Higher selling prices are helping Homann Holzwerkstoffe recover from a first half marked by rising production costs and weak furniture orders. The improvement comes as the German panel producer prepares to suspend its newest factory, leaving a Lithuanian investment of more than \u20ac215 million without production for at least a year.<\/p>\n
In its November 4 update, Homann reported third-quarter revenue above the corresponding 2025 level, positive adjusted EBITDA and stronger operating cash flow. Management also pointed to some improvement in MDF\/HDF demand and a greater contribution from price increases introduced earlier in the year. No quarterly revenue or earnings figures were disclosed.<\/p>\n
The recovery has been sufficient to maintain the company\u2019s revised annual outlook. Homann continues to expect revenue broadly unchanged from approximately \u20ac383 million in 2025 and currency-adjusted EBITDA of \u20ac10\u201315 million. That earnings range remains substantially below the \u20ac38.2 million achieved last year; before the August downgrade, management had anticipated a moderate increase.<\/p>\n
Lithuanian losses expected to fall by \u20ac20 million<\/strong><\/p>\n Pagiriai remains central to the group\u2019s efforts to restore profitability. Homann expects its Lithuanian operations to generate an operating loss of approximately \u20ac23 million in 2026, falling to around \u20ac3 million in 2027 following the suspension. Preparations are proceeding according to the timetable announced in August, with the factory expected to enter its inactive phase by year-end.<\/p>\n The projected \u20ac20 million reduction would provide substantial relief. It would also leave a continuing cost attached to the Lithuanian investment, even with production suspended. On those forecasts, the initial improvement in Lithuania would come from limiting losses while waiting for conditions that can support a commercially viable restart.<\/p>\n The announced production break begins on January 1, 2027, and is intended to last between 12 and 21 months. At the longer end of that range, the interruption would extend into autumn 2028. Homanit Lietuva has tied the resumption of manufacturing to a sustained market recovery.<\/p>\n A major investment loses its route to growth<\/strong><\/p>\n Pagiriai was conceived as an expansion of Homann\u2019s European manufacturing base. With investment exceeding \u20ac215 million and planned annual capacity of up to 310,000 m\u00b3, it was the largest project in the company\u2019s history. As recently as May 2025, owner Fritz Homann had expected the factory to become profitable in 2027.<\/p>\n The group\u2019s interim report dates the start of production to May 8, 2025. The planned suspension therefore follows less than two years after manufacturing began. During the first six months of 2026, Pagiriai recorded negative adjusted EBITDA of \u20ac15.3 million and an after-tax loss of \u20ac22.8 million.<\/p>\n The employment consequences became more precise in September. According to BNS reporting published by Lithuanian broadcaster LRT, Homanit Lietuva notified the employment service of plans to dismiss 228 employees between October 4 and December 31. The company employed 242 people at the time of that report.<\/p>\n Management has retained the option of returning to production. In August, Homanit Lietuva chief executive Inga Urbonavi\u010di\u016bt\u0117 told BNS that a sale was not under consideration and that the furniture market would determine the timing of a restart.<\/p>\n For panel buyers, the suspension removes a source of potential additional supply. The factory\u2019s stated capacity nevertheless represents its intended production scale: it does not establish that 310,000 m\u00b3 of annual deliveries will disappear from the market.<\/p>\n The earnings problem extends beyond Pagiriai<\/strong><\/p>\n Homann\u2019s first-half accounts show how sharply profitability weakened despite relatively stable sales. Revenue reached \u20ac194.4 million, compared with \u20ac195 million a year earlier, while currency-adjusted EBITDA moved from a \u20ac22.1 million profit to a \u20ac1.4 million loss. The consolidated net loss widened to \u20ac29.4 million from \u20ac2.7 million.<\/p>\n Lithuania accounted for a large part of the deterioration, but removing its start-up losses still leaves a considerable decline. On that basis, first-half adjusted EBITDA fell from \u20ac26.6 million to \u20ac13.9 million, a reduction of almost 48%. Homann\u2019s established operations were therefore also generating much less earnings before the Lithuanian suspension was announced.<\/p>\n Material expenditure explains part of the pressure. It increased by \u20ac16.9 million to \u20ac123.4 million, absorbing 64.7% of total output against 54.3% a year earlier. The group attributed the increase to the operation of the Lithuanian factory and higher input costs. Sales volumes declined, while price increases helped support revenue.<\/p>\n Homann has linked higher chemical, wood, energy and transport costs to the Middle East conflict. Passing those increases through to customers became more effective from June, after much of the damage to first-half earnings had already occurred.<\/p>\n The commercial challenge is to preserve those price gains while rebuilding orders. Higher revenue generated through pricing can improve margins, but a durable recovery also requires enough production volume to spread factory costs across a larger quantity of saleable boards.<\/p>\n Cash recovery becomes a priority<\/strong><\/p>\n The first-half deterioration also reduced financial flexibility. Operating activities consumed \u20ac14.2 million of cash, compared with an \u20ac8.4 million inflow a year earlier. Homann postponed investment projects and replaced a \u20ac30 million short-term bridge facility with an amortising loan running until 2031.<\/p>\n By June 30, cash and unencumbered securities had fallen to \u20ac16.7 million from \u20ac61 million at the end of 2025. Undrawn credit facilities amounted to a further \u20ac17.8 million. These figures explain the importance of generating cash alongside the reported improvement in quarterly earnings.<\/p>\n Suspending Pagiriai should reduce the operating burden, but Homann still needs its remaining production base to fund the business while the Lithuanian investment is idle. The stronger quarterly performance provides some support for that process; the scale of the recovery will become clearer when detailed financial results are available.<\/p>\n Higher prices must support a lasting recovery<\/strong><\/p>\n Even before Lithuanian start-up losses, Homann\u2019s full-year outlook remains below its previous performance. The company forecasts adjusted EBITDA of \u20ac34\u201339 million on that basis for 2026, against \u20ac54 million in 2025. The shutdown therefore addresses one major source of losses within a business whose underlying earnings also require repair.<\/p>\n For 2027, the immediate task is to retain customers at prices that cover production costs, rebuild cash generation and keep the expense of the inactive factory under control. A later restart would require furniture orders strong enough to absorb additional output without sacrificing the margins Homann is now trying to recover.<\/p>\n Pagiriai\u2019s future consequently depends on more than a short improvement in demand. The investment needs sustained orders and sufficient utilisation to earn a return. Until those conditions emerge, Homann\u2019s recovery will rest on the performance of its operating factories and the reduction of losses at the site originally intended to drive its expansion.<\/p>","protected":false},"excerpt":{"rendered":" Higher selling prices are helping Homann Holzwerkstoffe recover from a first half marked by rising production costs and weak furniture orders. The improvement comes as the German panel producer prepares to suspend its newest factory, leaving a Lithuanian investment of … Continue reading