar level or again, a very low single-digit reduction.

There are no further questions from the conference call. We'll now start with the written questions. Our first question comes from Carlos de Jesus from CaixaBI. Could you update us on your view on growth alternatives to the Gama project? If the project eventually does not go ahead, do you see the company targeting more dissolving capacity apart from the conversion investments already being made in your own infrastructure? And would this be through acquisitions? Or are you open to downstream opportunities in sustainable textiles?

So if I think through in terms of implications, our Gama project is a unique project on its own. It has a very specific structure. And clearly, our objective with Gama was to continue to increase our presence in DP and also taking a step further in terms of sustainable textile opportunities, downstream opportunities. Both of those, we continue to pursue projects within our existing infrastructure, as you've seen. And ultimately, our direction of travel in the long term is going to continue to focus on increasing our presence in DP and in sustainable textile.

So whether that will come from capacity optimization, I mean we still have some optimization to do even within Biotek after conversion. We obviously continue to be open in terms of possible opportunities on M&A in the future. But our focus right now is on the key projects that we have underway, and we'll see in terms of the Gama project, ultimately when we have -- when we receive the green light for that project, how it looks like in terms of the overall structure that we may end up adopting.

As you know, that project will be a project that we would undertake with partners, which is a little bit of a different structure compared to all of the other projects we're doing directly within Altri perimeter. So just an additional note in terms of the downstream opportunity in sustainable fibers.

The acquisition of a majority stake in AeoniQ not only gives us control over a market leading next-generation technology, sustainable textile, it allows us to do integration within our own facilities. But ultimately, I think it positions us in a very broad at scale opportunity that we take -- we have the intention to fully take advantage of. But that's more of a longer-term result.

Our next question comes from Luis de Toledo from ODDO. Regarding wood availability in China. Besides the construction sector relaxation, do you see other structural reasons, which could explain the reduction in cash cost in China and Indonesia?

No, I think the -- so the situation with stronger availability of domestic fiber in China has been playing out over the last few years. There's been a significant reduction in construction activity. There's still quite a bit of remaining. But I think the current balance in terms of end users for that domestic fiber, it's probably not going to change dramatically in the future. And if anything, what you're seeing is, to use fiber into pulp application, it's the lowest return for our stockholders. And the market has in and of itself been restructuring significantly, but we don't see an increase in terms of available area. So the question is whether there's going to be a change in that ratio.

But given how depressed the construction industry has been, I don't think you'll see much of a change. What you may end up seeing is upside pressure in terms of the cost of that fiber. And we've seen that play out through the summer. I don't expect that to change significantly. So when it comes to overall cash cost of operators in China, Indonesia is a bit different, and I'll get to that in a minute. But in terms of China, I see actually some downside risk in terms of increased marginal cost for those operators because of the upward pressure.

If you look actually at the statistics, even while we've had an increase in usage of domestic sourced wood, imports remain relatively at the same level. So it was not a substitution of imported fiber, particularly from Vietnam, which is the majority of -- the major supplier of fiber into China. But the new integrated capacity is taking advantage of that greater volatility of domestic wood. So I personally, at least from our understanding and from a number of investigations we've done recently, we don't see that changing very significantly, if anything would be to the downside on the marginal -- on the -- in this case, the increase in the marginal cost.

Regarding Indonesia, it's a very different play out. None of that wood also is certified. There's been some plantations of lower grade fiber that usually has implications also from an operational capability. Clearly, there is some additional space for new plantations, but if it comes at the expense of deforestation that has huge implications of where that pulp could end up and with some increased regulation and increased requirements and traceability, I think that's not going to be necessarily an easy proposition. But as I said, operationally, it's much less efficient.

So even if you were to have an increase in Indonesia availability, it will come at a high expense both from an environmental footprint as well as from long-term financial sustainability. And you can see that just considering some of the delays basically in the [ big key ] expansion project, which has consistently suffered delays because of that equation not being necessarily...

So final question comes from a written form, which is regarding the dividend outlook versus the EUR 0.30 that were distributed last year given Altri's lower results and challenging market environment? I'll pass to Mr. Jose Pina.

So just a quick comment on that. Obviously, we have been very focused on shareholder remuneration. As you all know, we do not have a dividend policy, but that has not precluded us from being having a continuous dividend outlay. This year, we had somewhat of an increase because of the results -- in spite of the good results of last year. We'll assess that in the early part of next year. But clearly, we will be continued on shareholder remuneration as a key element of our value proposition and I don't see any significant reasons why that would necessarily change. And we've done that over different parts of the cycle. So it would be not -- it wouldn't be necessarily different that's a decision we always make in the first quarter of the following year.

This concludes today's event. We thank you all for your presence. Ladies and gentlemen, you may now disconnect your lines.