Borregaard, John Holmes, Sean Gillen, Per A. Sørlie, and I am Vice President Finance in Borregaard. I'm joined today by our CFO, Per Bjarne Lyngstad, and we are live from the biorefinery in Norway. Here is the agenda for today's call. First, we'll look at the outlook from the latest quarterly report from the Q3 report, a reiterated for that. Secondly, currency and commodities inputs. Then last, we'll have a Q&A session. Regarding the Q&A session, feel free to start typing your questions in the chat functions. Now I will hand over to Per Bjarne, who will then reiterate the key points from the outlook given in our third quarterly report.
Thank you, Veronica, and good afternoon, everyone. I will start with reiterating the key points from the outlook for Q4, and when relevant, refer to comments given in the Q&A session at the webcast for the third quarter on the 22nd of October this year. I will start with BioSolutions. In BioSolutions, we expect the sales volume in the fourth quarter to be between 70,000 and 75,000 tons, which is below the 77,000 tons we had in the fourth quarter last year. We continue to expect a positive but limited effect from the anti-dumping duties on vanillin. We got three questions regarding BioSolutions at the webcast after the third quarter. The first question was related to margin development and the decline year- on- year despite the foreign exchange tailwind. What should we expect going forward?
Our response was that Borregaard offers a very broad portfolio, especially in agriculture, where we have around 200 different products sold to 1,000 different customers. Within this broad portfolio, there will be big mixed differences from quarter- to- quarter, explaining variations in margins. In general, we think we have quite high margins in BioSolutions, and they have been well above 25% over quite a long period. Then I'm talking about EBITDA margin. This year, we are hurt a little bit by a weaker dollar. However, margins in the first nine months of 2025 have been more than two percentage points above the same period last year. The second question was related to average sales price development in BioSolutions. With increasing agri sales, why is the average sales price in sales currency flat year- on- year? And the product mix stated to be in line with last year?
Would higher Ag Chem sales imply a more favorable product mix? Again, our response was to repeat that we think that that's related to mix within agri, where we have a very broad portfolio with products going into both industrial applications and specialties. And AgC hem, which was mentioned in the question, it goes mainly into specialties. So it will depend on which applications during the quarter take more volume and which take less. The last question was, what do we expect in terms of mix in BioSolutions on the agri side in the fourth quarter? In general, we are positive to the development we're seeing in agri. Q3 was the seventh consecutive quarter that we reported growth in agri, and we are very positive about the long-term picture for agri and that our portfolio fits very well with the needs of the market.
Then turning to the outlook for BioMaterials, where the sales volume in the fourth quarter was expected to be in the range of 35,000-38,000 tons, with a higher share of highly specialized grades compared with the fourth quarter last year. The average sales price in the fourth quarter should remain largely in line with the third quarter. At the webcast in October, there were no questions related to BioMaterials outlook for volume and prices. As to the wood cost, which mainly affects Specialty Cellulose, we expected to be slightly lower in the fourth quarter than in the fourth quarter last year. We got several questions regarding the wood cost. The first one was if we had a change in wood cost guidance compared with what we said after the second quarter. And our answer was not really.
As to the price reduction on wood, that's the same as after the second quarter. But we had a negative mix effect between chips and roundwood in the third quarter, and we had a higher than normal inventory of wood and at all higher prices at the beginning of the third quarter. The fourth quarter should be better than the third quarter and also better than the fourth quarter last year. And on a follow-up question, we estimated additional wood cost in the third quarter compared to the third quarter last year to be in the range of NOK 10-NOK 15 million . In the fourth quarter, our estimate was that the wood cost would be closer to NOK 10 million , lower compared with the third quarter and also compared with the fourth quarter last year.
The last question was if the wood cost will continue to be a cost tailwind in 2026. Our comment was that the negotiations for 2026 were about to start and would go on until the end of the year. However, what we've seen in Sweden and also in Norway has been sawmills closing down for at least a period, putting pressure on wood prices for 2026. Also related to Specialty Cellulose, we got a question about the anti-dumping allegations in the U.S. and if we could provide some color on as to potential costs we expect to realize in connection with this case. We commented that U.S. lawyers and experts are quite expensive and that we for sure will have a cost impact going forward in this case. It will be some millions in costs, probably more than NOK 10 million over the period the case is going on.
Then moving on to the outlook for Fine Chemicals, where sales prices for bioethanol continue to be significantly lower than last year. The product mix for Fine Chemical intermediates in the fourth quarter is expected to be weaker than in the third quarter. Then to the outlook and to the development in other important cost components, where we expect energy consumptions, both energy prices and energy-related raw material prices, to increase seasonally in the fourth quarter compared to the third quarter. As to energy cost, remember that energy consumption is normally lower in the summer season and higher during the winter. About 15% of Borregaard's energy consumption is dependent on energy spot prices for electricity and LNG. For LNG, we have a one-month delay compared with the market price. Electricity prices in Norway so far in the fourth quarter have on average been significantly above last year's prices.
