Borregaard Aktie

Good afternoon, and welcome to Borregaard's pre-close call. My name is Pal Espen Ramberg, Director of Investor Relations at Borregaard. I'm joined today by CFO, Per Bjarne Lyngstad, and we are broadcasting live from the biorefinery in Norway.

Here is the agenda for today's call. First, outlook from the latest quarterly report; secondly, currency and commodity input based on public data, and last, a Q&A session. Participants are welcome to submit questions via the chat during the call.

I will now hand over to Per Bjarne, who will present the key points from the outlook communicated in the Q1 report.

Thank you, Pal Espen, and good afternoon, everyone. I will start with reiterating the key points from the outlook for both the full year and the second quarter of 2026. And when relevant, refer to questions and comments on the outlook given in the Q&A session at the webcast we held on the -- for the first quarter on the 29th of April.

I will start with BioSolutions, where we reiterated our expected full year's sales volume of about 340,000 tonnes. The second quarter sales volume is expected to be around 90,000 tonnes, in line with what we had in the second quarter in 2025, but with a less favorable product mix this year.

We got several questions regarding BioSolutions at the webcast. The first one was about how confident we are that the weaknesses in agri and batteries are temporary. We read the current picture as a reaction to the geopolitical situation, intensified by the war in Iran, which has also created a broader uncertainty. We also see that this drives a destocking in the value chain. We have no indication from the market and customers that there is a structural change in demand. Customers are keeping up their forecast for the year. As such, we see this as a situation where customers are taking a cautious wait-and-see approach. That means that they currently are buying less using what they have in inventory. Yes.

The second question was about the mix in BioSolutions in the second quarter. Should we expect similar trends for mix and ASP in BioSolutions as in the first quarter? The second quarter last year was a very strong quarter for the Specialties. In the first quarter, we just saw the first consequences of the outbreak of the Iranian war. The consequence from the war is definitely going to impact the second quarter. And in particular, we see that the Asian market is impacted more than others. We also see the agri market in general and India in particular being impacted. We expect the product mix in the second quarter to be similar to what we saw in the first quarter.

The next question was related to agri sales. Is there a risk that higher fertilizer prices affect Borregaard's agri sales negatively? We think it's still difficult to see exactly what's going to be the outcome of the current situation. We know fertilizer prices have increased and farmers are being hit by this. Our customers that are selling plant protection and plant nutrition products are looking at the impact on their own input cost factors. On the other hand, we have products that actually makes the farmers able to use less fertilizer. Therefore, we think we will see mixed impacts. The net impact is difficult to estimate, but we think there will also be opportunities coming out of this, especially in the longer term. For the time being, we see a temporary situation where there's a wait-and-see attitude and where customers are deciding how to approach the situation.

The next question was also related to agri. Petrochem-based products have surged in price, so have fertilizers. This should favor both price and volumes of Borregaard's agri-based portfolio. When can we expect to see effect of this? Again, timing is difficult. Short term, we think sales is somewhat reduced due to the uncertainty and customers are using the situation as an opportunity to reduce inventories. Longer term, this may offer opportunities both for additional business and also to do price adjustments upwards and definitely where we are replacing synthetic products.

Then, turning to the outlook for BioMaterials, where we reiterated our expected full year sales volume to be in the range of 155,000 to 160,000 tonnes, significantly above the 146,000 tonnes in 2025. We also reiterated that the sales volume of highly specialized grades is expected to be slightly above the 2025 level. The average sales price in sales currency is expected to be 3% to 4% lower in the first half of 2026 compared with the second half of 2025, partly due to mix. The second quarter sales volume in Biomaterials is expected to be in the range of 40,000 to 42,000 tonnes.

There were 2 questions regarding BioMaterials outlook for volume and prices at the webcast. The first was related to RYAM and BioMaterials. RYAM guides for 18% higher ASP for Speciality Cellulose for 85% of its volume in 2026 and even more price increases for the remaining 15%. How should we think about the ASP in the second half when you have flushed out the lower grades from the production hiccups last year? As communicated earlier, we have locked in the major part of our cellulose business for 2026. We have some flexibility on a limited part of the volume. We think the main impact here will be when we go into 2027. RYAM's price increases may also create some opportunities in the market, where we will take those as we see them coming.

The second question was related to construction volume in BioMaterials. Borregaard highlighted more sales to the Construction segment in the first quarter. Is this structural or reallocation of the lower grades sold in the quarter? In the fourth quarter report for 2025, we talked about a more intense competition in the construction part of the business in cellulose ethers and that we had done some selective price adjustments. The increased sales into construction are reflecting also that our selective price adjustments have been working out well and that we are gaining both business and market share in that part of the business.

The final outcome of the U.S. antidumping case may also affect several specialty cellulose markets. In May, the U.S. Department of Commerce announced the preliminary dumping rates for Borregaard and the Brazilian company, Bracell. For Borregaard, the preliminary rate was set at 6.54%, while Bracell got a rate of 7.20%. The final determination of the dumping rates is expected on or around the 7th of October 2026. If the final dumping rates end up at or close to the preliminary determination, our take is that U.S. customers will resume buying speciality cellulose from Borregaard to secure competition in the U.S. market. This level of dumping rates might even open up new opportunities in the U.S. market for Borregaard.

Then, moving on to the outlook for Fine Chemicals, where sales prices for bioethanol continue to be expected largely in line with the levels we saw in 2025. The sales volume for fine chemical intermediates is expected to increase compared with 2025. For fine chemical intermediates, we just want to remind you that delivery patterns and product mix may vary from quarter-to-quarter.

Then, to the outlook and the development in costs. Wood cost in the first half of 2026 is expected to be around 15% lower than in the first half of 2025. The Middle East conflict is expected to impact our energy, logistics and chemical costs negatively. The net cost impact from raw materials, energy and logistics is estimated to be negative by about NOK 40 million to NOK 60 million compared with the second quarter of 2025. In addition, general cost increases or inflation will affect our cost level.

As to energy cost, remember that energy consumption in Borregaard is normally higher during the winter and lower in the summer season. About 80% of Borregaard's energy consumption is on long-term contracts or hedged. For the rest, we are exposed to spot prices. But we have flexibility to switch between natural gas and electricity. For natural gas, we have a 1-month delay compared with the market price. Electricity prices in Norway so far in the second quarter have on average been significantly above last year's prices, about 75% above. Less snow and less water in reservoirs are the main reasons for the high spot prices for electricity.

Delivered price for natural gas have also been significantly higher, even higher -- more than 90% higher than last year, taking the 1-month delay into consideration. Natural gas or LNG prices in Europe are, of course, impacted by the war in the Middle East. In total, spot prices on energy will have a negative impact in the second quarter, more or less in line with our estimate from the first quarter presentation.

There were several questions regarding costs. The first question was about spruce pulp prices, which are now down 26% from the peak. How are negotiations going for the second quarter? As of now, the negotiations for the second half of 2026 have started, but will not be finalized before the end of June. The expectation is still that prices should come down somewhat.

The second question was related to the Middle East and raw material costs. Are current spot prices for gas and sulfur fair? Or do Borregaard still benefit from lags of early sourcing in the cost guidance figure? Borregaard has a 1-month lag on natural gas. But for the rest, we are more or less at the present level unless we have contracted volume for several months. Sulfur prices are on the rise and on a steep rise. Caustic soda is relatively stable, but we have seen some increase in the second quarter.

We were also asked to split the NOK 40 million to NOK 60 million higher cost year-on-year in the second quarter on the different items. Since it's a net amount, you have to take into consideration the 15% reduction in wood price in the first half, which is about NOK 30 million positive per quarter. That means that the other elements are NOK 70 million to NOK 90 million negative, of which energy is the largest element. A part of the cost increase is also related to increased cost for sulfur, and to a lesser degree, caustic. In addition, we see increased logistical costs.

The next question was also related to costs. We were asked to elaborate on the targeted cost measures to address cost development. When might these measures start to take effect? Borregaard has initiated a cost reduction project. We will come back with more details, but we will, for sure, implement cost discipline measures, be more restrictive on recruitments and the use of external consultants, among other things. We will also look more at the structure and initiatives we are driving, and in general, take a more restrictive approach to get costs down.

The next question was related to price hikes and surcharges. Are price increases and surcharges also something you will consider? And our answer was that, yes, surcharges and price increases are something we consider. Borregaard implemented surcharges in 2022, but the situation is a bit different now compared with then since the overall market environment has changed.

At the end of the outlook presentation, we reminded you about the uncertainty in the global economy, particularly related to wars, conflicts and tariffs, which may impact Borregaard's markets, cost base and currencies. Borregaard implemented targeted measures to address the cost development. While the conflict in the Middle East is affecting certain parts of our markets and customers, we believe the situation will represent a longer-term opportunity for Borregaard's bio-based products.

Borregaard's diversified portfolio and broad customer base has a proven track record of providing resilience in times like this. We believe that this will prove its strength also in a period like we are seeing now. Having completed the outlook and questions from the first quarter presentation, we will point to one more element, which will have an impact on 2026 results. Borregaard has a hedging strategy that delays the impact of changes in currency rates. Using currency rates as of the 28th of April, the net currency impact for the full year of 2026 was estimated to be about zero compared to 2025. The corresponding impact for the second quarter of 2026 was estimated to be positive by about NOK 10 million compared with the second quarter of 2025.

So far in the second quarter, the Norwegian kroner has strengthened by about 4% compared with the first quarter of 2026 using Borregaard's currency basket. Compared with the second quarter last year, the Norwegian kroner has strengthened 7% to 8%. If the present currency rates continue the rest of the month, the net currency impact in the second quarter compared with the second quarter last year will more or less be in line with the plus NOK 10 million we estimated at the first quarter webcast on 29th of April. With today's rates, where the Norwegian kroner has weakened quite a lot over the last week, the net currency impact for the full year of 2026 is expected to be NOK 10 million to NOK 15 million higher than the zero impact we estimated in late April.

I will now hand over to Pal Espen, who will lead the Q&A session with questions asked in the chat function of this webcast.

Thank you, Per Bjarne. We will now open the Q&A session. Please submit your questions via the chat function. We will wait some seconds to make sure we have received all questions as there is a delay on the web.

The first one is from Magnus Rasmussen at SEB. How much is the extra NOK 100 million convertible Alginor comes from Borregaard, roughly half?

Yes, roughly half or, to be precise, about NOK 56 million out of the NOK 100 million, which relates to our share compared to the share of the 3 largest shareholders.

That seems to conclude today's Q&A session. Thank you for joining the pre-close call, and thank you for your interest in Borregaard. As a reminder, this call marks the start of the silenct period.

Here we have another one, finally here, from Magnus again. How much of the extra -- how much has to date total been invested in Alginor?

We have invested around NOK 600 million so far, partly in equity and partly in convertible loans.

We will try one more time. That seems to conclude today's Q&A session. Thank you for joining the pre-close call, and thank you for your interest in Borregaard. As a reminder, this call marks the start of our silent period. We look forward to the next update. Thank you, and goodbye.

Thank you.

Good morning, and welcome to Borregaard's First Quarter 2026 Presentation. My name is Tom Foss-Jacobsen. I'm the CEO of the company, and I'll be joined today by our CFO, Per Bjarne Lyngstad. Together, we will take you through this agenda. I'll start with the key highlights for the quarter and then give an update on the market situation across our business segments. I'll then summarize the outlook before handing over to Per Bjarne, who will walk you through the financial performance in more detail.

Before we begin, just a quick reminder for those of you watching the webcast live that you're welcome to submit your questions at any time during the presentation, and we will address them at the end of the presentation.

Let's begin with the highlights for the first quarter. EBITDA came in at NOK 428 million compared with NOK 511 million in the same quarter last year. In BioSolutions, we saw lower sales volumes within Specialties compared with a very strong quarter last year. In BioMaterials, we delivered higher volumes, but this was offset by lower sales prices and a weaker product mix. Fine Chemicals delivered a strong result, supporting the overall performance in the quarter.

On the cost side, the higher energy costs and general cost inflation were partly offset by lower wood costs, and we had an insignificant net currency effect in the quarter.

Okay. Then let's turn to BioSolutions. Within Specialties, lower sales volume was partly compensated by higher sales prices. Deliveries to agriculture and batteries were lower compared again with a very strong Q1 last year. At this stage, we have no indication of a structural change in demand, but we see this rather as a temporary delay in the value chain driven by geopolitical factors, broader uncertainty and customer destocking in this period. The average price in sales currency was marginally higher with the price in Norwegian kroner being impacted by a weaker U.S. dollar and euro. Overall, sales volume was 4% lower than Q1 last year.

Moving on to BioMaterials, in the quarter, sales volume was 10% higher compared with Q1 last year. This was driven by higher deliveries of Specialty Cellulose, partly due to higher sales to the Construction segment, but also increased sales of our highly specialized products to regulated markets and bioplastics. At the same time, the average price in sales currency was 4% below Q1 last year, reflecting lower sales prices, where we also did some selective price adjustments and also a weaker overall product mix. As for BioSolutions, the average gross sales price in Norwegian kroner was also affected by a weaker U.S. dollar and euro.

Now to Fine Chemicals. For Fine Chemical Intermediates, we delivered a strong quarter, supported by a favorable product mix and higher deliveries. For bioethanol, we saw increased sales volume. Overall, this segment delivered significantly higher operating revenues, up 23% compared with the same quarter last year.

Then I'll conclude my part with our outlook. In BioSolutions, sales volume for 2026 is forecast to be approximately 340,000 tonnes. For Q2, we expect sales volume around 90,000 tonnes. We expect a less favorable product mix in Q2 compared with the second quarter last year, primarily driven by the current temporary delay in the value chain mentioned.

In BioMaterials, sales volume for 2026 is forecast to be in the range of 155,000 tonnes to 160,000 tonnes and the sales volume of highly specialized grades is expected to be slightly higher than in 2025. The average price in sales currency here is expected to be 3% to 4% lower in the first half of 2026 compared with the second half of 2025, partly due to mix. For Q2, sales volume is expected to be in the range of 40,000 tonnes to 42,000 tonnes. And as previously communicated, the preliminary decision in the U.S. dumping allegations is expected end of May.

In Fine Chemicals, the bioethanol sales prices are expected to be largely in line with 2025 and the sales volume for the fine chemical intermediates is expected to increase versus 2025. For Fine Chemical Intermediates, the delivery patterns and product mix may vary from quarter-to-quarter.

Then on the cost side, the cost development is expected as this. The wood costs in first half of 2026 are expected to be reduced by around 15% compared with the first quarter -- first half of 2025. At the same time, we see that the Middle East conflict is expected to impact our energy, logistics and chemical costs negatively. And the net cost impact from raw materials, energy and logistics is estimated to increase by NOK 40 million to NOK 60 million versus the second quarter last year, in addition then to the general cost increases.

The uncertainty related to wars, conflicts and tariffs is impacting both our markets, our cost base and also our currencies. Consequently, we are now implementing targeted measures to address the cost development. While the current supply disruptions and cost pressure on oil-based products are affecting certain parts of our markets and customers, we also believe that this may support a stronger case for bio-based alternatives Borregaard is offering and then represent a longer-term opportunity for products like ours.

Finally, Borregaard's highly diversified portfolio and broad customer base has a proven track record of providing resilience in times like this in a volatile environment and through periods of uncertainty. We also think that this will prove its strength in a period like we're seeing now.

And with that, I'll hand the word over to our CFO, Per Bjarne Lyngstad, who will take you through the financial performance in more detail. Thank you.

Thank you, Tom Erik, and good morning, everyone. In the first quarter, Borregaard's operating revenues were 2% lower than in the same quarter last year. EBITDA, as Tom Erik said, was NOK 428 million compared with NOK 511 million last year. The result in Fine Chemicals increased, while BioSolutions and BioMaterials had lower results. The lower result was mainly due to lower sales volume of Specialties in BioSolutions and higher energy and other operating costs, except for the wood cost.

