Financial Results Orbia Reports Second Quarter 2026 Performance
Orbia Advance Corporation, S.A.B. de C.V. reported strong financial performance for the second quarter of 2026, delivering significant growth in revenue and profitability despite ongoing global economic uncertainty and geopolitical challenges. The company attributed its improved results to disciplined operational execution, strategic pricing initiatives, cost optimization efforts, and resilient demand across its diversified portfolio of businesses.
During the quarter, Orbia generated net revenues of $2.352 billion, representing a 20% increase compared with the same period in 2025. Earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 56% year over year to $467 million, while operating cash flow improved to $62 million, highlighting the company’s ability to generate stronger earnings even amid higher raw material costs and volatile market conditions.
Strategic Execution Drives Growth
According to Orbia Chief Executive Officer Sameer Bharadwaj, the company’s multi-year strategy focusing on operational excellence, commercial discipline, capital allocation, and cash generation continued to deliver positive results.
He noted that Orbia successfully responded to rapidly changing market conditions by adjusting pricing in key business segments, particularly Polymer Solutions, while protecting margins across downstream operations despite rising input costs linked to geopolitical disruptions.
Bharadwaj also emphasized that Fluor & Energy Materials and Connectivity Solutions remained standout performers during the quarter, benefiting from favorable market fundamentals, growing infrastructure investments, and increasing demand from telecommunications networks, AI data centers, and power grid modernization projects.
He added that the company’s broad portfolio positions Orbia to capitalize on improving global market conditions while continuing to strengthen profitability, improve its balance sheet, and reduce leverage.
Revenue Growth Across All Business Groups
Unlike previous periods where growth was concentrated in selected operations, Orbia recorded higher revenues across all five business groups during the second quarter.
Net revenue increased to $2.352 billion, supported by:
- Stronger product pricing
- Higher sales volumes
- Increased demand in infrastructure markets
- Commercial initiatives to offset rising costs
- Improved market conditions in several regions
Cost of goods sold reached $1.698 billion, an increase of 11% from the previous year. The higher costs primarily reflected larger production volumes, particularly within Polymer Solutions and Connectivity Solutions, together with rising raw material prices and unfavorable currency movements.
However, the company managed to offset part of these increases through operational efficiencies and ongoing cost-saving initiatives.
Improved Operating Profitability
Selling, general and administrative (SG&A) expenses totaled $350 million, increasing 19% year over year due to higher personnel expenses, professional service costs, and currency impacts.
Despite the increase in absolute expenses, SG&A represented 14.9% of sales, improving slightly from the previous year as stronger revenue growth enhanced operating leverage.
The most significant financial improvement came from EBITDA, which rose 56% to $467 million, lifting the EBITDA margin to 19.9%, an increase of 463 basis points.
Several factors contributed to this improvement, including:
- Higher PVC resin prices
- Better product mix
- Commercial pricing actions
- Recovery in agricultural markets
- Strong demand in telecommunications infrastructure
- Continued strength in fluorine-based products
Higher Financial Costs Offset Some Gains
Although operating performance strengthened considerably, Orbia recorded higher financial expenses during the quarter.
Financial costs increased to $145 million, compared with $96 million a year earlier. The increase was largely driven by foreign exchange losses associated with the appreciation of the euro.
Income tax expense declined to $117 million, compared with $143 million in the prior-year quarter.
The reported effective tax rate reached 73%, largely due to currency effects involving the Mexican peso, inflation-related accounting adjustments, and valuation allowance changes. Excluding these one-time factors, management indicated that the effective tax rate would have been approximately 30%.
As a result, net income attributable to majority shareholders improved significantly, reaching $15 million, compared with a net loss of $126 million during the same quarter in 2025.
Cash Flow and Balance Sheet Continue to Improve
Operating cash flow increased by $15 million to $62 million, mainly due to stronger EBITDA.
Free cash flow remained negative at $73 million, although this represented a $9 million improvement compared with the previous year.
The temporary pressure on cash flow resulted primarily from seasonal working capital requirements, which were amplified by higher selling prices and increased raw material costs following geopolitical disruptions in the Middle East.
Orbia ended the quarter with:
- Total debt of $4.994 billion
- Cash and cash equivalents of $900 million
- Net debt of $4.094 billion
Importantly, the company’s leverage continued to improve.
Net debt-to-EBITDA declined from 3.64x in the previous quarter to 3.28x, supported by higher trailing twelve-month EBITDA.
Using management’s adjusted EBITDA calculations, leverage improved further to 3.24x, reflecting continued progress toward strengthening the balance sheet.
Polymer Solutions Posts Exceptional Results
The Polymer Solutions business, which includes Vestolit and Alphagary, generated $773 million in revenue, increasing 25% from the prior year.
EBITDA surged 82% to $144 million, while EBITDA margin expanded to 18.6%.
Performance benefited from:
- Higher PVC resin pricing
- Strong derivatives demand
- Recovery from prior operational disruptions
- Competitive U.S. Gulf Coast feedstock advantages
These gains were partially offset by higher European energy costs and currency fluctuations.
Building & Infrastructure Continues Strong Recovery
The Building & Infrastructure business, operating under the Wavin brand, reported revenue of $725 million, representing a 15% increase year over year.
EBITDA climbed 79% to $113 million, while EBITDA margin improved to 15.7%.
Growth reflected:
- Commercial pricing initiatives
- Higher Latin American sales volumes
- Favorable currency movements
- Increased adoption of value-added products
- Ongoing cost reduction programs
The business also benefited from timing advantages between raw material purchases and later increases in input costs following the Middle East conflict.
Fluor & Energy Materials Delivers High Margins
Fluor & Energy Materials remained one of Orbia’s strongest performers.
Quarterly revenue increased 33% to $329 million, while EBITDA rose 58% to $114 million.
The business generated an impressive EBITDA margin of 34.7%, driven by strong demand for refrigerants, medical propellants, and other high-value fluorine products.
Although sulfur and logistics costs increased during the quarter, favorable product mix and commercial execution more than compensated for these pressures.
Precision Agriculture Benefits from Global Demand
Netafim, Orbia’s Precision Agriculture business, generated revenue of $325 million, an increase of 13%.
EBITDA improved 19% to $47 million, while EBITDA margin reached 14.5%.
Growth was driven by stronger performance in:
- United States
- Turkey
- Peru
- Australia
- Middle East
- Africa
Higher project activity and pricing discipline offset weaker demand in India and adverse foreign exchange movements.
The business continued expanding adoption of advanced irrigation technologies that help farmers improve productivity while reducing water and fertilizer consumption.
Connectivity Solutions Expands with Digital Infrastructure
Connectivity Solutions, marketed under the Dura-Line brand, delivered another strong quarter as digital infrastructure investments accelerated.
Revenue increased 30% to $319 million, while EBITDA rose 33% to $54 million.
Demand remained particularly strong across:
- Fiber optic network deployment
- AI data center construction
- U.S. electric grid modernization
- Telecommunications infrastructure
The business also benefited from favorable product mix improvements and disciplined pricing designed to offset higher material costs.
Capital Allocation Remains Disciplined
Orbia continued maintaining a conservative financial strategy during the quarter.
Working capital increased by $185 million, reflecting seasonal inventory requirements, stronger business activity, and elevated selling prices caused by geopolitical disruptions.
Management noted that such seasonal increases typically reverse during the second half of the year.
Capital expenditures totaled $100 million, slightly above the prior year, with investments focused on maintenance projects and long-term strategic growth initiatives.
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