Report
Luis de Toledo Heras

Ence : Forced diversification will require time before it bears fruit

We are downgrading our rating on Ence after sharply lowering our estimates on continued pulp price weakness, our more cautious view on future price trends and disappointing H1 2025 results (-43% y-o-y). Ence’s diversification strategy in advanced pulp/fluff grades and biomethane/renewable industrial heating could take time to rekindle the group’s earnings power while its cash flow profile is likely to remain under pressure in the medium term, justifying our Underperform rating and new TP of € 2.7 (vs € 3.8).
Underlying
ENCE Energia y Celulosa SA

Ence Energia Y Celulosa is engaged in the manufacture and commercialization of wood pulp and derivatives. Co. divides its activities into the following two business lines: Forest Division: Co. manages timberlands in South America and the Iberian Peninsula. Co. is involved in trading of wood, and supplies solid wood products including: plywood, sawn timber, parquet flooring and glued-edge paneling. Co. is involved in forest and environmental consulting. Pulp Division and Energy Production: Co. is engaged in the production of Eucalyptus globulus-based TCF and ECF paper pulp. Co. is also involved in the generation of electricity through biomass power producing plants.

Provider
Oddo BHF
Oddo BHF

​Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.

Analysts
Luis de Toledo Heras

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