Net currency effects were insignificant in the quarter. And the EBITDA margin ended at 21.3% compared with 25.1% in the same quarter in 2025. Earnings per share was NOK 1.82 compared with NOK 2.52 last year. The lower sales volume of Specialties was also the main reason for a 9% decrease in operating revenues in BioSolutions. EBITDA in this area was NOK 260 million compared with NOK 349 million last year. The lower sales volume was partly compensated by higher sales prices for Specialties. The result was also negatively impacted by higher energy costs.

In addition, the net currency effects were in this area, negative in the quarter. Due to the lower result, the Q1 EBITDA margin was 24.4% compared with 29.6% in the very strong first quarter last year.

BioMaterials operating revenues in the first quarter were 6% higher than in the same quarter last year, mainly as a result of higher deliveries of Specialty Cellulose. EBITDA was NOK 102 million compared with NOK 113 million in the same quarter last year. Again, higher deliveries of Specialty Cellulose, they were offset by lower sales prices and a weaker product mix.

Lower wood costs were more than offset by an increase in other costs, mainly related to energy. Other costs have also increased due to higher prices for some chemicals, particularly sulfur, the cost for defending antidumping case in the U.S. in addition to the general cost inflation. Net currency effects were positive in BioMaterials this quarter. And the EBITDA margin ended at 14% compared with 16.4% last year.

Higher deliveries of both Fine Chemical Intermediates and bioethanol were the main reasons for a 23% increase in operating revenues for Fine Chemicals in the first quarter. EBITDA reached NOK 66 million, NOK 17 million above the first quarter last year. The improved result was due to higher deliveries and a favorable product mix within Fine Chemical Intermediates and increased sales volume of advanced bioethanol. In addition, net currency effects were positive for Fine Chemicals in the quarter. The EBITDA margin ended at 30%, close to 3 percentage points above the same quarter last year.

As I said earlier, the net currency impact on EBITDA in the quarter was insignificant compared with the same quarter last year. A 10% stronger Norwegian kroner in the first quarter this year using Borregaard's currency basket was offset by a significant change in hedging effects. In the first quarter, we had a [ NOK 60 million ] gain on hedging compared with a loss of NOK 95 million last year. Using currency rates as of yesterday, the net currency impact on EBITDA for the full year of 2026 is now estimated to be about 0. The corresponding impact for the second quarter is estimated to be positive by about NOK 10 million compared with the second quarter last year.

Cash flow from operating activities was NOK 77 million in the first quarter. The low cash flow was due to a reduced cash effect from EBITDA and increase in net working capital and high tax payments in the first quarter. Net working capital increased mainly due to high deliveries in most areas towards the end of the quarter, resulting in an increase in accounts receivable.

Investments were NOK 161 million in the quarter. The largest expenditure were related to the upgrade of the electricity transmission transformation capacity and the debottlenecking project at the Sarpsborg site, in addition to a capital increase in Alginor in the form of a convertible loan.

Net interest-bearing debt increased by NOK 35 million in the quarter. At the end of the first quarter, Borregaard is still well capitalized with an equity ratio of 62% and a leverage ratio, which is net interest-bearing debt over EBITDA of 1.18.

And that concludes today's presentation. Tom Erik and I will now be ready to answer any questions, both from the audience present here in Oslo and from those who follow the webcast. Our Director, Investor Relations, Pal Espen Ramberg, will moderate webcast questions.

We have received some questions. The first one comes from Magnus Rasmussen at SEB regarding mix in BioSolutions. How confident are you that the weakness in agri and batteries is temporary?

As we said, we read the current picture as a reaction to the geopolitical situation intensified by the war now in Iran, which has also created a more broad uncertainty. And we see also that this drives a destocking in the value chain. We have no indication from the market, from the customers that this is a structural change in demand. Customers are keeping up their forecasts for the year.

And as such, we see this as a situation where customers are taking a cautious wait-and-see approach, where is the oil price going, where is the price on oil-related products, which they are heavily dependent on going. And that means currently, they're buying less, using what they have and take this approach. Yes, I think that's the view here.

Thank you. The next one is from Kristoffer Haugland at Arctic related to [indiscernible] and Biomaterials. [ RM ] guides 18% higher ASP for Specialty Cellulose for 85% of its volume in 2026 and more for the remaining 15%. How should we think about the ASP in the second half when you have flushed out the lower grades from the production hiccups last year?

As communicated earlier here, we have locked in, I would say, the major part of our cellulose business for the year 2026. We have some flexibility on a limited part of the volume. But I think the main impact here will be when we go into 2027. I would also say that this situation may create some opportunities in the market, where we will take those as we see the opportunities. As such, on pricing, major part of the volume is locked in.

Thank you. Another one from Magnus Rasmussen at SEB related to Middle East and the raw material costs. The cost increase driven by the Middle East, is it fair current spot prices for gas sulfur? Or do you still benefit from the lags early sourcing in the cost guidance figure?

No, I would say that gas prices now for -- we have 1 month delay on natural gas. So what we will see now in April is the average March price on LNG. So there is a certain delay there. But overall, we are more or less at the present level. What we've seen also in the first quarter is very high electricity prices in Norway. and they will probably not continue at the same level because it's getting warmer. But everything points to a higher electricity price than last year, of course, depending on the weather.

So we are -- on that part that we haven't really hedged or have long-term contracts on, we are more or less exposed to spot prices on energy. Sulfur prices are on the rise. Caustic soda is relatively stable, but we expect at least some increase now in the second quarter. So all those things are involved.

On the wood side, the prices for the first half are set, but the expectation there is that wood prices should go down in the second half of the year. How much is too early to tell. So it's a mixed picture. But -- and of course, there's a lot of uncertainty in the energy price. But remember that about 80% of our energy consumption are on long-term contracts or hedged. So -- and we have flexibility between natural gas and electricity on the spot side.

Thank you. Another one from Magnus Rasmussen at SEB. How do you view the preliminary result of the countervailing duty against Brazil, which was released recently?

I would say these are technical calculations and may not reflect the final outcome. So we will wait and see until we have the preliminary saying here coming at the end of May. And countervailing duty is only a part of it. It also talks about this antidumping type on pricing. So I think it's too early to say. It's still open, I would say.

Thank you. The next one is from Kristoffer Haugland at Arctic. Spruce pulp prices are now down 26% from the peak. How are negotiations going for Q2? Mix in BioSolutions second quarter, should we expect similar trends and ASP as in Q1? And can you split the NOK 40 million to NOK 60 million higher cost year-on-year in Q2 on the different items?

Yes, I can answer through the first and then the last and we will take the middle one. On the wood price, I partly answered that. The negotiations for the second half on the wood price has not started yet. So it's a bit early. But we see that prices has come further down in Sweden. I'm sure many of you follow the statistics on the wood price coming from the agriculture department in Norway. So everything points to a decrease, but I don't dare to say how much we will see in the second half. Probably less than we saw in the -- we had a 50% reduction in the first half. It will probably be less than that, but it's early to tell.

And the last question was

Related to the split of the SEK 40 million to SEK 60 million.

Yes, the split because that's a net amount. With the wood prices, the 50% reduction in wood price, that's about roughly NOK 30 million positive per quarter. So that means that the other elements, which is mainly energy is NOK 70 million to NOK 90 million. So that's the main elements there. A part of it is also increased sulfur price, but it's not a very high part of the total. It's mainly related to what we foresee now on energy prices, the gas prices we observe in the market, which is, of course, uncertain and then what will happen with caustic also.

So then I can answer the market question related to BioSolutions product mix. We have said that we were keeping our total volume for the outlook for the year, 340,000 tonnes, and we are also keeping the volume, as we said in the previous quarter for Q2, we stick to the 90,000 tonnes. But we're also saying that we expect a less favorable mix in Q2 versus the same quarter last year. Again, a reminder that also Q2 last year was a very strong year for quarter for the Specialties.

When we say that the impact here that we believe is temporary, I mean, we have just seen the first consequences of the outbreak of the Iran war that was end of February. We have had 1 month in Q1. This is definitely going to impact Q2 as well. And in particular, we see that the Asian market is impacted more than others. We also see this on, for example, the agri market. And we also have customers in India, which is definitely one country here being impacted here.

So we will see a less favorable product mix within the same applications, as we mentioned in Q1. But we are currently believing that the second half is more back to normal. But who knows exactly the outcome of what's going on now? I mean it is a broad uncertainty. And -- but still, we believe it's temporary. How long remains to be seen.

Another one from Kristoffer Haugland at Arctic related to construction volume in Biomaterials. You highlighted more sales to Construction segment. Is this structural or reallocation of the lower grades sold in the quarter?

If you look back at our Q1 -- excuse me, the 2025 report we did, we said that for 2026, we had more intense competition in the construction part of the business in cellulose heaters and that we have done some selective price adjustments. And I would say our increased sales into construction is reflecting also that our selective price adjustments have been working out well and that we are gaining both business and market share in that part of the business.

Thank you. The next one is from Niclas Gehin at DNB related to costs. Could you elaborate on what these targeted cost measures to address cost development are? Are price increases and surcharges also something you will consider? And when might these measures start to take effect?

Yes. For the time being, we have initiated a project that will, as I say, have targeted measures to address costs. It's too early for us to give exact details, but we will -- we will definitely look at being more restrictive on recruitments. We will be more looking at the structure and initiatives we were driving and in general, take a more restrictive approach to get costs down. But we will get back with more details on that as this is still fairly new and in progress.

The second part you asked for was -- one more time.

Surcharges.

Yes. We are discussing also this within our businesses. We're looking at the contracts, and we're looking at the impacts, and we are -- we have seen that a competitor has been out there with quite significant surcharge, and we are in discussions on this, and will over the coming months, and we will decide on how to approach it.

Thank you. The next one is from Fabian Jorgensen at Pareto related to price hikes and surcharges. How do you consider your ability to offset cost increases with hikes in price or surcharges? Your track record from 2022 is strong, but with a slower construction market, the market balance is significantly softer.

Yes. I think I already answered to the surcharge part and that we are in consideration of doing this. On price hikes, we -- I would say the situation was a bit different in '22 than versus today. with the overall market environment being a bit different. But we are also looking at, again, contracts we have with our customers and the flexibility we have to do some moves on price and with price adjustments. So this will be reported as we move on how we implement this.

Thank you. Another one from Fabian Jorgensen at Pareto related to agri sales. Is there a risk that higher fertilizer prices affect your agri sales negatively?

I think it's a bit challenged to see exactly what's going to be the outcome of the current situation. We know fertilizer prices are going sky high. Farmers will be hit by this heavily. One thing is availability. The other thing is that they will be really hit by high costs. And we think that our customers that are selling plant protection and plant products are currently looking at the impacts on their own cost input factors.

What we see is also that we have products that actually makes the farmers able to use less fertilizer. So I think we will see mixed impacts. Currently, the net impact is difficult to estimate exactly. But there will also be opportunities coming out of this, especially as most mentioned in the longer term. But currently, we see a temporary situation where there's a wait and see and where they are deciding how to approach the situation.

The next one is from Kristoffer Haugland at Arctic, also related to agri. Petchem-based products have surged in price, so has fertilizers. This should favor both pricing and volumes of Borregaard's agri-based portfolio. When can we expect to see effect of this?

Again, the timing is difficult to be exact about. I think short term, we see exactly the impact we're seeing now that sales is somewhat reduced due to the uncertainty and that they're using this then situation also as an opportunity to reduce their inventories. We know they are using what they have in inventories. That's the consequence.

But I think, again, longer term, this may offer opportunities both for additional business and also to do price adjustments upwards, definitely, where we are replacing synthetic products. And as I mentioned, I think in the longer term, this is positive for bio-based solutions.

The next one is from Niclas Gehin at DNB. Could you say something about how the different activity level and sales volume were in March after the war, [ bondings ] relative to January and February? And how is the start of Q2?

I would say that we can say we were a bit surprised about March. March was definitely a slower month than we expected. That was when we read it.

For BioSolutions, I think we had to say.

Yes. For BioSolutions in Specialties, that was when we saw the impact starting and which is normally a very strong month for applications like agri. So yes. Yes, he also asked for the beginning of the quarter, but that's again -- we'll get back to that

Next time.

Yes. But we have said a less favorable product mix so that there is some impact also into the quarter in general. Yes.

Thank you. There are no more questions on the web. Let's see if we have something from the audience.

No. I think that was good and a good number of questions. Yes. Thank you very much.

Thank you.

Good afternoon, and welcome to Borregaard's pre-close call. My name is Pal Espen Ramberg, Director of Investor Relations at Borregaard. I'm joined today by CFO, Per Bjarne Lyngstad, and we are broadcasting live from the biorefinery in Norway.

Here is the agenda for today's call. First, the outlook for the latest quarterly report; secondly, currency and commodity inputs based on public data; and last, a Q&A session. Participants are welcome to submit questions via the chat during the call.

I will now hand over to Per Bjarne, who will present the key points from the outlook communicated in the Q4 report.

Thank you, Pal Espen, and good afternoon, everyone.

I will start with reiterating the key points from the outlook for both the full year and the first quarter of 2026. And when relevant, prefer to comment on the outlook given in the Q&A sessions at the webcast for the fourth quarter on the 4th of February this year.

I will start with the BioSolutions, where we expect the sales volume to be approximately 340,000 tonnes for the full year with continued growth in the agriculture segment. The first quarter sales volume is expected to be around 80,000 tonnes, more or less in line with 81,000 tonnes we had in the first quarter of 2025.

We got one question regarding BioSolutions at the webcast, which was related to our reference to strong agriculture markets and improvements in biovanillin. Except from the first quarter, EBITDA in 2025 was not much stronger than 2024 for BioSolutions. And the question was, what can you say about the developments in other markets than agriculture and biovanillin? In our answer, we reminded the audience that we have seen increased costs throughout the year affecting EBITDA. We have cost increases at our U.S. plants and also other costs exceeded the general inflation. On the market side, agriculture is clearly one of the main driving segments for the growth, but we have seen weaknesses in certain markets within construction and also oilfield chemicals have been weaker throughout 2025.

Then turning to the outlook for BioMaterials, where the sales volume in 2026 is forecast to be in the range of 155,000 to 160,000 tonnes, significantly above the 146,000 tonnes in 2025. Sales volume of highly specialized grades is expected to be slightly above the 2025 level. The average sales price in sales currency is expected to be 3% to 4% lower in the first half of 2026 compared with the second half of 2025, and this is partly due to the mix of customers and products.

The European cellulose ether producers are expected to continue facing competition from Chinese cellulose ether producers within the construction segments. These customers normally buy speciality cellulose from Borregaard and other wood pulp speciality producers. The first quarter sales volume in BioMaterials is expected to be in the range of 37,000 to 39,000 tonnes, in line with the first quarter of 2025.

At the webcast in February, there were 2 questions regarding BioMaterials outlook for volume and prices. The first one was about the speciality cellulose competition from China. Has the competition from China on speciality cellulose intensified in recent months? Or is it on par with 2025? Our response was that there has always been some imports from China, either with cotton linters as a raw material for cellulose ethers or cellulose ethers in the low-end segments, typically to construction. Chinese cellulose ethers are of GMO origin and cannot be used for other applications than construction. That means that they can't really go into food and pharma.

Over the past 5 years, we have seen exports gradually increasing from China. During the last year and with the tariffs in the U.S. and also with low construction activity in China, we see what we see in many other industries that the overcapacity in China is being exported. When it can't be exported to the U.S. without tariffs, even more is coming into Europe. So we clearly see an increasing trend of imports of the cellulose ether products from China into Europe. Also remember that Borregaard's strategy has been to move more of our cellulose production going into ethers to food and pharma applications. And we have succeeded quite well with that over the last years. That's been our strategy, and we've seen this coming, and we changed our strategy.

The second question was related to the price reduction in speciality cellulose and mix effects. With regards to BioMaterials and the 3% to 4% price decline in the first half compared with the second half last year, we were asked to shed some more light on the mix effect. And if the decline only partly is due to mix, what are the other reasons for the drop? As we said in the outlook, the reduction in the average price is partly explained by mix, which means mix of products and customers. We sold about 146,000 tonnes in 2025. We expect to sell 10,000 to 15,000 tonnes more in 2026, which means an additional volume with a mix with different pricing. Also, within the construction segment to cellulose ethers, we have done some selective price adjustments. Then we have the 4,000 to 5,000 tonnes we need to sell to the market during the year from the production disruption we had in the third quarter last year. Together, these elements explained why the average sales price will be negatively impacted in the range of 3% to 4%.

