Mercer International Inc. (MERC)

Mercer International Inc.'s stock price has declined significantly over the past six months. In Q3 2025, Mercer reported a net loss of $80.8 million and negative operating EBITDA of $28.1 million, influenced by pulp pricing and demand issues, leading to a stock drop. In Q2 2025, the company reported a net loss of $86.1 million on revenues of $453.5 million. Management announced a cost-saving initiative targeting $100 million in profitability improvement by the end of 2026. In April 2024, Mercer dissolved its joint venture in Cariboo Pulp and Paper, with West Fraser Timber Co. Ltd. taking full ownership.

The demand for Mercer International's products is tied to the forest products industry's cyclical nature. Pulp demand is influenced by global economic conditions, while lumber and mass timber demand is affected by the construction sector and interest rates. Green energy and chemicals provide diversification and stability. Mercer manages these fluctuations through product and geographic diversification.

Mercer International Inc. is a diversified global forest products company that transforms wood fiber into commodity products. It operates in the pulp and paper and wood products manufacturing industries. Mercer is a large producer of Northern Bleached Softwood Kraft (NBSK) pulp and Northern Bleached Hardwood Kraft (NBHK) pulp. Its products include dimensional lumber, mass timber (CLT and Glulam), pallets, pellets, and briquettes. The company also generates and sells surplus green energy and biochemicals.

Mercer International Inc. has an international presence with facilities across North America, Europe, and Australia. Its pulp mills are in Germany, the USA, and Canada. The solid wood segment operates in Germany and North America, including a mass timber facility in Conway, Arkansas, and a sawmill in Friesau, Germany. These locations provide market access and competitive manufacturing costs.

Mercer International has demonstrated a commitment to sustainability and has received positive recognition. The company improved its Sustainalytics ESG Risk Rating and was recognized for its leadership in the mass timber market with the 2024 SFI President's Award. Mercer launched a Lignin Center in Germany in 2023 and is involved in projects like the Walmart Home Office Campus in Arkansas. The company aims for 75% sustainable wood sourcing by 2030.

Mercer International Inc. has a widely held ownership structure, predominantly by institutional investors. Major institutional owners include Iat Reinsurance Co Ltd, Redwood Capital Management LLC, and Toronto Dominion Bank. The largest individual shareholder is Peter R. Kellogg, with other notable insiders including Harbinger Capital Partners Master Fund I Ltd and Jimmy S. H. Lee.