Lassila & Tikanoja cuts 2026 profit outlook as waste volumes soften
Lassila & Tikanoja (L&T), the Helsinki-listed waste management and recycling group, has lowered its full-year profit guidance after a difficult first half in which adjusted earnings before interest, taxes and amortisation (EBITA) fell 37% year on year. The company now expects adjusted EBITA of EUR 33–38 million for 2026, down from a prior range of EUR 38–44 million, while keeping its net sales forecast unchanged at EUR 420–450 million.
For the six months to 30 June 2026, net sales rose 5.9% to EUR 211.1 million, supported by acquisitions in the pallet and hazardous-waste segments. Organic growth was a more modest 2.8%. Adjusted EBITA, however, fell to EUR 10.1 million from EUR 15.9 million in the comparable period, with the margin contracting to 4.8% from 8.0%. Three headwinds drove the squeeze: a roughly EUR 3 million increase in fuel costs linked to Middle East supply disruptions, higher gate fees at waste-to-energy plants, and increased amortisation from an enterprise resource planning system renewal completed last year.
Waste-to-energy gate fee pressure
The gate fee issue is structural as well as cyclical. Gate fees are the charges waste processors pay to deliver material to incineration facilities. In Finland, an oversupply of waste-to-energy capacity has pushed those fees higher, eroding margins for waste collectors. L&T's chief executive Eero Hautaniemi noted in the company's results statement that "over the longer term, the oversupply of waste incineration capacity in Finland is expected to create downward pressure on gate fees", a reversal that would benefit L&T's cost base but is not yet visible in the near-term numbers.
To stabilise profitability, L&T launched a cost-reduction programme in the second quarter, implementing price increases and concluding workforce negotiations that will result in up to 20 redundancies and temporary layoffs for up to 420 employees. Management said these actions, combined with a second-half skew in industrial maintenance shutdown contracts, should allow the company to match the prior year's H2 adjusted EBITA.
Market context and capital position
L&T operates across waste management and recycling, hazardous waste and remediation, and industrial services and water treatment. The hazardous waste and remediation segment was the standout performer, with net sales up 33% to EUR 38.2 million in H1, driven by a strong remediation project pipeline. This segment's resilience illustrates a broader dynamic in the Nordic waste sector: hazardous and contaminated-land work tends to be project-driven and less sensitive to short-term economic cycles than municipal or commercial waste collection.
The company listed on Nasdaq Helsinki on 2 January 2026 following a partial demerger from its former parent, completed on 31 December 2025. The demerger added one-off costs of EUR 5.9 million to cash outflows in the period, which contributed to net cash flow from operating activities after investments turning negative at EUR -2.7 million. Net interest-bearing liabilities stood at EUR 171.1 million at period end, representing 2.1 times trailing adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation). The equity ratio was 32.9%.
On the sustainability side, L&T reported a modest improvement in direct emissions, with combined Scope 1 and Scope 2 carbon output falling to 9,800 tonnes of CO2 equivalent from 9,900 tonnes in the same period of 2025. The company's recycling rate for managed material flows dipped to 58.2% from 61.7%, partly attributed to the ERP transition affecting data comparability. L&T has a net-zero target for 2045.
The near-term investor focus will fall on whether the efficiency programme and second-half maintenance contracts can deliver the implied H2 recovery, and on the trajectory of Finnish gate fees as waste-to-energy capacity dynamics play out. Chief executive Hautaniemi has signalled his intention to step down no later than 30 June 2027, adding a leadership transition to the operational agenda.