Borregaard's main competitor in speciality cellulose, RYAM, presented their outlook before 2026 in the beginning of March. They claim that 85% of their speciality cellulose business was arranged at an average price increase of 18% over 2025 with expected volume loss of about 20% compared with 2025. The other 15% is still in discussion according to RYAM and may not be decided until the back half of this year. If successful in those discussions, the remaining 15% will only come at an average price increase, significantly higher than the 18% level, again, according to RYAM.

On a question on ether grade cellulose, RYAM admitted that the market is challenged and particularly in Europe, confirming what Borregaard said. And this is also according to RYAM due to the ethers coming out of China. However, RYAM claimed that they have achieved near to 20% price increase across ether grades in Europe. Obviously, RYAM is prioritizing value over volume in 2026. If they are successful with the antidumping case against Bracell and Borregaard and the countervailing case against Bracell, they will dominate the U.S. speciality cellulose market. However, for the markets outside the U.S., the risk for RYAM is that they will lose significant volumes if they achieve their price ambitions.

The final outcome of the U.S. antidumping case may also affect several speciality cellulose markets. According to RYAM, a preliminary decision on the countervailing duty case against Bracell is expected this month. If this case end up in favor of RYAM, Bracell might be excluded from the U.S. market where they are the largest supplier.

At Borregaard's fourth quarter webcast, we got the questions, if you could give a ballpark figure on how much we have spent on U.S. legal costs in the fourth quarter? And how much we expected the total sum to be. We answered that we had passed NOK 10 million in cost for these investigations, most of it in the fourth quarter. In the process, we have answered a lot of questionnaires. So hopefully, that part of the process is coming to an end soon. It's difficult to estimate how much more we will spend, but we think the total costs for the antidumping case on Borregaard's hand will be somewhere between 10 -- between NOK 15 billion and NOK 20 million.

Then moving on to the outlook for Fine Chemicals, where sales prices for bioethanol are expected to be largely in line with the levels we saw in 2025. The sales volume for Fine Chemical intermediates is expected to increase compared with 2025. Then to the outlook and the development in other important cost components where the wood cost in the first half of '26 is expected to be around 15% lower than in the first half of 2025.

As to the energy costs, remember that energy consumption is normally higher during the winter and lower in the summer season. About 15% of Borregaard's energy consumption is dependent on energy spot prices for electricity and LNG. For LNG, we have a 1-month delay compared with the market price, which is the Dutch TTF. Electricity prices in Norway so far in the first quarter have on average been significantly above last year's prices. Part of the explanation for the higher electricity price is a colder winter in Norway this year compared with last year, which may also impact energy consumption. On the other hand, LNG prices have been quite a bit lower than last year so far, taking the 1-month delay into consideration. In total, spot prices on energy will not have much of an impact on Borregaard's energy costs in the first quarter compared with the first quarter last year. But higher energy consumption due to the colder weather will have a negative impact on costs, however, not very substantial.

At the end of the outlook presentation, we remind you about the uncertainty in the global economy, particularly related to tariffs, war and conflicts, which may impact Borregaard's markets and costs. The ongoing war in the Middle East has already started to impact shipments and cost of deliveries of goods. Higher LNG and oil prices are starting to impact the prices on energy and also on chemicals. So far, the total impact for Borregaard is limited, partly due to the 1-month delay in LNG prices. However, if the war continues for a longer period with limited supply of oil and gas, it will hurt the global economy.

Having completed the outlook and questions from the fourth quarter presentation, we will point to one more element, which will have an impact on 2026 results. Borregaard has a currency hedging strategy that delays the impact of changes in currency rates. Using currency rates as of the 3rd of February, which were when we -- or the day before we presented the fourth quarter result, the net currency impact for the full year of 2026 was estimated to be positive by approximately NOK 55 million compared with 2025. The corresponding impact for the first quarter of 2026 was estimated to be negative by about NOK 5 million compared with the first quarter of 2025.

So far in the first quarter, the Norwegian kroner has strengthened by 3% to 4% compared with the fourth quarter of 2025 using Borregaard's currency basket. Compared with the first quarter last year, the Norwegian kroner has strengthened 7% to 8%, mainly due to a weaker U.S. dollar. If the present currency rates continue the rest of the month, the net currency impact in the first quarter compared with the first quarter last year will more or less be in line with minus NOK 5 million we estimated at the Q4 webcast on the 3rd of February.

With today's rates for the rest of the year, the net currency impact for 2026 is also expected to be slightly lower than the NOK 55 million, about NOK 15 million, maybe even NOK 20 million lower with what we estimated in early February compared to that.

I will now hand over to Pal Espen, who will lead the Q&A session with questions asked in the chat function of this webcast.

Thank you, Per Bjarne. We will now open the Q&A session. Please submit your questions via the chat function.

We already had someone here. The first one from Elliott Jones in Danske Bank. Given the Middle East escalation, how will this affect the import of potential from Chinese producers and the cost of the rival petrochemical products?

For us, I think it's too early to give any quantification of that. The challenges in transportation is mainly centralized around the Middle East and the Hormuz Strait and transportation between Europe and Asia is going more or less normally. But of course, the cost of transportation is -- has started to increase and will further increase. Then the big question is really how much oil will be supplied to the market. And that remains to be seen. So I don't think we are there yet that we can quantify this a lot. But the main worry is really about the world economy running into a recession. We think the Chinese product will not be much impacted at least in the short run because what we are competing with is not oil-based products, it's based on cotton linter cellulose on the cellulose side.

The next one is from Magnus Rasmussen in SEB. Can you benefit from RYAM's volume loss in '26? Or are you sold out?

I don't think we have a lot of flexibility in our volume because we were quite early out securing volume and customers has been quite willing to commit to volumes. You can see that on our outlook for the volume, which was much, much higher than last year. So I don't think we have a lot of flexibility there, but some we will try to benefit from that. But again, we have to see also how this works out for RYAM outside the U.S. I think they will struggle if they really achieve the prices they say they have achieved outside the U.S., they will struggle on the volume side. But of course, the customers don't have that many alternatives in the short run.

Thank you, Per Bjarne. How does the conflict now in the Middle East affect you? Any extra cost to gas or sulfur already in Q1? And what about Q2? This was from Magnus Rasmussen again.

No, I mentioned what we see so far in Q1. And there, it's mainly related for shipments in March where we see some increases in. Also, some increases there will be. Again, it's difficult still to quantify it. If the war goes on, I think we will see an increase in the Q2, too. We see LNG prices varying a lot. Today, they were about EUR 70 per megawatt hour. They have been most of the time after the war started below EUR 50, but you have these preparations and of course, oil prices fluctuating, but it's more a question of lack of supply of natural gas and oil. So how that will play out, it's difficult to tell. But of course, Borregaard on the energy side, at least is -- has quite a high share of electricity secured.

Thank you. Another one from Elliott Jones regarding BioMaterials prices. You note BioMaterials prices down 3% to 4% in first half versus second half last year. As you see it now, do you expect any changes to this level for the second half?

This year, a rather large share of our volume is on annual contracts. We have a certain percentage that that's up for negotiations in the middle of the year. Again, it's a bit early to see whether we can achieve any price increases, but we don't have a lot of flexibility there, at least from where we see it now.

Another one from Magnus Rasmussen. Are you looking into potential surcharges if costs increase as it did in 2022?

Of course, that is always an option. We haven't started to discuss that yet because we need to see more of how long this war will last and how severe the impact on oil and gas prices and supply will be. But of course, that's something Borregaard don't like to do. We don't want to like to mix that into the negotiations with customers. But if we see high or large cost increases, that will be something that we will have to look at.

And another one from Elliott Jones, more into Middle East. Can you please provide some color as to the potential effect to both pricing and demand for your products as a result of the Middle East escalation?

Again, it's more a question on the world economy and how that will be impacted because many of our products, we have follow more or less GDP growth. And if that comes down, we will see an effect on our products also. But historically, Borregaard has been quite resilient if we go into a kind of recession because we have so many products, we are into so many applications. A higher oil price might have an impact on pricing for some of our specialties because we are competing with fossil-based products. But the fossil-based products like our products are quite advanced. So the oil price is not a big factor on the cost side for competing products either. But there will be some impact if this is going to last for a longer period.

Thank you. We are experience a delay and we will continue shortly. That seems to conclude today's Q&A session. Thank you for joining the pre-close call, and thank you for your interest in Borregaard. As a reminder, this call marks the start of our silent period. The annual report will be released the 26th of March, together with the notice of the Annual General Meeting, which will be held the 10th of April. We look forward to the next update. Thank you, and goodbye.

Thank you.

Good morning, everyone, and welcome to the fourth quarter 2025 presentation for Borregaard. My name is Tom Erik Foss-Jacobsen. I'm the CEO of the company. And I'll be joined today by our CFO, Per Bjarne Lyngstad. Together we will take you through this agenda.

I will start with the key highlights for the quarter and give an update on the market situation across our business segments. I'll then summarize the outlook for 2026 and finally present our dividend proposal for 2025 before handing over to Per Bjarne, and he will then take you through the financial performance in more detail.

And before we begin, I'd also like to remind those of you that watch the webcast live that you are welcome to submit questions any time during the presentation, and we will address them at the end. Let's begin with the highlights for the quarter. EBITDA came in at NOK 405 million, slightly up from NOK 398 million in the same quarter 2024.

BioSolutions delivered a solid quarter, supported by high biovanillin deliveries and continued growth in sales to agriculture, a trend we have now seen for the 2 last years. BioMaterials delivered good results, driven by higher specialty cellulose prices and increased sales volume. In Fine Chemicals, our Fine Chemical Intermediates delivered a strong performance. Bioethanol sales prices remained at the lower levels that we've been seeing throughout the year.

Wood and energy costs were down in the quarter and partly offset the increases we saw in other costs. We also recorded impairments of, in total, NOK 245 million of the bio-based start-ups we are invested in. This is due to delays and increased capital needs. In the coming period, we will focus on our current positions in bio-based start-ups. We had a strong cash flow in the fourth quarter.

Looking at the full year, we delivered another all-time high EBITDA, reaching NOK 1,878 million, just etching past last year's record of NOK 1,874 million. In BioSolutions, sales to agriculture were strong throughout the year, and we also saw higher sales of biovanillin products. In BioMaterials, sales prices increased and the product mix improved, supported by higher sales of high-purity cellulose.

Fine Chemical Intermediates also delivered a strong result. And again, sales prices for advanced bioethanol declined significantly during the year, mainly due to a significant increase in market supply driven by favorable incentive schemes in Europe. Wood costs increased during the year and the increase in other costs exceeded general inflation. Net currency effects were positive. The cash flow was strong in 2025.

Overall, we are pleased to present another all-time high EBITDA, driven by a strong momentum across our business segments. And this is despite the sharp decline we have seen in the advanced bioethanol sales prices and higher costs.

Now let's turn to the fourth quarter in BioSolutions. This was a solid quarter with the average price in sales currency 6% above Q4 2024, driven by an improved product mix. We saw high deliveries of biovanillin and continued growth in sales to agriculture. The anti-dumping duties on vanillin from China continued to have a positive, though limited impact on our vanillin business.

The average gross sales prices in NOK are impacted by a weaker U.S. dollar compared to Q4 2024. Sales volume was 3% lower than the same quarter last year, which was at the high end of our Q4 guidance and on level with what we see as a more normal fourth quarter volume.

For the full year, BioSolutions delivered solid performance. Average price in sales currency increased 2% and sales volume increased 1% compared to 2024. Strong sales to agriculture continued across both specialty and industrial applications. We saw rising demand for multi-active ingredient solutions in crop protection and the reauthorization of Borregaard's lignin for use in EU, animal feed, helped us gain additional business.

We also recorded higher demand for biovanillin and a positive but overall limited impact from the anti-dumping duties on the vanillin from China in both the U.S. and EU. The average gross sales prices in Norwegian kroner are impacted again by a weaker U.S. dollar compared to the previous year.

Moving on to BioMaterials and the fourth quarter. This was a strong quarter with the average price in sales currency up 6%, primarily driven by price increases. The average gross sales prices in Norwegian kroner were impacted by a weaker dollar compared to Q4 previous year. Sales volume increased 5% compared to the same quarter 2024.

As we informed last quarter, specialty cellulose exports from Norway and Brazil are subject to an ongoing U.S. anti-dumping investigation. A preliminary decision is delayed and now expected at the end of May 2026, with a final decision towards the end of 2026. And here, any duties may apply retroactively for up to 90 days.

Looking at the full year for BioMaterials, the segment delivered a solid result with average sales prices up to -- up 9% and sales volume down 9% compared to 2024. The main drivers here were increased sales prices and an improved product mix, including increased sales of high-purity cellulose to regulated applications, food, pharma, personal care and also to bio-based plastics.

The highly specialized share increased with 4% from 83% to 87%. The average gross sales prices in Norwegian kroner were also here impacted by the weaker U.S. dollar compared to previous year. Sales to the Construction segment declined as the European cellulose ether producers, typically our customers, were negatively impacted by increased imports from Chinese cellulose ether producers, and they are based on cotton linters as their raw material. The disruption we had in specialty cellulose production in Q3 2025 also affected the sales volume in the quarter.

Now moving to Fine Chemicals Q4 and full year. We continue to see a significant decline in sales prices for the advanced bioethanol throughout the year. And this was due to the significant increase in market supply driven by the favorable incentive schemes in Europe. Prices have now returned to levels that we considered normal before these incentives were introduced. For Fine Chemical Intermediates, we saw higher sales prices and a strong product mix, both in the quarter and for the full year.

Then I would like to share our outlook for 2026. In BioSolutions, we expect the sales volume to be approximately 340,000 tonnes with continued growth in the agriculture segment. First quarter sales volumes are expected to be around 80,000 tonnes. In BioMaterials, the full year sales volume is forecast to be in the range of 155,000 to 160,000 tonnes. Sales volume of highly specialized grades is expected to be slightly above the 2025 level.

The average sales prices in sales currency is expected to be 3% to 4% lower in the first half of 2026 compared to the second half of 2025, and this is partly due to mix on customers and products. The European cellulose ether producers are expected to continue facing competition from the Chinese cellulose ether producers within the Construction segment.

First quarter sales volume in BioMaterials is expected to be in the range of 37,000 to 39,000 tonnes. In Fine Chemicals, sales prices for bioethanol are expected to be largely in line with the levels we have seen in 2025. Sales volume for Fine Chemical intermediates is expected to increase compared to 2025.

On the cost side, the wood costs in the first half of 2026 are expected to be around 15% lower than in the first half of 2025. We continue to monitor global uncertainty related to tariffs, war and geopolitical tensions, which may affect our markets and costs. The final outcome of the U.S. anti-dumping case may also affect several specialty cellulose markets.

Before I conclude, I would like to present the dividend proposal for 2025. The Board of Directors has decided to adjust the dividend policy to a target range of 40% to 60% of the net profit compared to the previous range of 30% to 50%. We will continue to pay regular and progressive dividends, reflecting expected long-term earnings and cash flows.

For 2025, the Board proposes a dividend of NOK 4.75 per share, an increase of NOK 0.5 or plus 12% compared to last year. This represents 55% of our net earnings before impairments, corresponding to a dividend yield of 2.4% based on the year-end share price. The total payment amounts to NOK 474 million.

With that, I will hand over to our CFO, Per Bjarne Lyngstad, who will take you through the financial performance and key figures for the quarter and for the full year. Thank you.

Thank you, Tom Erik, and good morning, everyone. Borregaard's operating revenues in the fourth quarter were 5% higher compared with the fourth quarter of 2024, mainly as a result of higher sales prices and sales volume in BioMaterials. EBITDA increased to NOK 405 million, NOK 7 million above the fourth quarter of 2024. BioMaterials had an improved result, while BioSolutions and Fine Chemicals had a lower result.

