Lenzing AG swung back to a profit in the first quarter, reporting net income of 24 million euros ($28.3 million, roughly) after logging losses across the previous three quarters of 2025. Revenue fell year over year as volatile market conditions continued to pressure the Austrian textile giant, the company said in a May 7 statement. 

The wood-based fiber producer reported first-quarter revenue of 615.7 million euros—the American equivalent of $726.53 million, down 10.8 percent year over year, as lower fiber sales volumes, softer pricing and weaker pulp prices weighed on results. EBITDA totaled $137.2 million, compared to $184.2 million in the prior-year period, while free cash flow more than doubled to $39.88 million from $17.46 million a year earlier.

Lenzing said the quarter’s performance was supported by its ongoing pricing strategy, cost-cutting measures and working capital management, alongside positive one-off effects tied to the sale of surplus EU emissions allowances and its majority acquisition of Swedish next-generation fiber company TreeToTextile AB, inked in February.

Lenzing said it intentionally scaled back output on less profitable production lines during the quarter as part of a broader push toward higher-margin business. At the same time, raw material, energy and logistics costs remained high, though the company said some of that pressure was offset by internal cost-saving measures.

“During the first quarter of 2026, we further stabilized our operational development and returned to a positive net result after economically challenging previous quarters,” CFO Mathias Breuer said in a statement. “The significant improvement in free cash flow is particularly encouraging and demonstrates that our measures are taking effect.”

Lenzing said it continues to advance a broader transformation strategy aimed at improving profitability and resilience through cost reductions, operational efficiencies and tighter working capital control. The company said its performance program generated more than $236 million in savings during fiscal 2025.

For background, Lenzing’s $28.32 million net profit is still lower—by 24.3 percent, for what it’s worth—than the $37.41 million earned in the first quarter of the previous year.

Still, the company warned that geopolitical tensions, volatile energy prices and broader macroeconomic uncertainty continue to cloud the outlook. Lenzing said ongoing conflicts in the Middle East are expected to further pressure energy and raw material costs beginning in the second quarter, adding that it is unable to provide a reliable forecast for the full 2026 financial year.