The Navigator Company recorded revenue of €1.33 billion in the first nine months of 2026, down 10.5% year-on-year, as lower production availability, operational disruptions and higher costs affected performance. EBITDA declined 29.3% to €212.2 million, while net profit fell 44.8% to €65.4 million.

In the third quarter, revenue reached €464.7 million, down 1.2% year-on-year but up more than 5% compared with the previous quarter. EBITDA amounted to €68.9 million, while net profit was €16.2 million.

The Portuguese group said its performance during the first nine months reflected a challenging operating environment, including weather-related disruptions in the first quarter, a cyberattack, seven power-grid disturbances and extended maintenance shutdowns at its Setúbal, Aveiro and Figueira da Foz mills.

These events, together with the execution of several investment projects, reduced production availability. Inventory levels were already low following strong sales in late 2025, further limiting the company's ability to respond to customer demand. Despite maintaining order books above the industry average, Navigator was unable to fully meet demand.

Operational conditions improved as the third quarter progressed, supporting a sequential recovery compared with both Q2 and Q1. However, the earlier production constraints continued to weigh on the company's nine-month performance.

Operational recovery expected in Q4

During the earnings call on 27 October, CEO António Redondo said operating conditions were normalizing following the completion of several major investment and maintenance projects.

Navigator expects production and sales volumes to improve in the fourth quarter, supported by more stable operations and the absence of significant planned maintenance shutdowns. Management also anticipates lower production costs as the recently commissioned equipment and decarbonization projects become fully operational.

The company highlighted the impact of the start-up and ramp-up of several projects, including a rebuilt paper machine, lime kilns converted to biomass-based fuels, an oxygen delignification plant and a major boiler overhaul.

Redondo said the group expected a better performance in Q4, although inventories remained at very low levels, leaving the company with limited capacity to absorb any further unexpected production disruptions.

Tissue: UK restructuring and new capacity in Portugal

Navigator's tissue business continued to face competitive pressure and lower volumes. Tissue sales totaled approximately 160,000 tonnes in the first nine months, including finished products and parent reels.

The company is continuing to restructure its UK tissue operations, with the transformation program now in its most demanding implementation phase. The program remains on track for completion by the end of the first half of 2027, with implementation progressing without disruption to customer service.

The strategy includes improving the integration of the UK business with production in Portugal. A new tissue machine with an annual capacity of 70,000 tonnes is being built in Aveiro, with start-up expected in the second quarter of 2028. The investment is intended to supply the UK operation and improve its structural profitability.

Navigator also reported that 79% of its tissue volumes were sold outside Portugal in the first nine months, compared with 54% in 2022, reflecting the growing international reach of the business.

The group is also developing its product offering through innovation and licensing agreements, including an agreement with Procter & Gamble covering Iberia, France and the UK.

Packaging business expands

Packaging continued to record strong growth, with sales volumes increasing 44% year-on-year to 91,000 tonnes in the first nine months of 2026.

The business attracted 50 new customers placing their first orders during the period. Packaging accounted for 6% of group sales, while Navigator continued to expand its offering across flexible packaging, bags, industrial, medical and e-commerce applications.

Prices reached their highest level since June 2023 in September, increasing 17% compared with the average for December 2025 and 6% quarter-on-quarter.

The company also reported positive developments in its bags business, which accounted for 11% of group sales during the first nine months.

The conversion of the PM3 machine at Setúbal to produce low-grammage kraft packaging paper was completed during the third quarter. The machine is expected to have an annual production capacity of 90,000 to 100,000 tonnes.

Navigator said Tissue and Packaging together now represent approximately 30% of group turnover and around one-third of EBITDA, highlighting the increasing contribution of these businesses to its diversification strategy.

Pricing and market conditions

Navigator said pricing improved across several product categories during the period, helping to offset part of the pressure from higher production costs.

In printing and writing paper, the company has implemented three European price increases, the latest in June. Management said pricing momentum was strengthening across the industry, supported by healthy order books and higher production costs.

In tissue, the company reported that average selling prices in the UK during Q3 were more than 2.2% higher than in Q2. However, pricing developments varied by region, with a slightly negative evolution in Iberia offsetting the improvement in the UK.

During the earnings call, management also highlighted continued pressure on tissue demand from consumer downtrading and competition. The company said it was prioritizing margins and price discipline rather than pursuing volumes through aggressive price reductions.

Investment program and financial position

Capital expenditure reached €173.9 million in the first nine months, compared with €159.6 million in the same period of 2025. Approximately 48% of investment was allocated to sustainability and ESG-related projects.

Free cash flow remained positive at €18.6 million, while net debt stood at €765 million at the end of September, €61 million higher than at the end of 2025. The net debt-to-EBITDA ratio was 2.66 times.

During the earnings call, Redondo said the group's investment program had reached its peak during the 2022–2026 period, with average annual capital expenditure of approximately €190–200 million.

Navigator expects to return to an average annual CapEx level of around €100 million over the next five years. However, expenditure will remain above that level in 2027 and 2028, reflecting the ongoing UK tissue restructuring and construction of the new Aveiro tissue machine.

The company said a lower investment level would also preserve financial flexibility for potential acquisitions, particularly in tissue.

Navigator's decarbonization investments are expected to reduce Scope 1 and 2 emissions by 54% by 2027 compared with 2018, equivalent to approximately 415,000 tonnes of CO₂. The company also expects natural gas consumption to be nearly 50% lower than in 2018.

Looking ahead, management said the normalization of operations, improving pricing conditions and growing contributions from Tissue and Packaging should support performance in the coming quarters.