Half-Year review january-June 2025
President & CEO Mika Mahlberg’s comments
We see new, tangible opportunities in the market related to the long-term outsourcing trend.
In the second quarter of 2025, the market situation remained challenging. As expected, our comparable revenue for the quarter was below the level of the comparison period and amounted to EUR 88.4 million (92.0). However, our comparable order intake increased by approximately 7 per cent compared with the second quarter of last year and by 6 per cent from the first quarter of this year.
Operational profitability declined from the comparison period. Our comparable EBITDA, excluding items affecting comparability, was EUR 4.7 million (7.1), representing 5.3 (7.7) per cent of revenue. The result was significantly burdened by the ongoing ramp-up measures at the Gliwice unit in Poland, the costs of which will continue to impact profitability during the remainder of the year. The turnaround process at the Breitenau, Austria business unit, which is progressing as planned, also continued to affect the result.
Although comparable revenue and EBITDA remained below the level of the comparison period, the gap was smaller than in the first quarter of the year, and we take a cautiously positive view of the remainder of the year. We are increasing production capacity at several plants to meet customer demand. Sales development is encouraging, and we see new, tangible opportunities in the market related to the long-term outsourcing trend. Fortaco is committed to delivering the highest quality, reliability of supply and flexibility in its industry, thereby supporting its customers’ profitable growth across different market cycles. We believe these factors will become increasingly important as volumes return to growth.
Fortaco’s performance improvement programme, Fortaco 25, had a positive impact on second-quarter profitability and partly offset the cost effects of the ramp-up operations in Gliwice. The programme is progressing according to plan, and we are pleased with the positive impacts it has delivered on both result and cash flow. We will continue to focus on improving the profitability of our core business and strengthening our cash flow.
Positive market signals, but US tariff policy creates uncertainty
Despite the positive signs observed in some of Fortaco’s customer segments, the market does not yet show signs of broad-based recovery, although conditions in the mining and defence equipment industries remain favourable. United States trade policy continues to create significant uncertainty and reduces the predictability of market developments. At present, US tariffs have no material direct impact on Fortaco’s business, as both direct and indirect exports to the United States are limited and the business is primarily focused on Europe.
We are well positioned to implement our strategy and grow together with our customers when market conditions improve.
Our balance sheet strengthened significantly
Our balance sheet and liquidity strengthened significantly in May, when the company’s principal shareholder made an equity investment of EUR 20 million in the company, and amendments were made to the terms and conditions of our bond to strengthen cash flow. As a result of these measures, we are well positioned to implement our strategy and grow together with our customers when market conditions improve.
In June, we sold our Serbian subsidiary and the business unit located in Gruza, which focused on the marine and energy industries, to the Norwegian Entec Evotec AS. The sale of the Gruza business unit was the final step in the strategic review of the company’s marine, energy and heavy project businesses, which has now been completed. The sale of the subsidiary will have no material impact on Fortaco’s revenue or profit this year.
Developing our climate targets and sustainability reporting
In the first half of 2025, we advanced key elements of our sustainability agenda. A project was launched to define science-based climate targets and outline our transition plans. We also explored ways to improve product-level emission calculations and identified further opportunities to decarbonise our Scope 1–3 emissions.
We follow closely the development of EU regulations and the Omnibus proposal. We have gathered stakeholder feedback, benchmarking data, and insights to develop our reporting and processes further. We also integrated material sustainability topics more deeply into our business processes, reinforcing our commitment to long-term value creation and climate resilience.
Fortaco’s personnel have done excellent work to improve our profitability and to meet the needs of our customers, and I would like to thank all Fortaco employees for their strong commitment. I also wish to thank our partners for their smooth cooperation, as well as our customers and principal shareholder for their continued trust.
