Orbia: quarterly profit returns to black, but shares still trade at 58% discount to fair value

On July 22, Orbia reported Q2 2026 results: revenue grew 20% to $2,352 million, EBITDA rose 56% to $467 million, and net profit reached $15 million versus a loss a year earlier. Given the strong report, the shares look attractive: on the portal's model, the upside to fair value is 58%.

Key takeaways

— Revenue grew 20% driven by growth across all business groups

— EBITDA rose 56% on strong resin prices and robust results in Fluor & Energy Materials

— Net profit returned to positive after four quarters of losses

— Operating cash flow improved but remains weak due to working capital build

— Leverage declined to 3.28x, but absolute debt increased

— Company raised 2026 EBITDA guidance to at least $1,200 million

Attractiveness

Key figures, USD bn

Revenue grew 20% driven by growth across all business groups

In Q2 2026, Orbia's revenue reached $2,352 million, up 20% from $1,967 million in the same period last year. Growth was recorded across all five business groups.

The largest contributions came from Polymer Solutions (+25%, to $773 million) and Connectivity Solutions (+30%, to $319 million). Polymer Solutions benefited from higher resin prices amid the Middle East conflict, while Connectivity Solutions saw strong demand for telecom infrastructure and AI data centers.

Regionally, sales grew in all regions except Asia (-3%). North America rose 32%, Europe 16%, and South America 14%.

EBITDA rose 56% on strong resin prices and robust results in Fluor & Energy Materials

EBITDA in Q2 2026 reached $467 million versus $300 million a year earlier, with margin expanding from 15.2% to 19.9%. Key drivers were Polymer Solutions, where EBITDA rose 82% to $144 million, and Fluor & Energy Materials, where EBITDA grew 58% to $114 million with a 34.7% margin.

Polymer Solutions benefited from higher resin prices and margin expansion thanks to predominantly low feedstock costs in the US. Fluor & Energy Materials saw strong commercial performance and a favorable product mix.

The company notes that Q2 effects may not persist in H2 and expects 2026 EBITDA of at least $1,200 million.

Net profit returned to positive after four quarters of losses

Net profit attributable to shareholders in Q2 2026 was $15 million versus a loss of $126 million a year earlier. This is the first positive quarter after four consecutive loss-making periods (from Q4 2024 to Q1 2026).

The improvement was driven by a 121% increase in operating profit to $304 million, partially offset by a 51% rise in financial expenses to $145 million due to exchange rate losses from the euro's appreciation.

The effective tax rate was 73% due to the Mexican peso's appreciation and inflationary adjustments; excluding these factors, the rate would have been around 30%.

Operating cash flow improved but remains weak due to working capital build

Operating cash flow in Q2 2026 was $62 million versus $47 million a year earlier. The increase was driven by higher EBITDA but partially offset by a working capital build of $185 million due to seasonal sales growth and higher raw material prices.

Free cash flow remained negative: minus $73 million versus minus $82 million a year earlier. Capital expenditures were $100 million, roughly in line with last year.

The company expects the seasonal working capital build to reverse in H2, which should support free cash flow generation.

Leverage declined to 3.28x, but absolute debt increased

Net debt at the end of Q2 2026 was $4,094 million, up $157 million from the previous quarter ($3,937 million – calculated). The increase was due to seasonal working capital needs.

Despite higher absolute debt, the net debt/EBITDA ratio declined from 3.64x to 3.28x thanks to a $168 million increase in LTM EBITDA. The company continues its deleveraging process.

Cash at period-end was $900 million, total debt – $4,994 million.

Company raised 2026 EBITDA guidance to at least $1,200 million

Orbia raised its 2026 EBITDA guidance to at least $1,200 million, based on strong Q2 results. The company acknowledges that favorable effects may not persist in H2.

Capital expenditures for 2026 are expected at approximately $400 million, focused on maintenance and select growth projects, mainly in Fluor & Energy Materials.

The effective tax rate, excluding special items, is expected in the range of 27–32%.

Valuation on the latest reported figures

Bottom line

The Q2 2026 report was strong: revenue and EBITDA grew at double-digit rates, net profit returned to positive, and the company raised its annual guidance. However, these results are largely driven by cyclical factors – high resin prices and favorable dynamics in Fluor & Energy Materials – which may not persist in H2. Operating cash flow remains weak, and free cash flow is negative, limiting the ability to reduce debt. Nevertheless, given the current valuation – a 58% discount to fair value on the portal's model – the shares look attractive, especially if the company confirms the sustainability of results.