Mercer International Posts Negative Q4 EBITDA as Gross Margin Evaporates
Mercer International posted Q4 2025 negative EBITDA and evaporated gross margin as input costs surged and selling prices fell, leaving operations unable to cover interest expenses. Management warns liquidity will last under one year as weak US/EU demand, Chinese overcapacity and rising log prices create further Q1 2026 supply pressures.
1. Q4 2025 Financial Performance
Mercer reported a negative EBITDA in Q4 2025 after input costs rose sharply and average selling prices declined, driving gross margin to near zero and failing to generate operating profit.
2. Liquidity and Cash Flow Constraints
EBITDA fell short of covering interest expenses, pushing operations toward cash losses. Available liquidity is projected to sustain less than twelve months of operations at current cash burn rates.
3. Industry Headwinds and Q1 Outlook
Weak demand in the US and EU, overcapacity in China and elevated log prices have intensified supply-side pressures. Management expects these trends to worsen in Q1 2026, delaying any margin recovery.