Net currency effects were slightly positive by NOK 5 million compared with the fourth quarter of 2024. An 8% weaker U.S. dollar compared to the Norwegian kroner was offset by reduced hedging losses. The EBITDA margin ended at 22.1% in the fourth quarter, 0.7 percentage points below the corresponding quarter in 2024.

In the quarter, as Tom Erik has mentioned, Borregaard has recorded NOK 245 million of impairments on investments in bio-based start-ups. Excluding the impairment, earnings per share ended at NOK 1.64 compared with NOK 1.30 in the fourth quarter of 2024.

As I said, Borregaard has made impairments totaling NOK 245 million on its investments in bio-based start-ups. The impairments reflect recent development in these companies and is recorded under financial items in our profit and loss statement. The major part, NOK 225 million is an impairment of the investment in Alginor, where recent information indicated project delays and additional capital needs. The impairment is based on an impairment test in accordance with IFRS.

After the impairment, the remaining book value of Alginor is NOK 250 million, about NOK 10 per share. In addition, a total impairment of NOK 20 million has been made on the investments in Kaffe Bueno and Lignovations. The Danish bioscience company, Kaffe Bueno faces delays in its project, and Borregaard has decided not to exercise its warrants to subscribe for additional shares, but we will participate in a minor convertible loan to the company.

The Austrian technology start-up, Lignovations has also had delays and consequently faced lack of funding. On the 27th of January 2026, Borregaard received a notice of decision from the Financial Supervisory Authority of Norway following their regulatory financial reporting review of Borregaard's financial statements for 2024.

Borregaard has been required to perform a new calculation of the value of Alginor at the end of 2024. If a correction is deemed necessary, figures for 2024 will be restated in Borregaard's annual report for 2025. Borregaard is currently in the process of preparing documentation for the valuation at year-end 2024 as requested by the Financial Supervisory Authority.

Then turning to the full year for Borregaard. Operating revenues increased by 1% to NOK 7.7 billion. EBITDA had a marginal NOK 4 million improvement and ended at NOK 1.878 billion. Both BioSolutions and BioMaterials had an improved result, whereas Fine Chemicals had lower results compared with 2024. Strong sales to agriculture and higher sales of biovanillin in BioSolutions, increased sales prices and improved product mix for BioMaterials and positive net currency effects contributed strongly to the all-time high EBITDA in 2025.

The result was negatively impacted by a significant reduction in bioethanol sales prices and cost increases exceeding the general inflation. The additional cost increases were mainly related to increased manning in Norway, mainly and also in the U.S. in addition to higher costs for certain chemicals and insurance and reduced government grants, among other things. EBITDA margin ended at 24.3%, close to the margin in 2024. Return on capital employed ended at 15.7%, below the 2024 level, but above our targeted level of minimum 15% pretax.

Excluding the impairment, earnings per share were NOK 8.67 compared with NOK 8.24 in 2024. Operating revenues in BioSolutions were in line with the fourth quarter of 2024 and 4% above for the full year. EBITDA was NOK 245 million in the fourth quarter compared with NOK 251 million in the fourth quarter of 2024.

High deliveries of biovanillin and sustained growth in sales to agriculture were more than offset by increased costs at the U.S. manufacturing sites in addition to general cost inflation. The net currency effect were insignificant in the quarter.

For the full year, EBITDA reached an all-time high of NOK 1.209 billion, NOK 105 million higher than in 2024. Strong sales to agriculture also for the full year were the main driver of the improved result. This was partly offset by increased costs, the same explanations as for the quarter with the U.S. manufacturing sites and the general cost inflation. The net currency impact was positive compared with 2024. The fourth quarter EBITDA margin was 24.3%, 0.7 percentage points below the margin in the fourth quarter of 2024. For the full year, the EBITDA margin was strong and improved to 27.5%, 1.5 percentage points higher than in 2024.

In BioMaterials, operating revenues in the fourth quarter were 11% above the fourth quarter of 2024 as a result of higher sales prices and sales volume. For the full year, higher sales prices were the main contributor to a 3% increase in operating revenues. EBITDA reached NOK 127 million in the fourth quarter, NOK 25 million above the same quarter in 2024. The improved result was due to higher sales prices and increased sales volume, together with the lower wood and energy costs in the quarter. This was partly offset by an increase in other costs, including certain chemicals, costs of the anti-dumping case in the U.S. and the general inflation. Net currency effects were positive in the quarter.

For the full year, EBITDA ended at NOK 495 million, an improvement of NOK 61 million compared with 2024. For the full year, higher sales prices and improved product mix were the main reasons for the improved result, partly offset by lower sales volume and higher wood costs and the net currency effects were positive for the full year. The EBITDA margin ended at 18.7% in the fourth quarter, 2 percentage points above the same quarter in 2024. For the full year, the EBITDA margin was 18.4%, close to 2 percentage points also there above 2024.

Improved product mix and sales prices for Fine Chemical Intermediates, partly offset by lower bioethanol sales prices were the main reasons for a 13% increase in operating revenues for Fine Chemicals in the fourth quarter. For the full year, operating revenues decreased by 16% due to lower sales prices for Borregaard's advanced bioethanol. EBITDA was NOK 33 million in the fourth quarter compared with NOK 45 million in the fourth quarter of 2024.

Lower sales prices for bioethanol were partly offset by a strong result for Fine Chemical Intermediates. Fine Chemical Intermediates had a favorable product mix and increased sales prices in the quarter. Net currency effects were insignificant for Fine Chemicals in the quarter. For the full year, EBITDA ended at NOK 174 million, NOK 162 million lower than in the fourth quarter of 2024. The reduced result for the full year was due to lower sales prices for our advanced bioethanol.

Fine Chemical Intermediates improved compared with 2024 due to improved product mix and increased sales prices. The net currency impact was positive for Fine Chemicals for the full year. The EBITDA margin was 21% in the fourth quarter, about 11 percentage points below the same quarter of 2024. The EBITDA margin for the full year was 26% compared with 42% in 2024.

The net currency impact on EBITDA was positive by NOK 5 million compared with the corresponding quarter in 2024. Driven by a weaker dollar, the Norwegian kroner strengthened by 6% -- about 6% in the quarter using Borregaard's currency basket. Hedging losses were NOK 24 million in the fourth quarter compared with a loss of NOK 93 million in the fourth quarter of 2024. For the full year, the net currency impact on EBITDA was positive by about NOK 115 million. Hedging losses amounted to NOK 174 million compared with a loss of NOK 365 million in 2024.

Using currency rates as of yesterday, the net currency impact for the full year 2026 is estimated to be positive by about NOK 55 million compared with 2025. The corresponding impact for the first quarter this year is estimated to be negative by about NOK 5 million compared with the first quarter of 2025.

Borregaard had a strong cash flow from operating activities of NOK 419 million in the fourth quarter with a positive impact from a reduced net working capital. Also for the full year, the cash flow from operating activities was strong and close to NOK 1.4 billion an improvement of close to NOK 300 million compared with 2024. A more favorable development in net working capital was the main reason for the strong cash flow from operating activities.

Investments were NOK 383 million in the fourth quarter. The largest expenditures in 2025 were related to environmental investments and debottlenecking at the Sarpsborg site, specialization projects within BioSolutions and participation in capital raises in Alginor. Net interest-bearing debt increased by NOK 18 million in the fourth quarter. For the full year, net interest-bearing debt was reduced by NOK 150 million to NOK 2.90 billion. At the end of 2025, Borregaard is well capitalized with an equity ratio of 61% and a leverage ratio of 1.11 compared with 1.2 at the end of 2024.

Finally, I'll go through an updated investment forecast for 2026 and 2027. Borregaard has a financial objective to keep replacement investment at depreciation level, excluding depreciation from leasing. In 2025 to 2027, targeted CO2 and COD reductions and general cost increases explain replacement investments above target level. These environmental investments will also support specialization and value growth investments.

The largest project is the debottlenecking at the Sarpsborg site, where we now expect a production output to increase gradually from the second quarter of 2027 instead of the second half of 2026. The delay is due to unforeseen challenges with buildings layout. However, the cost estimate for the project is unchanged at about NOK 800 million.

The delay in the debottlenecking project is the main reason for lower-than-expected investments in 2025 and a slight increase in the forecast for 2027. Additional investments in bio-based start-ups are not included in this forecast. There are, of course, uncertainties in these estimates related to final decision, execution time, payment schedules, among others.

And that concludes today's presentation. Tom Erik and I will now be ready to answer any questions, both from the audience present here in Oslo and from those who follow the webcast. Our Vice President, Finance, Veronica Skevik will moderate the webcast questions.

We have received some questions. The first one is related to U.S. legal costs. It comes from Mr. Niclas Gehin at DNB Carnegie. Could you give us a ballpark figure on how much you have spent on U.S. legal costs in Q4? And how much is the total sum that you expect to use?

We have now passed in total NOK 10 million in costs for these investigations, most of it in the fourth quarter. We have answered a lot of questionnaires. So hopefully, that process is coming towards the end. It's still difficult to estimate how much more, but it will be somewhere, I think, between NOK 15 million and NOK 20 million as the end cost here as our best estimate as of today.

Next question is regarding the specialty cellulose competition from China. It comes from Mr. Magnus Rasmussen from SEB. Has the competition from China or on specialty cellulose intensified in recent months? Or is it on par with 2025?

I would say that there has always been some imports from China, either cotton linters as a raw material, cotton linters pulp to blend in, but also exports of cellulose ethers in the low-end segments, typically construction because it's non-GMO origin and cannot be used for other applications.

But I think we have gradually seen over the past 5 years that exports has been gradually increasing. But now over the last year, also with tariffs in U.S. and also with low construction activity in China, we see -- what we see in many other industries that the overcapacity in China is being exported. And now it can't be exported to U.S. without tariffs, even more is coming into Europe. So I think we definitely are seeing an increasing trend of imports of the cellulose ether products from China into Europe.

But also remember that Borregaard's strategy has been to move more of our cellulose production going into ethers to food and pharma applications, and we have succeeded quite well with that over the last years also. So that's been our strategy. We've seen this coming, and we've changed our strategy.

Yes. And it proves why this strategy is very sensible. Yes.

Thank you. Next question is related to developments in markets within BioSolutions. And it also comes from Mr. Magnus Rasmussen from SEB. You continue to refer to strong agriculture markets in BioSolutions and improvements in biovanillin, yet, except from Q1 EBITDA in 2025 has not been much stronger than 2024. What can you say about the developments in other markets than agriculture and biovanillin?

Yes. I think, first, we have to bear in mind what has been said here on the cost side for Borregaard and for BioSolutions. We have seen increased -- significantly increased costs throughout the year. And specifically BioSolutions was mentioned both the wood cost, but also that we have cost in the U.S. and that they exceeded the general inflation, the other costs.

But on the market side, agriculture is clearly one of the main driving segments for the growth. We have said before, this is roughly 1,000 customers, 200 products. So there's definitely a mix also within that portfolio. We have also seen weaknesses in certain markets. I would say, construction market should be no surprise that there are weaknesses in certain markets within construction and also oil throughout the year 2025 has been weaker.

Thank you. Next question is related to the price reduction in specialty cellulose and the mix effects. It comes from Mr. Elliott Jones at Danske Bank. With regards to BioMaterials, 3% to 4% price declines in the first half versus second half last year. Can you shed some more light on the mix effect? And if you only partly due to mix, what are the other reasons for the drop?

Yes. First of all, it's important to notice that we are referring to that is partly explained by mix, which means mix of products and customers. And we sold about -- was it, 146,000 tonnes in 2025. We have in our outlook that we will sell 10,000 to 15,000 tonnes more. So that means also an additional volume with a mix with different pricing.

And also the -- within the Construction segment to sell ethers, we have done some selective price adjustments. And we also have the 4,000 to 5,000 tonnes we need to sell to the market during the year from the production disruption we had in the last quarter. And I think these things together explains why the average sales price will be impacted in the range of 3% to 4%.

Thank you. Next question, and so far, the last I have here, also comes from Mr. Elliot Jones from Danske Bank related to costs. With regards to costs, excluding wood and energy that have exceeded inflation this year, 2025, can you provide some more rationale as to why this is? And how do you expect this to develop in 2026?

Yes. I mentioned a few key factors there. Manning is one, we have increased our manning mainly in Norway, but also in the U.S. entities. So that gives an increase above inflation. We have had quite an increase in insurance premiums. That's also due to that we have chosen to improve our coverage on some of the insurance. And then we have given -- or we have gotten less grants from -- to our innovation activities in 2025, which normally is booked as a reduction in fixed costs.

So these are some of the explanation. It's a lot of different things on the cost side, but we've seen. Also we have, in addition to manning at the U.S. manufacturing sites, the upgrade of the facility in Wisconsin and also an upgrade of the competence in the organization has led to additional costs there.

Thank you. There are no more questions on the web. So I'm not sure if there are any questions from the audience.

That's concludes our presentation. Thank you very much.

Thank you.

Good [ morning ] everyone. Thank you for joining Borregaard's pre-close call. My name is Veronica Skevik Frey and I am Vice President Finance in Borregaard. I'm joined today by our CFO, Per Bjarne Lyngstad, and we are live from the biorefinery in Norway. And here is the agenda for today's call. First, we'll look at the outlook from the latest quarterly report from the Q3 report reiterated for that. Secondly, currency and commodities inputs and then last, we'll have a Q&A session. And regarding the Q&A session, feel free to start typing your questions in the chat functions. And now I will hand over to Per Bjarne, who will then reiterate the key points from the outlook given in our third quarterly report.

Thank you, Veronica, and good afternoon, everyone. I will start with reiterating the key points from the outlook for Q4 and when relevant refer to comments given in the Q&A session at the webcast for the third quarter on the 22nd of October this year. I will start with BioSolutions. In Biosolutions, we expect the sales volume in the fourth quarter to be between 70,000 and 75,000 tonnes which is below the 77,000 tonnes we had in the fourth quarter last year.

We continue to expect a positive but limited effect from the antidumping duties on vending. We've got 3 questions regarding BioSolutions at the webcast after the third quarter. The first core question was related to margin development and the decline year-on-year despite the foreign exchange tailwind. What should we expect going forward? Our response was that Borregaard offer a very broad portfolio, especially in agriculture, we have around 200 different products sold to 1,000 different customers. Within this broad portfolio, there will be big mix differences from quarter-to-quarter explaining variations in margins. In general, we think we have quite high margins in BioSolutions and they have been at well above 25% over quite a long period, then I'm talking about EBITDA margin. This year, we are hurt a little bit by a weaker dollar. However, margins in the first 9 months of 2025 have been more than 2 percentage points above the same period last year.

The second question was related to average sales price development in BioSolutions. With increasing agri sales, why is the average sales price in sales currency of that year-on-year, and the product mix stated to be in line with last year? Would higher agchem sales imply a more favorable product mix? Again, our response was to repeat that we think that, that's related to mix within agri, where we have a very broad portfolio with products going into both industrial applications and specialties. And agchem, which was mentioned in the question, it goes into -- mainly into specialties. So it will depend on which applications during the quarter takes more volume and which takes less. The last question was, what do we expect in terms of mix in Biosolutions on the agri side in the fourth quarter?

In general, we are positive to the development we're seeing in agri. Q3 was the seventh consecutive quarter that we reported growth in agri and we are very positive about the long-term picture for agri, and that our portfolio fits very well with the needs of the market. Then turning to the outlook for Biomaterials, where the sales volume in the fourth quarter was expected to be in the range of 35,000 to 38,000 tonnes with a higher share of highly specialized grades compared with the fourth quarter last year. The average sales price in the fourth quarter should remain largely in line with the third quarter. At the webcast in October, there were no questions related to biomaterials outlook for volume and prices. As to the wood costs, which mainly affects Speciality Cellulose, we expect it to be slightly lower in the fourth quarter than in the fourth quarter last year.

