Arauco has returned to profit, but the recovery is less straightforward than its nine-month earnings suggest. Selling prices improved in the third quarter, while asset disposals and favourable currency movements helped the financial result. The company\u2019s mills, however, are still operating in markets where stronger prices have not consistently brought stronger demand.<\/p>\n
The Chilean group reported net profit of US$99.5 million for January\u2013September 2026, against a US$10.3 million loss a year earlier. Revenue increased 2.5% to US$4.681 billion. Yet operating profit fell 18.3% to US$310.5 million, and adjusted EBITDA declined about 2.8% to US$985 million. Earnings have recovered faster than operating profitability.<\/p>\n
Three quarters, three different results<\/strong><\/p>\n The year began weakly. In the first quarter, Arauco generated revenue of US$1.483 billion, adjusted EBITDA of US$247 million and a net loss of US$49.4 million. Its EBITDA margin fell to 16.7%, compared with 21% in the preceding quarter. Both the wood-products and pulp businesses contributed to the deterioration.<\/p>\n The second quarter brought a sharp improvement. Revenue rose to US$1.599 billion, adjusted EBITDA reached US$420.4 million and net profit climbed to US$121.2 million. This was the strongest reported quarter of 2026 so far.<\/p>\n Third-quarter revenue remained close to US$1.6 billion, virtually unchanged sequentially and around 6% above the corresponding period of 2025. Net profit fell to US$27.7 million, although that still represented an improvement from the small loss recorded a year earlier.<\/p>\n GWMI calculations, subtracting first-half adjusted EBITDA from the rounded nine-month total, put third-quarter adjusted EBITDA at approximately US$318 million. That is about 24% below the second quarter but 13% above the third quarter of 2025. The corresponding margin was approximately 19.9%.<\/p>\n The sequence points to an improvement from the weak opening quarter. It does not establish a steady acceleration, particularly once the transactions behind the second-quarter peak are considered.<\/p>\n The asset sale behind the second-quarter peak<\/strong><\/p>\n Arauco\u2019s second-quarter adjusted EBITDA included US$123.9 million from a sale of standing eucalyptus forests in Chile. The transaction covered the forest crop rather than the underlying land.<\/p>\n Removing that contribution reduces second-quarter EBITDA to US$296.5 million and its margin to approximately 18.5%, compared with the reported 26.3%. This explains much of the apparent deterioration between the second and third quarters: the starting point included a substantial transaction gain.<\/p>\n The third quarter also benefited from an asset disposal. Parent company Empresas Copec identified the sale of Arauco\u2019s interest in Puerto Coronel among the contributions to the year\u2019s improved non-operating results. Neither quarter should therefore be treated as a clean measure of recurring manufacturing earnings.<\/p>\n Currency movements provided another substantial benefit. Over the nine months, foreign-exchange results moved from a US$90.7 million loss to a US$55.1 million gain. That US$145.8 million pre-tax swing helps explain how net earnings improved while operating profit declined.<\/p>\n Better prices, fewer shipments<\/strong><\/p>\n For the wood industry, the most useful information lies beneath the consolidated profit figure.<\/p>\n Empresas Copec reported that Arauco achieved higher third-quarter prices for pulp, panels and sawn timber, but lower sales volumes in those businesses partly offset the benefit. The same combination affected the comparison with the preceding quarter. Buyers were paying more, without purchasing more product.<\/p>\n There had been a genuine improvement in wood products earlier in the year. Segment revenue increased from US$708.7 million in the first quarter to US$817.5 million in the second, supported by a 16.3% rise in sales volumes. Wood-products adjusted EBITDA recovered from US$84.2 million to US$112.8 million. The third-quarter volume weakness makes it difficult to interpret that rebound as the beginning of a sustained demand recovery.