Segezha Group attributed the 4-fold drop in OIBDA to fuel shortages due to attacks on refineries

Segezha Group attributed the 4-fold drop in OIBDA to fuel shortages due to attacks on refineries

    Segezha Group has published its IFRS financial statements for the first half of 2026. Key financial indicators show a sharp deterioration: OIBDA decreased fourfold to 0.66 billion rubles, revenue fell by 15% to 37.98 billion rubles, and OIBDA margin decreased from 5.8% to 1.7%. The company's net loss in January–June amounted to 15.3 billion rubles, which is 6% less than in the same period last year (16.2 billion rubles). Reducing the loss is almost the only positive thing in the report.

Key financial indicators

Causes of the fall

    The company explains the fall by several factors at once.

1. Fuel shortage due to attacks on refineries

    Segezha's press release explicitly states:

"Fuel shortages due to a series of incidents at the largest refineries in the European part of Russia had a significant impact on the group's cost growth"

    Drone attacks on oil refineries have disrupted fuel supplies and increased prices for petroleum products. For a timber holding company that uses fuel for its own needs (machinery, logistics, energy generation), this resulted in a direct increase in costs.

    2. General market conditions

•     - Low construction activity in global markets.
•     - Oversupply with limited domestic demand.
•     - Reduction of export prices and supply volumes.

3. Technical problems at Segezha Central Bank

    The production of paper products was affected by the instability of the Segezha Pulp and Paper Mill equipment, which was caused by problems in the region's energy system. This led to downtime and additional costs.

The key factors putting pressure on Segezha Group's performance are:

Efficiency measures

    In these circumstances, Segezha continues to work on improving operational efficiency. The company implements a set of measures to:

•     - reducing the cost of production;
•     - optimization of logistics;
•     - redistribution of production load.

    The expected effect of these measures, according to management, will allow to maintain the profitability of the business regardless of fluctuations in the ruble exchange rate, the increase in the key rate and restrictions on subsidies.

Importance for the forestry industry

    Segezha Group's report is a signal for the entire Russian timber industry:

1. - The fuel factor is becoming critical. Fuel shortages due to attacks on refineries affect the cost of not only the oil industry, but also related sectors, including chemical processing plants. Rising prices for diesel fuel and gasoline increase the costs of logistics, machinery and energy supply.
2. - Domestic demand remains weak. The decline in construction activity in the country limits the possibilities for selling products on the domestic market.
3. - Export markets are shrinking. Low global construction activity and oversupply in global markets are putting pressure on prices and margins.
4. - Technical stability is a matter of survival. Problems with energy supply at the Segezha Central Processing Plant show that even large holdings are not immune from local technical failures, which can result in billions in losses.

The prospects

    Segezha Group expects the effect of optimization measures in the second half of the year. However, the risks remain:

•     - Fuel shortages may continue if attacks on refineries do not stop.
•     - Construction activity in the world is unlikely to recover quickly.
•     - The key interest rate remains high, which limits access to credit resources and increases the debt burden.

    The decrease in net loss (from 16.2 billion rubles to 15.3 billion rubles) gives cautious hope for stabilization, but achieving profit will require either an improvement in market conditions or a significant increase in operational efficiency.

Result

    Segezha Group ended the first half of 2026 with a fourfold drop in OIBDA to 0.66 billion rubles, revenue of 37.98 billion rubles (-15%) and a net loss of 15.3 billion rubles. The main reasons are fuel shortages due to attacks on refineries, weak market conditions and technical problems at the Segezha Central Processing Plant. The company is implementing cost reduction and logistics optimization measures, but in the context of a high key rate and subsidy restrictions, profitability recovery remains questionable. The Segezha report is another confirmation that the Russian LPC is going through one of the most difficult periods in recent years.

Tags: #Russia #forestry #Segezha_Group #finance_results #OIBDA #fuel shortage #refineries #market conditions #SEGEZHAL_SC