We got several questions regarding the wood costs. The first one was if we had a change in wood cost guidance compared with what we said after the second quarter. And our answer was not really. As to the price reduction on wood, that's the same as after the second quarter. But we had a negative mix effect between chips and roundwood in the third quarter, and we had a higher-than-normal inventory of wood and at all higher prices at the beginning of the third quarter. The fourth quarter should be better than the third quarter and also better than the fourth quarter last year. And on a follow-up question, we estimated additional wood costs in the third quarter compared to the third quarter last year to be in the range of NOK 10 million to NOK 15 million.

In the fourth quarter, our estimate was that the wood cost would be closer to NOK 10 million lower compared with the third quarter, and also compared with the fourth quarter last year. The last question was if the wood cost will continue to be a cost tailwind in 2026. Our comment was that the negotiations for 2026 was about to start and would go on until the end of the year. However, what we've seen in Sweden and also in Norway has been sawmills closing down for at least a period, putting pressure on wood prices for 2026. Also related to Speciality Cellulose, we got the question about the antidumping allegations in the U.S. And if we could provide some color on as to potential costs we expect to realize in connection with this case. We commented that U.S. lawyers and experts are quite expensive, and that we, for sure, will have a cost impact going forward in this case. It will be some millions in costs, probably more than NOK 10 million over the period the case is going on. Then moving on to the outlook for Fine Chemicals, where sales prices for bioethanol continue to be significantly lower than last year. The product mix for Fine Chemical Intermediates in the fourth quarter is expected to be weaker than in the third quarter. Then to the outlook and to the development in other important cost components where we expect energy consumption, spot energy prices and energy-related raw material prices to increase seasonally in the fourth quarter compared to the third quarter.

As to energy cost, remember that energy consumption is normally lower in the summer season and higher during the winter. About 15% of Borregaard's energy consumption is dependent on energy spot prices for electricity and LNG. For LNG, we have a 1-month delay compared with the market price. Electricity prices in Norway so far in the fourth quarter have on average been significantly above last year's prices, but LNG prices have been quite a bit lower than last year, taking the one month delay into consideration. In total, spot prices on energy will not have much of an impact on Borregaard's energy cost in the fourth quarter compared with the fourth quarter last year. We got a question regarding cost development, where we were asked if we could provide further color on cost base developments, and if we expect any changes to these dynamics in the fourth quarter and beyond. This year, we have had quite significant cost inflation in line with what we have seen in Norway as a total and also in many other countries.

In addition, we have had some further increases in costs due to, for instance, that we are upgrading our facility in Wisconsin in the U.S. It's both an upgrade and an expansion. And we have also increased our sales force a little bit. So we have had some additional costs in addition to the general inflation. And we've also seen that the cost of buying equipment to the plant in Norway has increased more than the general inflation, both for equipment for maintenance and for investments. This means that we have had cost increases above inflation so far this year. Whether that will continue is difficult to say. Our aim is to keep our cost increases at or below the general inflation, to have productivity gains also on the fixed cost side. But it's a bit early to see how this will develop going forward. Finally, we've got 2 questions regarding capital expenditure.

The first was regarding our NOK 1 billion CapEx guiding for 2025 where we have spent just NOK 542 million in the first 9 months. And the question was whether we expect NOK 450 million of CapEx in the fourth quarter. And if not, is it actually lower CapEx or just phasing? And our response was that normally, we put a lot of equipment in during the maintenance stop in October. And we have always had a much higher CapEx number in the fourth quarter than in the 3 other quarters of the year. Whether it will reach NOK 400-plus million in the fourth quarter, it's a bit early to tell because we may see that some expenditure may end up in 2026 instead of 2025. However, we think total CapEx will be close to the NOK 1 billion we have in the forecast. In the second question on CapEx, we were asked to confirm that the second phase of Sarpsborg bottlenecking was already included in the CapEx guidance shared at 2024 Capital Markets Day for the year 2026, something we confirmed.

At the end of the outlook presentation, we reminded you that the annual maintenance stop at the Sarpsborg site in October will affect production volumes in the fourth quarter as it did in the fourth quarter last year. And finally, a reminder about the uncertainty in the global economy, particularly related to tariffs, war and conflicts, which may impact Borregaard's markets and costs. Having completed the outlook and the questions from the third quarter presentation, we will point to one more element, which will have an impact on the fourth quarter results. Borregaard has a currency hedging strategy that delays the impact of changes in currency rates. Using rates as of the 21st of October, the net currency impact for the fourth quarter was estimated to be positive by about NOK 5 million compared with the fourth quarter of 2024. So far in the fourth quarter, the Norwegian kroner has been quite stable compared with the third quarter using Borregaard's currency basket.

However, compared with the fourth quarter last year, the Norwegian kroner has strengthened by about 5%, mainly due to a weaker dollar. If the present currency rates continue the rest of the month, we will see an equal or marginally higher net currency impact in the fourth quarter compared with the NOK 5 million based on the calculation from 21st of October. I will now hand over to Veronica, who will lead our Q&A session with questions asked in the chat function of this webcast.

Thank you, Per Bjarne. And we will now open the floor to questions from our listeners. Please use the chat function to submit your questions, and we will address them where possible and as time permits. And during Per Bjarne's reiteration of the outlook, we have received a couple of questions already.

The first one is from Ryan Buckley from Copeland Capital. Can you please outline your views on the advanced bioethanol market for 2026 and what impacts the country level implementations of RED III, the Renewable Energy Directive III will be on demand. Any comments on the regulatory backdrop in Germany or France would also be appreciated.

Well, again, we will come back to the topic during our fourth quarter presentation on the fourth of February. However, I can add that we saw a significant increase of supply of advanced bioethanol in Europe towards the end of 2024, and we don't see any major change in the supply situation as we move into 2026. There are some investigations going on regarding questionable certifications for some suppliers. But the overall picture is that supply has increased permanently as is the intention of incentives within EU and some other European countries.

As to the RED III directive, we don't see that having much of an impact for 2026. As I said, the incentives are there to stimulate increased supply of bioethanol or biofuel. And that's what's happening. The main countries for bioethanol into gasoline is France, Germany, Switzerland, maybe some other countries, but those are the main countries. And we don't expect anything to change really on the regulation side in 2026.

Thank you. There are 2 questions from Elliott Jones from Danske Bank. The first one, can you please provide an update on the antidumping filings and any costs related to this to be seen in the P&L for the fourth quarter and beyond?

I think the main update is that we have provided a lot of information for the Department of Commerce in their investigation of the case. But of course, the department has also been affected by the budget shutdown in the U.S. So the preliminary ruling from them is now more expected to be in the second quarter, maybe May, June, and not in the first quarter as initially said. I think that's the main news on this process. It goes on and the conclusions are a bit postponed.

As to the cost, I said during the Q3 presentation that it will probably be about NOK 10 million, and it will be. It will probably be close to NOK 10 million also already for this year since we have spent a lot of resources now on really the filing and providing the necessary information.

Next one from Elliott Jones. Can you provide some color on the developments seen around wood costs? And have there been any -- and have they come down as you expected?

Again, I think we will have to wait and see what we say during our Q4 presentation in February. We don't want to disclose final numbers today. But there's no doubt that prices has come down. We saw Södra in Sweden announced further price reduction of SEK 45 in December. They had one previous reduction during the second half. So prices are coming down quite significantly, how much, we will come back to.

Thank you. There are currently no other questions but we'll hold on a few seconds to see if there are more coming in due to the delay on the webcast.

Guess that seems to conclude the Q&A session. Thank you for participating in today's pre-close call. We appreciate your interest in Borregaard. Thank you for your interest in Borregaard. This webcast will be published on Borregaard's website until the next pre-close call in March of next year. And as a reminder, this call marks the start of our silent period during which contact with the investment community will be reduced to a minimum. We look forward to our next update and wish you all a great day ahead and happy holidays. Thank you, and goodbye.

Good morning, and welcome to the third quarter 2025 presentation for Borregaard. My name is Tom Erik Foss-Jacobsen. I'm the new CEO since 1st of August, and I'll be joined today by Per Bjarne Lyngstad, our CFO, and we will take you through this agenda. I'll begin with the key highlights from the quarter and provide an update on the market situation across our business segments. I will then share details on our second investment to increase capacity at our site in Sarpsborg, which has recently been approved on the Board level as well as our participation in a convertible loan to Alginor.

Finally, I'll summarize the outlook for the remainder of the year before handing over to Per Bjarne, who will walk you through the financial performance in more detail. Before we continue, I just would like to remind those of you watching the webcast live that you're welcome to submit questions at any time during the presentation, and we'll address them at the end of the presentation.

Let's begin with the highlights for the third quarter. EBITDA came in at NOK 440 million, down from NOK 524 million in the same quarter last year. The overall result was reduced due to lower bioethanol prices and disruption in cellulose production. The disruption had a negative EBITDA impact of approximately NOK 40 million. We saw solid performance in BioSolutions, driven by continued sales growth in agriculture, marking the seventh consecutive quarter of growth in that area. In BioMaterials, we continued to see increased sales prices. Our Fine Chemical Intermediates delivered a strong result. Across all business areas, we had positive net currency effects.

Now let's turn to the market situation, starting with BioSolutions. Sales volume increased 4% compared to the same quarter last year. This growth was again driven by our broad agriculture portfolio with no single product group or single market standing out. We offer a broad portfolio to the agricultural sector. It's comprising approximately 200 different products, and we are serving around 1,000 customers within agriculture. The average price in sales currency and the product mix were in line with the same quarter last year. Q3 typically sees a seasonally weaker product mix, which may slightly dampen the average sales price. The antidumping duties on vanillin from China continued to have a positive, though limited impact on Borregaard's vanillin products. We also saw positive net currency effect across the segment in the quarter.

Then next over to BioMaterials, where performance was weaker in the quarter. The average price in sales currency was 9% higher than in the third quarter 2024, primarily driven by price increases. However, higher sales prices and an improved product mix were more than offset by a significant decline in sales volume compared to the same quarter last year. The lower sales volume was due to the temporary disruption in cellose production and strong deliveries in the corresponding quarter last year. Net currency effects were positive for BioMaterials in the quarter.

Then I would like to address the recent developments regarding allegations of dumping of specialty cellulose products from Norway, specifically Borregaard into the U.S. market. In August, RYAM and the United Steelworkers Union filed petitions in the U.S. requesting antidumping and countervailing duties on specialty cellulose imports. The petition targets products from both Norway, meaning Borregaard as a company and also Brazil, where we have a company named Bracel, which is the target. For Borregaard, this means antidumping duties, while Bracel faces both antidumping and countervailing duties.

Borregaard does not recognize the basis for these claims and have engaged both legal and accounting specialists to defend our position. It's important to note that Borregaard's historical sales of specialty cellulose to the U.S. have been limited. However, there was a moderate increase in sales in 2024, driven by higher demand following the closure of Georgia-Pacific’s Foley plant in Florida.

Regardless of the petition, our exports to the U.S. will decrease in '24 -- excuse me, in '25. As of 1st of August, Specialty Cellulose products from Norway are already subject to a 15% import duty and any additional antidumping duties beyond that are expected to have a limited impact on our export volumes to the U.S. A preliminary decision is expected late in Q1 2025 -- 2026 at the earliest, with a final decision expected likely late in Q3 next year.

Now moving on to Fine Chemicals, where performance was weaker in the quarter. The main driver here was the continued lower sales prices for our advanced bioethanol. In addition, deliveries of bioethanol were lower compared to the high volumes in the same quarter last year. As previously explained, the decline in sales prices for our advanced bioethanol is largely due to a significant increase in market supply, driven by the favorable incentives we have seen in Europe.

In Fine Chemical Intermediates, we saw a strong quarter, supported by a more favorable product mix and higher sales prices compared to the same period last year. The net currency impact in Fine Chemicals was positive. Then I would like to update you on the progress of our capacity expansion at the Sarpsborg site, which is a key part of Borregaard's long-term growth strategy. We have now committed to the second step of our 2-phase expansion plan at Sarpsborg with an investment of NOK 308 million. This follows the first investment of NOK 490 million, which was launched in Q3 last year as part of the investment plan that we announced at our Capital Markets Day.

This -- the main goal for us here is to debottleneck and increase production capacity at the site. When both steps are completed, we expect a total capacity increase of 5% to 10%. The expansion covers our core product areas, lignin-based biopolymers, specialty cellulose and bioethanol. Production output is expected to increase gradually from second half 2026. In addition to higher capacity, these investments will also deliver environmental and cost benefits, including reduced costs and volume of residuals, energy savings and also reduced caustic soda consumption. We also anticipate reduction in COD effluents, supporting our ambitious sustainability targets.

Then I would also like to update you on Borregaard's participation in the recent financing solution for Alginor, which is an important step in supporting their ongoing investments. The financing package is designed to ensure Alginor can complete and commission its commercial-scale demonstration plant for alginates. As part of the financing solution, the convertible loan is being guaranteed by 3 main shareholders: Borregaard, Must Invests and Hatteland Group. Our share of the loan will be between NOK 83 million and NOK 111 million, depending on the level of participation from other shareholders.

Then finally, I will share our outlook for Q4. In BioSolutions, we anticipate Q4 sales volumes to range between 70,000 and 75,000 tonnes, which means below the 77,000 tonnes recorded in the same quarter last year. Antidumping duties on vanillin from China are anticipated to continue having a positive, but limited impact for Borregaard's vanillin products. In BioMaterials, Q4 sales volume is expected to be in the range of 35,000 to 38,000 tonnes. We anticipate a higher share of highly specialized grades compared to Q4 last year, and the average sales price should remain largely in line with Q3 this year.

For Fine Chemicals, sales prices for bioethanol will continue to be significantly lower than last year. The product mix for Fine Chemicals Intermediates in Q4 is expected to be weaker than in Q3. On the cost side, wood costs in Q4 will be slightly lower than in Q4 last year. However, we expect energy consumption, spot energy prices and energy-related raw material prices to increase seasonally in Q4 compared to Q3 this year. The annual maintenance stop at the Sarpsborg site will also affect production volumes in Q4. Finally, we will continue to monitor the uncertainty in the global economy, particularly related to tariffs, war and conflicts, which may impact our markets and costs.

With that, I'll hand it over to our CFO, Per Bjarne Lyngstad, who will take you through our financial performance and key figures for the quarter. Thank you.

Thank you, Tom Erik, and good morning, everyone. Borregaard's operating revenues in the third quarter declined by 8% compared with the third quarter of 2024, mainly due to lower sales volume in BioMaterials and lower sales prices for bioethanol. EBITDA was NOK 440 million, down from NOK 524 million in the third quarter last year. BioSolutions delivered a slightly improved result, while BioMaterials and Fine Chemicals had weaker performance.

Net currency effects were positive by about NOK 30 million compared with the third quarter of 2024. In September, an unexpected outage occurred at a facility at the Sarpsborg site, which supplies a key chemical used in cellulose production. During the outage, we produced cellulose grades outside specifications, leading to delayed deliveries of certain grades. Production of lignin-based biopolymers, biovanillin and bioethanol remained unaffected by the outage.

The EBITDA impact from the production disruption was about NOK 40 million, as previously mentioned by Tom Erik. The EBITDA margin ended at 24.5%, close to the margins we've had in previous quarters this year, but below the margin in the same quarter last year. Earnings per share were NOK 1.96 compared with NOK 2.51 in the third quarter last year. The reduction in earnings per share was mainly due to the decrease in EBITDA adjusted for tax.

In BioSolutions, operating revenues increased by 3%, primarily driven by higher sales volume. EBITDA was NOK 277 million, a slight improvement of NOK 6 million compared with the third quarter last year. Continued growth in sales to agriculture was offset by cost increases exceeding the general inflation. These cost increases were mainly due to higher input and manning costs at our U.S. manufacturing sites.

Antidumping duties on vanillin from China had a positive, but limited impact on vanillin products. The net currency impact was positive for BioSolutions in the quarter. And the EBITDA margin in the third quarter was 26.2%, in line with the same quarter last year. A lower sales volume due to the disruption in cellulose production and high deliveries in the third quarter last year resulted in 15% lower operating revenues in the third quarter for BioMaterials. EBITDA was NOK 112 million, NOK 19 million lower than in the same quarter last year.

