Mercer (MERC) Q2 Revenue Falls 9%

Core Insights - Mercer International reported a wider net loss and a year-over-year decline in both earnings and revenue for Q2 2025, with GAAP EPS at $(1.29) and revenue at $453.5 million, below estimates of $476.7 million [1][2] - The company suspended its regular dividend to preserve cash amid worsening profitability and uncertain market recovery [1][9] Financial Performance - Q2 2025 GAAP EPS was $(1.29), a decline of 27.7% from Q2 2024's $(0.96) [2] - Revenue for Q2 2025 was $453.5 million, down 9.2% from $499.4 million in Q2 2024 [2] - Operating EBITDA turned negative at $(20.9) million, a significant drop from a gain of $30.4 million in the previous year, indicating serious cost and pricing pressures [2][5] Segment Performance - Pulp segment revenue fell approximately 10% year-over-year to $332.3 million, with NBSK pulp prices declining 7% to $758 per air-dry metric ton [2][6] - Solid Wood segment revenue decreased by 10%, with a notable 65% drop in revenue from mass timber products due to reduced project activity [2][7] Strategic Focus - The company focuses on producing Northern Bleached Softwood Kraft (NBSK) pulp and solid wood products, with a strategy centered on cost-efficient manufacturing and sustainability [3][4] - Mercer holds a monopoly as Germany's only NBSK producer and is investing in products linked to global carbon-reduction trends [4] Challenges and Outlook - The company faces challenges from currency movements, high input costs, and weak demand in key markets, particularly China [8][12] - Management did not provide formal financial guidance but indicated that softwood pulp prices are likely to decrease, while lumber prices may rise [11]