Stonegate Capital Partners has updated its coverage on Aquafil S.p.A (BIT: ECNL), following the company's second-quarter 2026 results. Despite a sharp increase in raw material and transportation costs during the quarter, Aquafil's performance continued to support the margin and deleveraging reset that has been underway. Revenue declined 1.0% year-over-year to €135.7 million, with volumes broadly stable, while EBITDA fell 2.5% to €20.7 million. The EBITDA margin held steady at 15.3%, compared to 15.5% in the same period last year.
The modest decline in EBITDA is attributed to a timing mismatch between higher input costs and contractual price recovery, rather than a reversal in underlying cost performance. Management indicated that the majority of the Q2 cost increase is being recovered through Q3 pricing, with additional recovery expected in the fourth quarter. This suggests that the company's lower fixed cost base and operating efficiencies are supporting margins even before a broader demand recovery takes hold.
Balance sheet progress remains a meaningful part of the investment thesis. For the first half of 2026, net financial position (NFP) improved to €196.9 million from €209.5 million at the end of 2025. NFP to LTM EBITDA improved to 2.64x from 2.89x, reflecting continued deleveraging. Management continues to prioritize reducing debt, and further progress could eventually reopen capacity for higher capital expenditure or external growth opportunities.
The main remaining execution requirement for 2026 is now volume growth rather than margin recovery. First-grade volumes increased only 0.3% in the first half of the year, compared to management's approximate 5% full-year objective. This implies a meaningful acceleration is required in the second half, even as management reaffirms its annual goals and identifies Europe as the principal area of demand uncertainty.
Overall, the quarter reinforces that Aquafil's operational improvements are delivering resilience in a challenging environment. The company's ability to maintain margins despite cost pressures, combined with a stronger balance sheet, positions it well for future growth when demand recovers. Investors and stakeholders can access the full announcement, including downloadable images and bios, by clicking here.
