Analyst Group Comment on Borgestad’s Q2-26 Report
Borgestad ASA (“Borgestad”, “the Group” or “the Company”) published on August 14, 2026, the Company's quarterly report for the second quarter of 2026. The quarter was characterized by a marked profitability improvement, where the full effect of the 2025 cost program and ongoing internal improvement initiatives within Höganäs Borgestad met a broadly stable top line, lifting the Group’s earnings well above both the adjusted level last year and our estimates.
The following are some key financial metrics that we have chosen to highlight in connection with the report:
- Revenue of NOK 310.3m (316.2) in Q2-26, corresponding to a YoY decrease of approximately 1.8%, around 2% below our estimate of NOK 315.9m
- EBITDA of NOK 51.9m (adj. 36.9), corresponding to an EBITDA margin of 16.7% (adj. 11.7%), clearly above our estimate of NOK 34.7m
- Refractory EBIT of NOK 36.8m (adj. 22.1), corresponding to an EBIT margin of 12.7% (adj. 7.5%), the strongest second-quarter margin in the Company’s disclosed history back to 2021
- Order backlog of NOK 296.4m as of June 30, 2026, an increase of 12.6% YoY, reversing the 7.8% YoY decline as of Q1-26
- Occupancy at Agora Bytom of 97.4% based on signed leases, the highest level to date, while rental income decreased by 5.3% YoY to NOK 19.9m amid ongoing tenant transitions
- Net interest-bearing debt of NOK 374.6m (391.6), corresponding to NIBD/EBITDA LTM of 3.0x (3.4x), after total capital returns of NOK 24.5m in H1-26
Summary
Borgestad delivered a Q2-26 report that, in our view, provides a clear quantitative confirmation of the operating leverage at the core of our investment thesis, namely that a largely fixed service cost base allows profitability to recover faster than volumes. Revenue of NOK 310.3m came in marginally below our estimate of NOK 315.9m, while the Group’s EBITDA and EBIT results of NOK 51.9m and NOK 42.4m, respectively, clearly exceeded both our estimates of NOK 34.7m and NOK 27.0m and the adjusted levels of NOK 36.9m and NOK 27.8m reported in Q2-25. The beat is attributable to Höganäs Borgestad, where the cost measures implemented in 2025, with an estimated full-year effect of approximately NOK 10m, reached full effect and were complemented by ongoing improvement initiatives, resulting in a refractory EBIT margin of 12.7% against adjusted 7.5% in the comparable quarter. Given that Q1-26 marked both the seasonal and the cyclical trough, the Q2 outcome illustrates how strongly earnings respond once activity stabilizes on a lower cost base.
The report also strengthens the forward-looking demand picture. The order backlog of NOK 296.4m was up 12.6% YoY, a reversal from the 7.8% YoY decline as of Q1-26, and the Company points to early signs of improving activity following an extended period in which customers limited maintenance to business-critical requirements. As we have previously emphasized, the order backlog does not necessarily correlate closely with revenue in any individual quarter, but should rather be viewed as an indicator, and on that basis the upwards swing supports our assumption of a stabilization year in 2026 followed by further recovery in 2027 driven by pent-up maintenance demand.
In the Real Estate segment, rental income declined temporarily during a quarter of active tenant transition, while record occupancy of 97.4%, an expanded leasable area and new tenants opening during H2-26 build the base for the rental growth embedded in our forecast, with full effect from 2027.
The Group’s EBITDA of NOK 48.6m in H1-26 came in approximately NOK 17m above our forecast for the period, and with the profitability momentum now entering the seasonally decisive third quarter, which has historically accounted for approximately 31% of annual refractory revenue, Analyst Group sees potential for upward revisions of our full-year 2026 estimates, which we intend to revisit in connection with our updated equity research report.
Read Analyst Group’s comment on the report here
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This is a press release from Analyst Group regarding the publication of a comment on Borgestad. Readers may assume that Analyst Group has received compensation for making the comment. The Company has not been given an opportunity to influence the parts where Analyst Group has had opinions about the Company, future valuation or anything else that could be considered a subjective assessment.