On the positive side, we had higher sales prices and improved product mix. However, this was more than offset by the lower sales volume in addition to higher wood costs. The wood costs were impacted by an above-normal inventory level at higher prices at the beginning of the quarter in addition to an unfavorable mix of wood in the quarter. The net currency effects were positive for BioMaterials. The EBITDA margin was 19.2%, in line with the third quarter of last year. Operating revenues in Fine Chemicals declined by more than 30% compared with the third quarter of 2024, primarily due to lower sales prices for bioethanol.

EBITDA ended at NOK 51 million compared with NOK 122 million last year. The reduction in EBITDA was mainly driven by continued lower sales prices for bioethanol. Lower deliveries of bioethanol compared with the high deliveries in the third quarter last year also contributed to the decline. Fine Chemical Intermediates delivered a strong result, supported by a more favorable product mix and price increases compared with the third quarter last year. Net currency effects were positive also for Fine Chemicals. The EBITDA margin was 30.5% in this area, close to 20 percentage points below the same quarter last year.

As mentioned earlier, the net currency impact on EBITDA was positive by about NOK 30 million compared with the third quarter last year. The positive impact was primarily due to reduced currency hedging losses. Hedging losses were NOK 21 million in the third quarter compared with a loss of NOK 86 million in the same quarter last year. The positive impact from lower hedging losses was partly offset by a stronger Norwegian kroner, particularly against the dollar.

Based on Borregaard's currency basket, the NOK was about 4% stronger compared with the same quarter last year. Using currency rates as of yesterday, the estimated net currency effect for the full year of 2025 is now positive by NOK 115 million compared with 2024. The corresponding impact for the fourth quarter is estimated to be positive by about NOK 5 million. Borregaard had a cash flow from operating activities of NOK 423 million in the third quarter. The relatively strong cash flow was driven by the cash effect from EBITDA and a reduction in net working capital.

Investments were NOK 160 million in the quarter. The largest expenditures were related to the Sarpsborg site and ongoing environmental investments, the debottlenecking project and specialization projects in BioSolutions. In addition, Borregaard participated with NOK 23 million in the repair offering in Alginor's capital raise. Net interest-bearing debt decreased by as much as NOK 283 million in the quarter. At the end of the quarter, Borregaard remained well capitalized with an equity ratio of 60% and a leverage ratio, which is net interest-bearing debt over EBITDA of 1.11.

And that concludes today's presentation. Tom Erik and I will now be ready to answer any questions, both from the audience present here in Oslo and from those who follow the webcast. Our Vice President, Finance, Veronica Skevik Frey, will moderate the webcast questions.

Thank you Per Bjarne. We have some questions here. The first one is from Mr. Magnus Rasmussen at SEB regarding CapEx.

You have a NOK 1 billion CapEx guidance for 2025. And have spent just NOK 542 million year-to-date. Should we expect the NOK 450 million of CapEx in Q4? And if not, is it actually lower CapEx or just phasing?

Normally, we put in a lot of equipment during the maintenance stop in October. And we've always had a much higher number in the fourth quarter than in the 3 other quarters in the year. Whether it will reach NOK 400-plus million, it's a bit early to tell because we have, like you say, phasing also here that some costs may go over to 2026. But we think it will be at least close to the NOK 1 billion we have in the forecast.

There's another question also from Magnus Rasmussen regarding BioSolution margins. Despite the foreign exchange tailwind, our BioSolution margins are declining year-on-year. Why? And what should we expect going forward?

As I said, in agriculture, we offer a very broad portfolio. We have around 200 different products sold to 1,000 different customers. And this is also within a broad range of sub applications. So there will be mix differences within agriculture. And I would say that's the main explanation for why you can see differences like that.

But I think we should remind people that we have very high margins in this area, and they have been at well above 25% over quite a long period. And of course, we are hurt a little bit by the dollar also on the top line, which also affects margins a little bit.

Next question is regarding cost base development, and it comes from Mr. Elliott Jones at Danske Bank. Given the margin developments across all quarters, could you please provide further color on cost base developments and if you expect any changes to these dynamics in the fourth quarter and beyond?

What we've seen this year is that we have had quite significant cost inflation like the rest of the country and the world. We have had some further increases in cost due to that we are, for instance, upgrading our facility in Wisconsin in the U.S. It's both an upgrade and an expansion. And we have also increased our sales force a little bit. So we have some additional costs in addition to the general inflation.

And we've also seen that buying equipment in Norway seems like that has increased more than the general inflation, both when it goes to maintenance and also when it goes to investments. So we've seen some cost increases above inflation so far. Whether that will continue is difficult to say. Our aim is to keep our cost increases at or below the general inflation and expect more productivity gains. But it's a bit early to see how that will develop.

Then there is a question on costs related to antidumping. It also comes from Elliott Jones at Danske Bank. With regards to the antidumping allegations, can you provide some color as it -- as to any potential costs you expect to realize, if any, in connection with this?

Yes. As most of you know, U.S. lawyers and experts are quite expensive compared to what we see here in this country. So this will affect our cost going forward. It's still early days, so it's difficult for us to estimate how much this will cost. It's a limited number of products that are involved on our side. So that will bring the cost a bit down. But we are talking some millions in cost here, whether it will be more than NOK 10 million in cost is too early to tell, but we are talking about low double-digit number, I would say.

Next question is related to wood costs. It comes from Mr. Magnus Rasmussen at SEB. Is there a change in wood cost guidance versus what you said at the second quarter?

Not really. If we talk about the price reduction on wood, that's the same. But what we saw in the third quarter, and it will probably have an impact on the full quarter is really that we had a change in the mix. We switch between chips and round wood when we buy wood. And we will transport to distances also a bit varying depending on where the wood is cut.

And also this quarter, we had quite a high and a higher-than-normal inventory of wood at old higher prices. So that affected the third quarter. That was probably a bit more than we had expected also. So the fourth quarter should be better. It's still -- the mix is always a question, but I think we are pretty much in line with what we said, but maybe it will be a little bit higher due to the cost we saw in the third quarter.

Next question is related to average sales price development in BioSolutions. It comes from Mr. Martin Granviken at Kepler Cheuvreux. Could you elaborate on the average sales price development in BioSolutions? If AgChem sales continues to increase, why is the average sales price in sales currency flat year-over-year and the product mix stated to be in line with last year. Wouldn't higher AgChem sales imply a more favorable product mix?

Yes. I think this is a very similar question to the one we responded to initially. So I can only repeat that we think that's related to mix within the Agri where we have a very broad portfolio of a couple of hundred products and 1,000 customers. So it will depend on which applications during the quarter takes more volume, which take less. And you had something on currency as well, Per Bjarne.

Yes. So currency will have an impact also going forward here.

There's another question on wood costs. Comes from Mr. Sam Bland at Moore. Could you talk about what you are seeing on wood cost, which you probably already answered. Is the cost in Q4 expected to be lower versus Q3 as well as Q4 last year? And will this continue to be a cost tailwind in 2026.

The fourth quarter, I explained and it's -- the wood cost will -- are on its way down from what we see in Norway. What you have to remember is that we have half year negotiations on price on wood. So our prices on what we buy are -- will be the same in the fourth quarter as what we bought in the third quarter. So what brought it up in the third quarter was the mix.

And what we see in the market now, the negotiations for next year, they will start from now until the end of the year. So we don't know at present what the wood price will be for next year. But what we see from Sweden and also here in Norway, we see sawmills closing down for at least a period. So there is a pressure on wood prices coming down. And of course, we hope to see more of that in 2026.

Next question is also regarding CapEx. It comes from Mr. Andres Castanos at Berenberg. He also thank you for the presentation. Just wanted to confirm that second phase of Sarpsborg bottlenecking was already included in the CapEx guidance shared in the 2024 Capital Markets Day for the year 2026.

Yes. And the answer is yes, it was.

There is one more question regarding wood cost again. So I think you've already explained that. It comes from Mr. Niclas Gehin at DNB Carnegie. Could you give a rough estimate of how much the effect of higher wood cost in the beginning of the quarter was related to what it would have been with a new wood cost for the rest of the second half.

Yes, I would say that the additional costs we had compared to last year in the third quarter was in the range NOK 10 million to NOK 15 million. And that will -- it will be in that range, maybe closer to NOK 10 million lower in the fourth quarter compared to the third quarter and pretty much the same compared to last year also.

There are no more questions on the web.

Yes. I just want to check if there are any questions from the audience here in Oslo.

[Indiscernible] Can you provide some color on how much deliveries were down in -- of bioethanol in -- or Q-on-Q or year-on-year?

I could give you a percentage. I think it was about 30%. But it was an extremely high delivery in the third quarter of last year. It's the highest delivery in 1 quarter that we ever ahead. So this was really more a normal delivery quarter for bioethanol. It was just that it was so high in the third quarter last year.

And one last for me. What do you expect in terms of mix in BioSolutions in Q4 on the Agri side?

Well, we don't comment specifically on mix. We just give the volume range that we expect and average sales pricing to continue. But I can say, in general, that we are positive to the development, we're seeing in Agri, as I said, it's the seventh consecutive quarter that we report growth in Agri. So the long-term picture for Agri is something we're very positive about and that our portfolio fits very well with the needs of that market.

I think that was the final question today. Thank you for your attention.

Thank you very much.

My name is Veronica Skevik Frey. And I'm Vice President Finance in Borregaard. I'm joined today by our CFO, Per Bjarne Lyngstad, and we are live from the biorefinery in Norway.

And here is the agenda for today's call. First, Per Bjarne will reiterate the outlook from the latest quarterly report. Secondly, he will discuss the disruption at the Sarpsborg site. Third, currency and commodities input, and at last the Q&A session. And regarding the Q&A session, feel free to start typing your questions in the chat function already now.

Now I will hand over to Per Bjarne, who will then reiterate the key points from the outlook given in our latest quarterly report.

Thank you, Veronica, and good afternoon, everyone. I will start with reiterating the key points from the outlook after the second quarter. And when relevant refer to comments given in the Q&A sessions at the webcast for the second quarter on the 16th of July.

When I go through the outlook for BioMaterials, I will also comment on the Stock Exchange release on the 15th of September regarding temporary disruption in production of specialty cellulose here at the site in Norway.

I will start with BioSolutions. In BioSolutions, the outlook for the full year sales volume was unchanged at about 330,000 tonnes. The sales volume in the third quarter is expected to be largely in line with the third quarter of 2024, which was 81,000 tonnes. We continue to expect a positive but limited effect from the antidumping duties on vanillin.

We've got 2 questions regarding BioSolutions at the webcast in July. The first question was related to agriculture. We were asked if strong sales into agriculture will continue into the second half of 2025 and into 2026.

We confirm that this trend has been ongoing for several quarters. Actually, this was the sixth quarter in a row where we pointed at a strong performance in agriculture. We are well positioned to benefit from green trends in agriculture and the growth spans our entire product portfolio. We think that agriculture will still be a very attractive market for Borregaard going forward.

The second question was about the outlook for lignin prices into the second half of 2025 and into 2026. Borregaard uses value-based prices where possible. Pricing has been fairly flat recently, and we don't have any more exact answer on where pricing will go from now. It will depend on how we see demand developing. Remember that we have more than 600 products in this area. If there is a strong demand across the portfolio, we will be in a better position to adjust pricing than if we see a more normal demand development.

Turning to BioMaterials. The sales volume in 2025 was at the second quarter presentation in July forecasted to be approximately 150,000 tonnes with a higher share of specialized grades than in 2024. Average prices in sales currency for the second half of 2025 were expected to remain largely unchanged from the first half of the year. The third quarter volume was projected to be between 35,000 and 38,000 tonnes.

On the 15th of September, Borregaard sent out a stock exchange release about temporary disruption in production of specialty cellulose, which will affect the third quarter and full year volumes. The disruption was due to an unforeseen outage at the facility at the Sarpsborg site, which supplies a key chemical used in the production of specialty cellulose. During the outage, cellulose production was restricted to grades outside standard specifications, resulting in delays of shipments of certain specialty cellulose grades.

Production of other products was not affected during the outage. Deliveries of specialty cellulose in the third quarter are now expected to total about 30,000 tonnes. Compared with the previously forecasted range of 35,000 to 38,000 tonnes. The estimated negative impact on the group EBITDA for the third quarter is in the range of NOK 40 million to NOK 50 million.

I can add a few more comments to the stock exchange release. The disrupted facility is now running at full capacity. The off-spec material will be sold over time, probably at reduced prices, and we expect only minor, if any, EBITDA impact from these sales in coming quarters. However, we might see a negative impact on our average sales price in the coming quarters.

At the webcast in July, we got several questions regarding the outlook for BioMaterials. The first question was about mix improvement and U.S. demand for cellulose products. As to mix improvements, the 2 closures in the U.S. and Canada by Georgia Pacific's Foley plant and the Temiscaming facility over RYAM had an impact on the overall market balance. These closures have given Borregaard openings in certain areas like high-quality casings where Georgia Pacific used to be a player in the past.

Historically, Borregaard hasn't sold much into the U.S. Last year was an exception due to the closures at the Foley and Temiscaming mills. This year, U.S. specialty volumes will be lower, especially after the implementation of import tariffs of 15% for goods from Norway from the beginning of August.

The second question was about the market balance for Specialty Cellulose going forward compared with the last 10 years. In our response, we refer to what we've said since our Capital Markets Day 3 years ago that by 2030, we expect a tight market balance. Closures at the Georgia Pacific Foley and Temiscaming mills have shifted the balance further. But the slowdown in construction has so far offset this. If construction normalizes and we achieved the expected growth rates, and a tightness will come sooner rather than later. Remember that the barriers to entry are high for other companies in the specialty cellulose business. And it's difficult for them to go into most of the specialty cellulose segments.

Then moving on to Fine Chemicals, where we expect higher sales prices and volumes for advanced bioethanol in the second half to be similar to the first half. Sales volume for Fine Chemical Intermediates is expected to increase compared with the second half of 2024.

The first question we got regarding Fine Chemicals was about bioethanol sales volumes and the stability of Fine Chemicals EBITDA over the past 3 quarters. In our response, we pointed to the fact that we had a slightly weaker product mix in the second quarter and especially for Fine Chemical Intermediates a more normalized product mix may give us a slight lift in the remaining quarters this year. The run rate for Fine Chemicals will be close to what we have seen recently, possibly a bit better in the second half than in the first half.

It's important to note that advanced bioethanol is not a typical Borregaard specialized product. The market balance sets the price, which is unusual for us. Price development depends on supply and incentives. Also, there's an ongoing EU case involving possible fraud in advanced bioethanol approvals, which could affect market balance.

The second question was, if we assume stable bioethanol prices, could Fine Chemical margins improve? The answer was, no. If you go back to what I just said, out of the markets where Borregaard is active, this is the most commodity-like market we are in. It's really all down to how the market balance will play out going forward.

Then back to the outlook and the development in important cost components. Wood costs in the second half of 2025 are expected to be approximately 5% lower than in the first half. It's important to note that our wood costs include a transportation component of 25% to 30%, with the wood itself accounting for 70% to 75% of the total costs. Based on price developments, delivery patterns and inventory levels, we expect a 5% cost reduction in the second half.

We got a question about discrepancies in wood costs between the Nordic pulp market and the rest of Europe and that other Nordic peers are guiding for larger drops. Borregaard's present wood cost has landed cost at our site in Norway, which includes a significant transportation component. So when we report a 5% reduction, the actual wood price drop is higher than the total cost reduction.

Wood cost levels in the Nordic regions are much higher than in Europe and other parts of the world. So we don't see really that we have a very different drop in the price from other companies. Then leaving the wood cost and going back to the outlook where we said that completed environmental investments will contribute positively by reducing energy costs and CO2 emissions.

