Stonegate Capital Partners has updated its coverage on Aquafil S.p.A (BIT: ECNL) following the company's second-quarter 2026 results, which continued to support the margin and deleveraging reset despite a sharp increase in raw material and transportation costs during the quarter.
Aquafil reported revenue of €135.7 million, a decline of 1.0% year-over-year, with volumes broadly stable. EBITDA decreased 2.5% to €20.7 million, but the EBITDA margin held at 15.3% versus 15.5% in the same period last year. The modest decline in EBITDA reflects 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.
For the first half of 2026, net financial position (NFP) improved to €196.9 million from €209.5 million at year-end 2025. This improvement is a key part of the investment thesis, as NFP/LTM EBITDA improved to 2.64x from 2.89x. Management continues to prioritize deleveraging, and further progress could eventually reopen capacity for higher capital expenditures or external growth.
The quarter reinforces that Aquafil's lower fixed cost base and operating efficiencies are supporting margins even before a broader demand recovery. The company's ability to maintain its margin profile despite significant input cost increases highlights its operational resilience. Management noted that the normal pricing lag is approximately three months, with key North American customers incorporating higher raw-material pricing beginning in August and additional recovery expected into the fourth quarter.
One of the main remaining execution requirements for 2026 is volume growth rather than margin recovery. First-grade volumes increased only 0.3% in the first half, compared to management's approximate 5% full-year objective. This implies a meaningful acceleration in the second half is required, even as management reaffirms its annual goals and identifies Europe as the principal area of demand uncertainty.
Aquafil's results are important because they demonstrate that the company can maintain profitability and reduce debt even in a challenging cost environment. The margin stability and balance-sheet improvement provide a solid foundation for future growth, and the company's ability to recover cost increases through pricing underscores its market position. As the company looks toward 2027, the improved balance sheet offers additional flexibility.
For more details, the full announcement can be viewed at [Stonegate Capital Partners](https://www.stonegateinc.com).