<\/p>\n The picture also differs by product. Arauco reported that lumber sales suffered earlier in 2026 from disruption to Middle Eastern trade, followed by some recovery in recent months. Plywood sales remained lower over the nine-month period, while panels benefited from improving South American markets.<\/p>\n Pulp customers face their own constraints. In China, printing and writing paper remained weak, with excess supply and limited recovery in final demand. European paper demand was also subdued, while tissue producers faced high energy and transport costs and greater competition from Asian imports. These conditions limit customers\u2019 ability to absorb further pulp-price increases without pressure on their own margins.<\/p>\n Cash generation remains the harder test<\/strong><\/p>\n Operating cash flow fell to US$646 million in the first nine months, from US$992 million a year earlier\u2014a decline of approximately 35%.<\/p>\n Net investing outflows reached US$1.811 billion, largely associated with spending on property, plant and equipment as Sucuri\u00fa advances. The difference between operating inflows and investing outflows was therefore approximately US$1.165 billion, before financing activities.<\/p>\n Arauco reported net financing inflows of US$1.048 billion, including a US$200 million capital increase. The business is generating cash, but considerably less than its current investment programme requires.<\/p>\n That gap gives the quality of the earnings recovery practical importance. Asset sales can release funds and improve reported results, but the company ultimately needs its existing operations and new capacity to produce stronger, sustained cash returns.<\/p>\n More capacity is approaching<\/strong><\/p>\n Arauco\u2019s expansion extends beyond pulp.<\/p>\n At the end of September, its new MDF line in Zit\u00e1cuaro, Mexico, was 93% complete. The project will add 300,000 m\u00b3 of annual capacity, with the first panel expected in late January 2027. In Chile\u2019s \u00d1uble region, the new OSB line was 92% complete, with initial commodity-panel production expected between late November and early December.<\/p>\n Sucuri\u00fa remains the much larger undertaking. In its 6 November financing announcement, Arauco reported progress of 83%, with start-up expected in late 2027. The company also placed a hybrid sustainable bond worth approximately US$410 million. Alongside asset disposals, the recent capital increase and additional support committed by Empresas Copec, the financing provides resources for the remaining construction period.<\/p>\n For competing wood-product suppliers, the approaching MDF and OSB capacity deserves attention even while demand remains uneven. New production will need customers, and its commercial effect will depend on how quickly those markets absorb additional supply.<\/p>\n For Arauco, the next stage of recovery requires more than another profitable quarter. Higher prices need to survive without further erosion in shipment volumes, and improved margins need to reach operating cash flow. The company has made progress from the beginning of the year; its investment programme leaves little room for that progress to stall.<\/p>\n Arauco: quarterly performance<\/p>\n US$ million, except margins<\/p>\n GWMI<\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":" Arauco has returned to profit, but the recovery is less straightforward than its nine-month earnings suggest. Selling prices improved in the third quarter, while asset disposals and favourable currency movements helped the financial result. The company\u2019s mills, however, are still … Continue reading \n\n
\n \nQuarter<\/th>\n Revenue<\/th>\n Adjusted EBITDA<\/th>\n EBITDA margin<\/th>\n Net profit \/ loss<\/th>\n<\/tr>\n<\/thead>\n \n Q1 2025<\/td>\n 1,531.5<\/td>\n 348.3<\/td>\n 22.7%<\/td>\n \u221226.5<\/td>\n<\/tr>\n \n Q2 2025<\/td>\n 1,524.7<\/td>\n 383.1<\/td>\n 25.1%<\/td>\n 16.4<\/td>\n<\/tr>\n \n Q3 2025<\/td>\n 1,509.5<\/td>\n 281.4<\/td>\n 18.6%<\/td>\n \u22120.2<\/td>\n<\/tr>\n \n Q4 2025<\/td>\n 1,518.6<\/td>\n 318.6<\/td>\n 21.0%<\/td>\n 51.2<\/td>\n<\/tr>\n \n Q1 2026<\/td>\n 1,482.7<\/td>\n 247.0<\/td>\n 16.7%<\/td>\n \u221249.4<\/td>\n<\/tr>\n \n Q2 2026<\/td>\n 1,598.6<\/td>\n 420.4<\/td>\n 26.3%<\/td>\n 121.2<\/td>\n<\/tr>\n \n Q3 2026<\/td>\n 1,600<\/td>\n 318<\/td>\n 19.9%<\/td>\n 27.7<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n