As to energy costs, remember that energy consumption is normally lower in the summer season and higher during winter. About 15% of Borregaard's energy consumption is dependent on energy spot prices for electricity and LNG. For LNG, we have a 1-month delay compared with the market price, which is the Dutch TTF. Electricity prices in Norway have on average been significantly above last year's prices in our area so far in the third quarter. LNG prices have so far been marginally lower than last year's, taking the 1-month delay into consideration.

In total, we have higher spot prices, and it should, to a larger extent, be offset by Borregaard's reduced energy consumption related to the spray dryer investment at the site in Norway.

At the end of the outlook presentation, we reminded you that about you about our general disclaimer, that the geopolitical uncertainties, such as tariffs and conflicts may impact Borregaard's markets and costs. However, we did not have any specific updates on this at the second quarter presentation.

Having completed the outlook, we will point to one more element, which will have an impact on 2025 results. Borregaard has a hedging strategy for currency that delays the impact of changes in currency rates. Using currency rates as of the 15th of July, the net currency impact for the full year of 2025 was estimated to be positive by about NOK 105 million compared with 2024. And the corresponding impact for the second quarter of 2025 was estimated to be positive by about NOK 20 million compared with the second quarter of 2024.

We have continued to see a strengthening of the Norwegian kroner so far in the third quarter, especially compared with the U.S. dollar. Today, the Norwegian Central Bank lowered its policy rate by 0.25%. And the NOK has weakened slightly towards our main currencies after that. If the present currency rates continue the rest of the month, we will see a marginally lower net currency impact in the third quarter compared with the NOK 20 million based on the calculation from the 16th of July.

If today's rates continue for the rest of the year, the net currency impact will be more in the range of NOK 90 million compared with positive compared with NOK 105 million based on the calculation from the 16th of July.

I will now hand over to Veronica, who will lead a Q&A session with questions asked in the chat function on all this webcast.

Thank you, Per Bjarne.

So we will now open the floor to questions from our listeners. Please use the chat function to submit your questions, and we will address them where possible and as time permits.

And we've already got one question from Mr. Elliott Jones from Danske Bank.

Has there been any more developments concerning the antidumping filing from a U.S. company against Norway and Brazil?

What I can say about that is that the process is ongoing. We have filed our first view on volumes in the antidumping case. The volumes that was used by -- in the petition, which is what is called, when you raise an antidumping case was too high, really. It was something as far as we can see, there was something wrong with the U.S. import statistics so there was a mix of our volumes and other very low-priced volumes.

So we are in a phase where we try to straighten out errors in the foundation. But this process will go on for quite some time. Of course, we were surprised by this claim by our main competitor in specialty cellulose, RYAM. And we have a problem understanding the numbers that's in the petition. But this will take some time, as I say, and we are fighting this case together with our lawyers in the U.S.

And that was the only question so far. So that seems to conclude the Q&A session. And thank you for participating in today's pre-close call. We appreciate your interest in Borregaard. This webcast will be published -- will be published on Borregaard's website until the next pre-close call in December this year.

As a reminder, this call marks the start of our silent period during which contact with the investment community will be reduced to a minimum. We look forward to our next update and wish you all a great day ahead. Thank you, and goodbye.

Thank you.

Good morning, and welcome to the Second Quarter 2025 presentation for Borregaard. My name is Per Sørlie, I'm the CEO of the company, and I'll be joined during this presentation by Per Bjarne Lyngstad, our CFO, and we will take you through this agenda. I'll talk about the highlights in the quarter, the market situation for the business segments and environmental investment that we have just passed at the Board level and also the outlook for the remainder of the year. And then Per Bjarne will come back and talk about the financial performance in more detail.

Firstly, the highlights for the second quarter. EBITDA came in at NOK 522 million, up from NOK 510 million in the same quarter last year. We saw strong performance in BioSolutions, where the growth, again, was driven by increased sales to agriculture. We also saw a very good result in BioMaterials, where higher sales prices, improved product mix and increased sales volume contributed positively, but this was partly offset by increased wood costs. In Fine Chemicals, the result came down, and this was driven by lower sales prices for bioethanol. Altogether, we had positive net currency effects across all business areas.

Then onto the market situation. First, with BioSolutions. The sales volume came in 2% higher than the same quarter last year. And again, this was driven by a broad portfolio of agriculture. So there's no single product group that stands out. It's -- we have a broad offering to agriculture.

The average price in sales currency is in line with the same quarter last year. However, we have guided for a seasonally lower product mix in less favorable product mix in the second quarter compared to the first quarter. So indicating that prices per product line is stable. However, there is a mix change that takes the price down somewhat compared to the first quarter.

The vanillin products, it continues to be a positive impact from U.S. anti-dumping duties on vanillin from China. However, this is again a limited impact in the quarter. So it is not really a deciding factor for explaining the increased result. Positive net FX impact in the quarter as well.

Then on to BioMaterials, strong performance in the quarter. The average price in sales currency is 10% above the same quarter last year, and this is primarily driven by price increases. However, the sales volume is also 4% higher than in the same quarter last year. And more importantly, the share of highly specialized grades has increased compared to the same quarter in 2024. So this is also a factor in the average sales price. However, the primary driver is the price increases. Also, in this business area, a positive FX impact.

Then on to Fine Chemicals. We have seen continued lower sales prices for bioethanol. And as we have explained before, EU incentives have increased the supply of advanced bioethanol into the market. So there is a supply-demand imbalance that is driving prices down at the moment.

In Fine Chemical intermediates, we have a slightly weaker product mix compared to the same quarter last year and a positive net FX impact here as well.

Then, we just want to inform the market that we have -- the Board has approved an environmental investment during the second quarter at the Sarpsborg biorefinery. This is an investment of NOK 138 million, and it's regarding a 30-megawatt electric boiler. This is part of the transition plan to meet the 2030 climate targets, and it will reduce CO2 emissions and increase the renewable energy share in our total portfolio.

We have talked in the past that environmental investments are a hybrid in the sense that they are somewhere in between maintenance CapEx and expansion CapEx. Environmental investments usually have a cost savings side, but they don't usually meet the full internal rate of return requirement of a minimum 15%. However, we believe that this could be a financially sound investment. It will lead to lower energy costs and reduced exposure to CO2 quotas in the European Union. So it's a good chance that this investment will meet our hurdle rate of 15% return on capital.

The expected reduction in CO2 emissions is up to 18,000 tonnes, which will actually move the needle at the Sarpsborg biorefinery and the first phase is operational from 2027 with full effect from 2030. So we feel that we are comfortably on our way to deliver on our 2030 targets.

Then finally, I'll talk about the outlook, which is quite in line with what we said after the first quarter. In BioSolutions, the sales volume in 2025 is forecast to be approximately 330,000 tonnes. The sales volume in the third quarter is expected to be largely in line with what we delivered in the third quarter in 2024. And the anti-dumping duties on vanillin from China are still expected to have a positive, but again, a limited impact on the result.

In BioMaterials, the sales volume in 2025 is forecast to be approximately 150,000 tonnes. However, the share of highly specialized grades are expected to be higher than in 2024, which is positive for the mix. In the second half 2025, the average price in sales currency is expected to be largely in line with what we had in the first half of 2025. So more or less unchanged pricing going into the second half. The sales volume in the third quarter is expected to be in the range of 35,000 to 38,000 tonnes.

In Fine Chemicals, the sales prices in the second half for advanced bioethanol and the volume are expected to be largely in line with what we saw in the first half in 2025. On the other hand, the sales volume for Fine Chemical intermediates is expected to increase in the second half or increase versus what we had in the second half last year.

On the cost side, the wood cost in the second half 2025 will be approximately 5% lower than what we had in the first half of 2025. Again, I should explain that when we talk about wood costs, those costs are delivered at our biorefinery in Norway, which means that there is a transportation component of 25% to 30% in the wood cost, and the wood cost itself is 70% -- or 65% to 70% -- 70% to 75% of the overall wood cost.

Again, looking at price developments in wood cost and also the delivery patterns and also the inventory levels going in and out of the second half, our expectation is that the product cost will come down roughly 5%.

There will also be a positive contribution from the investments that we have completed within environmental issues to reduce energy costs and CO2 emissions. That will also have a positive impact on costs.

Again, we have the uncertainty related to tariffs and conflicts and war that may impact Borregaard's market and costs, but we don't have any particular news to report at this point.

So that completes my outlook for the remainder of the year. I will now hand over to Per Bjarne for the financial performance and the figures.

Thank you, Per, and good morning, everyone. Borregaard's operating revenues increased by 5% in the second quarter compared with the second quarter of 2024, mainly as a result of higher sales prices and volume in BioMaterials.

EBITDA increased by NOK 12 million to NOK 522 million. The result in BioSolutions and BioMaterials increased while Fine Chemicals had a lower result.

Net currency effects were positive by about NOK 35 million compared with the second quarter last year. The EBITDA margin ended at 25.5% close to the margin in the same quarter in 2024 and in the first quarter this year.

Earnings per share increased to NOK 2.56 compared with NOK 2.45 in the second quarter last year. The increase in earnings per share was mainly due to the improved EBITDA, adjusted for tax.

In BioSolutions, continued growth in sales to agriculture were the main reason both for the increase in operating revenues and for the improvement in EBITDA compared with the second quarter last year. Operating revenues increased by 3%, and EBITDA reached NOK 338 million, NOK 20 million above the second quarter last year. Anti-dumping duties on vanillin from China into the U.S. had a positive but limited impact for Borregaard's vanillin products.

The net currency impact was positive in the quarter. And we had a strong 28.5% EBITDA margin in the second quarter, close to the level we achieved in the second quarter last year and in the first quarter this year.

BioMaterials operating revenues in the second quarter were 19% higher than in the second quarter last year, mainly as a result of higher sales prices and volume. EBITDA was NOK 143 million, NOK 53 million higher than in the same quarter last year. The improved result was due to higher sales prices and improved product mix and increased sales volume, partly offset by higher wood costs.

Net currency effects were positive also for BioMaterials. EBITDA margin increased to 19.3% in the second quarter close to 5 percentage points higher than in the same quarter last year.

Operating revenues in Fine Chemicals were 25% below the second quarter of 2024, mainly due to lower sales prices for bioethanol. Lower sales prices for bioethanol were also the main reason for a lower EBITDA in Fine Chemicals. EBITDA ended at NOK 41 million compared with NOK 102 million in the second quarter last year.

For Fine Chemical intermediates, the result was impacted by a slightly weaker product mix compared with the second quarter last year. Net currency effects were positive for Fine Chemicals also in the quarter. The EBITDA margin was 24.4%, 21 percentage points below the same quarter last year.

The net currency impact on EBITDA was, as I said, positive by about NOK 35 million compared with the second quarter last year. The positive impact was mainly a result of reduced losses on currency hedging. The positive impact from reduced hedging losses were partly offset by the impact from a stronger Norwegian kroner especially compared with the U.S. dollar.

Using Borregaard's currency basket, the Norwegian kroner was about 2.5% stronger than in the second quarter last year.

Using currency rates as of yesterday, the net currency impact for the full year of 2025 is now estimated to be about NOK 105 million compared with the full year of 2024. The corresponding impact for the third quarter is estimated to be positive by about NOK 20 million compared with the third quarter of last year.

Borregaard had a cash flow from operating activities of NOK 385 million in the second quarter. In the quarter, the cash effects from EBITDA and a moderate reduction in net working capital were partly offset by tax payments. Investments were NOK 239 million in the quarter.

The largest expenditures were related to the Sarpsborg site and ongoing environmental investments, the debottlenecking of the site and specialization projects in BioSolutions.

In addition, Borregaard participating in a capital raise with NOK 55 million in Alginor. In July, Borregaard's commitment in a repair offering to the capital raise in Alginor resulted in an additional investment of NOK 23 million.

Net interest-bearing debt increased by NOK 229 million in the quarter. The net interest-bearing debt was impacted by the dividend payment of NOK 424 million in April.

At the end of the second quarter, Borregaard is well capitalized with an equity ratio of 57% and a leverage ratio, which is net interest-bearing debt over EBITDA of 1.20.

And that concludes today's presentation. Per Sørlie and I will now be ready to answer any questions from those who follow the webcast. Our Director, Investor Relations, Knut-Harald Bakke, will moderate webcast questions.

Thank you. First question from Marcus Gavelli of Pareto Securities regarding wood costs. Is there a significant discrepancy between what you're seeing in the Nordic pulp market compared to the rest of Europe? Just asking because we've seen other Nordic peers guiding for larger drops.

I'm not sure exactly how these are presented. That's why I made the point that we present these costs -- landed costs at our site in Norway, which means that there is a significant transportation component, which means that when we say 5%, the price reduction on wood cost is higher. Wood itself is higher than the total cost for us. So I don't know how other people present the same number, but it is well known that the wood cost level in the Nordic region is much higher than in Europe and other parts of the world.

Second question from Magnus Rasmussen of SEB regarding Bioethanol and Fine Chemicals. What can you say about volumes in Bioethanol sales over the past 3 quarters? Fine Chemicals EBITDA has been very stable for 3 quarters, while it historically has varied with a number of Bioethanol shipments from Sarpsborg. Should we, at current bioethanol price levels, expect a more stable EBITDA level around what we have seen for the past 3 quarters?

One thing you should remember is that we had a slightly weaker product mix in Fine Chemical intermediates in the second quarter this year. So that will probably give us slight lift in the 2 remaining quarters for the full year. But the run rate is not far from what we've seen so far, at least in the 2 last quarters or 3 last quarters. So it's close to that level, but maybe a little bit better in the second half, but not much.

I would like to add that just remind that bioethanol advanced -- even though it's an advanced bioethanol, this is not a typical Borregaard specialized product. So it's really the market balance that sets the price, which is not normal for the types of markets that we are active in.

So it's hard for us to exactly predict what the market price will be. This is really dependent on the development in supply of advanced bioethanol, which is driven by the incentives. But you can also remind the market that there is a case going in the EU that there has been some fraud issues connected to what has been approved as advanced bioethanol, and we don't know how that will play out and how that will influence the market balance going forward.

So a follow-up question on Bioethanol and Fine Chemicals from Marcus Gavelli of Pareto Securities then. Assuming bioethanol prices remain stable, is there any other reason to expect Fine Chemicals margins to improve from current levels over the next year or so?

I think it goes back to what I just said that out of the markets where Borregaard is active, this is the most commodity-like market. So it's really all down to how the market balance will play out going forward.

Next question from Elliott Jones of Danske Bank regarding agriculture. Can we expect the dynamic of continued sales into agriculture to remain for the second half of 2025 and into 2026? Or do you expect this to tail off at some point?

Well, it has been going on not only for the first half; it has been going on for several quarters now. And we think that we are well positioned to benefit from, let's say, green trends in the agricultural markets. And we are also seeing that this is across the whole portfolio. So it's not just 1 single product line that is really benefiting from this trend. So yes, we think that we will still be -- it will still be a very attractive market for Borregaard going forward.

Next question from Andres Castanos-Mollor of Berenberg related to Specialty Cellulose. Can you please elaborate on the mix improvements in cellulose products? Which end markets are doing well? Are you seeing normal demand from the U.S. for your cellulose products after April 1?

Well, first -- the latter part first. I mean, historically, Borregaard has not really sold any volumes into the U.S. As we reported after the first quarter, we said that last year was an exception because we sold a certain volume into the U.S. last year, which was driven directly by the closures in the U.S. and Canada by GP Foley and the Temiscaming facility at RYAM.

This year, we expect to sell a lower volume again to the U.S., so it will not be a significant volume going into the U.S. And -- but the demand increase is driven by the -- partly by the closures. The 2 closures of capacity that happened over the last 2 years has had an impact on the overall market balance. So this will mean that Borregaard has openings in certain areas like casings, for instance, high-quality casings where GP used to be a player in the past.

Then a question from Niclas Gehin of DNB Carnegie regarding the environmental investment. What energy source is the new electric boiler meant to replace? Is this electric boiler meant to be used when electricity prices are low or more on a continuous basis? Can you say how much CO2 emissions is coming from the current energy source today?

Well, this is primarily a replacement for LNG. And if you look at historical price levels there, it's -- Borregaard has -- let's, Borregaard has -- we have a very flexible energy system where we can use electricity, LNG and fuel and oil at certain -- and we can switch within an hour, if you like. So we can optimize our energy consumption. But the end game, of course, is to reduce the CO2 emissions. This is the main source of CO2 emissions for Borregaard. And we want to reduce that. So -- but -- and this will primarily -- the target here is to reduce the LNG consumption and replace it with electricity.

I would also add that when you compare LNG prices and electricity prices, the electricity with spot price in Norway is really what our landed cost. While LNG price, the one you see on the Dutch TTF, there, we have a higher landed cost than what you see there due to, among other things, transportation. So you can't really compare the spot prices. You have to add something on the LNG price.

Next question from Andres Castanos-Mollor from Berenberg regarding the Alginor investment. Can you please describe where Alginor is in its journey and what milestones are ahead? What stake do you control pro forma for the confirmed investments?

Well, Alginor is in the middle of a project to complete their first factory, which will be something between a demonstration scale unit and a commercial scale unit. And that will go online middle of 2026. So roughly close to 1 year from now, that will be ready to go online, and that will sell food-grade alginate and hopefully, also a few other more advanced products that can be made from the same raw material source. So that is really the first and important step to prove the concept that it will actually work. So we are -- we have to wait until a year or 2 from now to see how that plays out in the marketplace.

And our stake in Alginor is after the repair emission, 41%.

Next question from Martin Melbye of ABG regarding lignin. What is your outlook for lignin prices into the second half in 2026?

Well, I mean, generally speaking, we practice value-based pricing if we can. And right now, we have been in a period where we have had fairly flat pricing. So it's -- I don't have any more exact answer on where we go from now. It depends on how we see demand across -- remember that we have 600-plus products in this area. So if there is a strong demand across all those -- across the portfolio, you are in a better position to adjust pricing than if you have more normal demand development. And for the last 6, 12 -- 6 to 9 months, we have had fairly flattish pricing in sales currency.

I think this will be the final question from Martin Melbye and ABG regarding Specialty Cellulose. Please elaborate on the Specialty Cellulose market balance going forward versus the last 10 years?

Well, we have said this several times. We started saying this 3 years ago at our Capital Markets Day that by the end 2030, we expect -- with normal growth rates, we expect to be a very tight market balance in specialty cellulose.

After we communicated this, there has been a significant change in the market balance with the closure of GP Foley and Temiscaming. But at the same time, there has also been a slowdown in construction, so which -- that's the cyclical part of the specialty cellulose market. So if you have a normalization of the construction market and if we continue with the expected growth rates, we will be tight sooner rather than later. That's been our message. The barriers to entry are very high going into these segments.

Thank you. And that concludes the Q&A session for the second quarter 2025.

Thank you.

Thank you. So before we close today's webcast, I would like to say a few words. Some of you -- as some of you may know, I will resign as CEO of Borregaard on the 1st of August this year. And today has been my 52nd consecutive quarterly report since the listing of Borregaard in October 2012.

I would like to thank the Board of Directors for their support to the Borregaard management team through my 26 years as CEO of the company. And I'm also pleased that the Board of Directors has appointed an internal candidate as my replacement, successor, Tom Erik Foss-Jacobsen. This is very much in line with the Borregaard tradition over more than 130 years.

So after 35 years in the Borregaard management team, it's time for me to say thank you for your trust, and goodbye.

My name is Knut-Harald Bakke. I'm the Director of Investor Relations, and I'm joined today by CFO, Per Bjarne Lyngstad, and we are live from the biorefinery in Norway. The agenda for today's call is the following. First, we will look at the outlook from the latest quarterly report. Secondly, we will look at tariffs, the possible first and second order effects for Borregaard as communicated on the Q1 results presentation. Thirdly, we will look at currencies and commodities inputs that are publicly observable. And finally, we will have a Q&A session. And regarding the Q&A session, feel free to start typing your questions in the chat function already now. Now I will hand over to Per Bjarne, who will reiterate the key points from the outlook given in our latest quarterly report.

Thank you, Knut-Harald, and good afternoon, everyone. I will start with reiterating the key points from the outlook. And when relevant refer to comments given in the Q&A session at the webcast for the first quarter on the 30th of April this year. I will start with BioSolutions. In BioSolutions, the outlook after the first quarter was quite similar as to what we said after the fourth quarter presentation in late January. The sales volume is expected to be approximately 330,000 tonnes for the full year of 2025, driven by strong sales through agriculture. This also implies a positive mix effect.

Over time now, agriculture has grown to become the clear #1 market for BioSolutions. Last year, agriculture was well above 40% of total revenues in BioSolutions. The sales volume in the second quarter is expected to be approximately 85,000 tonnes, which is seasonally higher than in the first quarter. However, in the second quarter, we expect a less favorable product mix as we normally have lower sales and lower share of specialties. Still, the sales will be driven by strong sales through agriculture also in the second quarter.

We continue to expect a positive but limited effect from the antidumping duties on vanillin. We got several questions regarding the outlook and market situation for BioSolutions at the webcast. The first questions were related to agriculture. We were asked if we could give some more flavor on what is driving the strong uplift in profits for the agriculture products, if we have launched new products and hired new sales teams and is demand from customers shifting.

The answer from our side was that it's connected to the fact that our products are green and green are favorable right now and especially in new developments like biocontrol. Our products are quite unique in properties. For example, farmers like to blend different products like fertilizers and pesticides, so that they don't have to put them into the fields several times. This saves them time and it saves them costs. And our product is our enabler for blending different kinds of products before you add them into the fields. We have recently established an agricultural lab in Mumbai in India, and we are constantly developing and improving our products. But it's really the focus on biocontrol and green aspects of the products that's driving the strong growth in agriculture.

The next question was about the 2% average price increase in sales currency in the first quarter compared with the first quarter of 2024. Is that the fair assumption for the remainder of the year? Or is that, to a large extent, impacted by product mix changes? We confirm that the average price was primarily driven by product mix improvement. The pricing in itself is fairly flat in currency.

Then turning to BioMaterials. The sales volume in 2025 is forecast to be approximately 150,000 tonnes, which is in the low end of what we guided for in the beginning of the year. The change in the volume forecast is mainly due to increased uncertainty introduced with tariffs and trade wars. However, the share of highly specialized grades is expected to be higher than in 2024. The average price in sales currency is still expected to be 8% to 10% higher in the first half of 2025 compared with the first half of last year. A large share of the portfolio has the potential for a sales price adjustment on July 1. How that will pay out remains to be seen.

The sales volume in the second quarter is expected to be largely in line with what we saw in the second quarter last year, which means that it will be quite a solid quarter volume-wise. We also got several questions regarding the outlook for BioMaterials at the webcast. The first question was on BioMaterials volumes. How much visibility do we have on the remaining 115,000 tonnes, we estimate will be delivered through 2025. And if you could shed some light on how customer discussions have progressed in recent months.

Our response was that the practice in Specialty Cellulose, which is a part of BioMaterials is to have multiyear volume-based contracts and annual price negotiations. And then this year, semiannual price negotiations. The practice among customers is that they typically have 2 or 3 suppliers. And if the customer needs less volume than you estimated in the contract, typically, the customer split that evenly between the different suppliers.

As far as we can see, the construction market is still soft. Historically, that's the most cyclical customer group. In addition, there is also cheap cotton linter pulp available which is an alternative product coming out of China. The other customer groups are more stable and even countercyclical. So we are following and watching closely the demand from the construction people. The next question was that it seems like Borregaard has sort of changed price terms in BioMaterials from annual to semiannual negotiations or at least partly. We were asked to explain why that is and how much flexibility we have to increase prices if costs increase.

Our response was that this is not something that we necessarily think is desirable. But if you look at the recent 5 years, it started with the COVID pandemic. And after a while, abrupt changes in cost that required price adjustments. We made price adjustments back in 2020 and 2021 that were outside of the contracted price increases. In order to have that flexibility both between the customers and us, we have introduced semiannual price negotiations for some customers. Historically, if you go back 10 to 15 years, we also had annual pricing on wood costs in Norway, but that is also now semiannual.

So it's something that has evolved. It's not necessarily something we would like to see, but that's the fact, and it gives us more flexibility if necessary. Then moving on to Fine Chemicals, where the favorable incentives in advanced bioethanol have triggered substantial new supply from agricultural waste and other sources. That's why the sales prices for Borregaard's bioethanol are expected to be significantly lower than what we saw last year. And it's also going to be lower than what we achieved in 2022.

After the fourth quarter presentation, we said it would be lower than in 2024 and probably more in line with 2022 pricing. But the development we saw in the first quarter make us believe that it would come even below the 2022 price level. The sales volume for Fine Chemical intermediates is expected to increase compared with 2024. On the cost side, wood costs have been on a high level for some time. We expect no change in the wood cost level in the second quarter compared with what we saw in the first quarter.

We got a question regarding wood costs at the webcast, whether it was fair to say that wood costs have increased more than expected when we negotiated 2025 prices in November. Our response was that we don't think so, except for slightly more logistics costs for inbound transportation of wood. The wood cost is much higher than in the first half of last year, obviously, but we said it will be comparable to the second half of last year. and it has been slightly higher, driven then by more logistics costs.

So it's a minor, it's not a big thing. Then leaving the wood cost, we continue to see reduced energy costs from the recent investments, the environmental investments that we have made, for instance, in the electrification of [indiscernible] biopolymers, give reduced energy consumption and reduced energy costs. And as intended with these investments, also reduced CO2 emissions. As to the energy cost, remember that the energy consumption is normally lower in the summer season and higher during winter. About 15% of Borregaard's energy consumption is dependent on energy spot prices for electricity and LNG.

For LNG, we have a 1-month delay compared with the market price, which is Dutch TTF. Electricity prices in Norway have on average been above last year's prices so far in the second quarter. Also, LNG prices have so far been higher than last year, taking the 1-month delay into consideration. The higher spot products should, to a large extent, be offset by Borregaard's reduced energy consumption related to the spray dryer investment at the site in Norway.

There are still war and conflicts affecting the global economy. And the general disclaimer at the end of the outlook is reminding you of that. We will have to be aware of that and take necessary precautions as things play out. In the first quarter presentation, we had a slide and talked about tariffs and how they could impact Borregaard. On the slide, we showed Borregaard's sales distribution in 2024. As an export company, Borregaard is slightly more tilted towards the other -- towards other regions than Europe. 46% of our sales were in Europe, 23% in Asia and 30% in the Americas.

If we look specifically at the United States, which currently have introduced a 10% tariff on imports into the U.S. from Norway, 23% of our sales last year were in the U.S. So the remaining 7% were in other parts of Americas. We have 2 production facilities in the U.S. The local U.S. lignin production and sales constituted roughly 13% of Borregaard's total sales last year. whereas the export from Norway into the U.S. was roughly 10% of total sales for Borregaard. The export that we do into the U.S. is Specialty Cellulose. It's biovanillin and it's specialties in biopolymers, mostly quite unique products.

The sales of Specialty Cellulose are quite recent because of the closure of 2 Specialty Cellulose mills in the U.S. and Canada. Our expectation this year is that regardless of the tariffs, we would have reduced sales into the U.S. from Norway. So the end last year was an exceptional year with 10% of sales coming from Norway going into the U.S. These are the direct effects and we think that these are quite balanced because the majority of the sales in the U.S. are produced and sold in the U.S. and the imports into the U.S. are mostly quite highly specialized products that are difficult to copy, and there are a few alternatives to them.

If you look at the second order effects, these are the most difficult to predict. Borregaard has a hedging policy on foreign exchange, which gives predictability on the exchange rates for the next 2 to 3 years. Even though we have cost in Norwegian kroner, we have hedged the currency both in dollars and euros. So the currency will be impacted here if there is a change. Then we have the more indirect effect of customers' customer and Borregaard has 46% of its sales into Europe. Most of these customers are global companies that produce for the whole world market. So indirectly, some of our products will end up in other products that will be sold to the U.S. However, Borregaard is extremely diversified.

We have 800 products and sell to more than 100 countries. History, for instance, during the financial crisis in 2008 and 2009, has shown that Borregaard has a lot of options and alternatives in the marketplace. Our major concern is that the trade wars may result in a general recession. Then, of course, all kinds of products will be impacted somehow eventually. But we think that our geographic exposure and our 800 products in the portfolio gives us a good starting point.

And also, the specialization strategy in itself is the best recipe for handling this situation because products that are difficult to copy will always be in demand. Having completed the outlook, we'll point to 1 more element, which is likely to have quite an impact on 2025 results. Borregaard has a currency hedging strategy that delays the impact of changes in currency rates. Using currency rates, so the 30th of April, the net currency impact for the full year of 2025 was estimated to be positive by NOK 125 million compared with 2024. And the corresponding impact for the first quarter of 2025 was estimated to be positive by about NOK 40 million compared with the first quarter of 2024.

We continue to see a strengthening of the Norwegian kroner so far in the second quarter, especially compared with the U.S. dollar. If yesterday's rates continue the rest of the month, we will see a slightly little lower net currency impact in the second quarter, closer to NOK 35 million compared with the NOK 40 million based on the calculation from the 30th of April. If today's or if yesterday's rates continue for the rest of the year, the net currency impact will be more in the range of NOK 100 million positive compared with NOK 125 million based on the calculation from the 30th of April.

But then today, the Central Bank of Norway quite surprisingly lowered the interest rates in Norway by 0.25% and we've seen a slight weakening of the NOK after day -- after that. So just as we speak, the currency impact might be a little bit more positive in the numbers that I gave based on yesterday's currency rates. We got a set of questions on currency during the webcast in April. This was can you please help us understand what is behind the reported net currency impact in 2025, estimated to be approximately plus NOK 125 million compared with 2024. What part of this estimate comes from the financial gain from hedges? What part of this estimate is due to operational aspects such as lower Norwegian sales prices of exports?

To the two first questions, we responded that the net currency effect come mainly from 2 elements. It's the change in hedging losses, and it's the currency rate movements. So that's really what explains at least 95% of the change from what we reported after the fourth quarter. So at the end of the fourth quarter, we reported an impact for 2025 of NOK 220 million, after the first quarter reported a net positive impact of NOK 125 million. And the main reason is the strengthening of the Norwegian kroner. This is a way to explain, everything else equal, the impact from currencies.

Pricing, which was the third question is totally separate from this. When we go through the business areas in our quarterly presentations, we talk about sales price development in sales currency, excluding both the hedging effects and sales currency movements compared with the Norwegian kroner. In general, we do from time to time, try to help analysts and investors to better understand how we calculate the net currency impact. To use the first quarter as an example, we calculate the net currency impact to be positive by NOK 45 million compared with the first quarter of 2024. Hedging losses in the first quarter was NOK 95 million compared with a loss of NOK 89 million in the first quarter of '24.

The change was negative by NOK 6 million, which means that the impact from currency rates were NOK 45 million plus NOK 6 million, NOK 51 million, and then you arrive at the net currency impact. And approximation for the calculation of currency risk could be to use the U.S. dollar and euro exposure from last year in the footnote on the currency slide that we show every quarter, divided by 4 to get the quarterly exposure and then multiply the quarterly exposure by the change in average currency rates for the 2 quarters you compare.

Timing differences for hedging the actual hedge sales and exposure in other currencies than the U.S. dollar and the euro, will explain differences compared with the proposed calculation. But over time, we see that just focusing on U.S. dollar and euro and using last year's exposure have been a quite good approximation for the actual number as we calculate. If you think this reasoning was difficult to follow, and I can fully understand that, we will be more than happy to set up a teams meeting to show you how we do this calculation given the information we share in our quarterly presentation. I will now hand over to Knut-Harald, who will lead the Q&A session with questions asked in the chat function on this webcast.

Thank you, Per Bjarne. We will now open the floor to questions from our listeners. And as Per Bjarne said, please use the chat function to submit your questions, and we will address them where possible and as time permits.

There seems to be no questions. And it must mean to garner that everything is crystal clear. Thank you for attending and until next time, goodbye.

Thank you.