But LNG prices have been quite a bit lower than last year, taking the one-month delay into consideration. In total, spot prices on energy will not have much of an impact on Borregaard's energy cost in the fourth quarter compared with the fourth quarter last year. We got a question regarding cost development, where we were asked if we could provide further color on cost-based developments and if we expect any changes to these dynamics in the fourth quarter and beyond. This year, we have had quite significant cost inflation in line with what we have seen in Norway as a total and also in many other countries. In addition, we have had some further increases in costs due to, for instance, that we are upgrading our facility in Wisconsin in the U.S. It's both an upgrade and an expansion.
We have also increased our sales force a little bit. We have had some additional costs in addition to the general inflation. We've also seen that the cost of buying equipment to the plant in Norway has increased more than the general inflation, both for equipment for maintenance and for investments. This means that we have had cost increases above inflation so far this year. Whether that will continue is difficult to say. Our aim is to keep our cost increases at or below the general inflation to have productivity gains also on the fixed cost side. It's a bit early to see how this will develop going forward. Finally, we got two questions regarding capital expenditure. The first was regarding our NOK 1 billion CapEx guidance for 2025, where we have spent just NOK 542 million in the first nine months.
The question was whether we expect NOK 450 million of CapEx in the fourth quarter. And if not, is it actually lower CapEx or just phasing? And our response was that normally we put a lot of equipment in during the maintenance stop in October. And we've always had a much higher CapEx number in the fourth quarter than in the three other quarters of the year. Whether it will reach NOK 400+ million in the fourth quarter is a bit early to tell because we may see that some expenditure may end up in 2026 instead of 2025. However, we think total CapEx will be close to the NOK 1 billion we have in the forecast.
In the second question on CapEx, we were asked to confirm that the second phase of Sarpsborg debottlenecking was already included in the CapEx guidance shared at the 2024 Capital Markets Day for the year 2026, something we confirmed. At the end of the outlook presentation, we reminded you that the annual maintenance stop at the Sarpsborg site in October will affect production volumes in the fourth quarter as it did in the fourth quarter last year. Finally, a reminder about the uncertainty in the global economy, particularly related to tariffs, war, and conflicts, which may impact Borregaard's markets and costs. Having completed the outlook and the questions from the third quarter presentation, we will point to one more element which will have an impact on the fourth quarter results. Borregaard has a currency hedging strategy that delays the impact of changes in currency rates.
Using rates as of the 21st of October, the net currency impact for the fourth quarter was estimated to be positive by about 5 million NOK compared with the fourth quarter of 2024. So far in the fourth quarter, the Norwegian kroner has been quite stable compared with the third quarter using Borregaard's currency basket. However, compared with the fourth quarter last year, the Norwegian kroner has strengthened by about 5%, mainly due to a weaker dollar. If the present currency rates continue the rest of the month, we will see an equal or marginally higher net currency impact in the fourth quarter compared with the 5 million NOK based on the calculation from 21st of October. I will now hand over to Veronica, who will lead a Q&A session with questions asked in the chat function of this webcast.
Thank you, Per Bjarne. We will now open the floor to questions from our listeners. Please use the chat functions to submit your questions, and we will address them where possible and as time permits. During Per Bjarne's reiteration of the outlook, we have received a couple of questions already. The first one is from Ryan Buckley from Copeland Capital. Can you please outline your views on the advanced bioethanol market for 2026 and what impacts the country-level implementations of RED III, the Renewable Energy Directive III, will be on demand? Any comments on the regulatory backdrop in Germany or France would also be appreciated.
Again, we will come back to the topic during our fourth quarter presentation on the 4th of February. However, I can add that we saw a significant increase of supply of advanced bioethanol in Europe towards the end of 2024, and we don't see any major change in the supply situation as we move into 2026. There are some investigations going on regarding questionable certifications for some suppliers, but the overall picture is that supply has increased permanently, as is the intention of incentives within the EU and some other European countries.
As to the RED III directive, we don't see that having much of an impact for 2026. As I said, the incentives are there to stimulate increased supply of bioethanol or biofuel, and that's what's happening. The main countries for bioethanol into gasoline are France, Germany, Switzerland, maybe some other countries, but those are the main countries. We don't expect anything to change really on the regulation side in 2026.
Thank you. There are two questions from Elliott Jones from Danske Bank. The first one, can you please provide an update on the anti-dumping filings and any costs related to this to be seen in the P&L for the fourth quarter and beyond?
I think the main update is that we have provided a lot of information for the Department of Commerce in their investigation of the case. But of course, the department has also been affected by the budget shutdown in the U.S. So the preliminary ruling from them is now more expected to be in the second quarter, maybe May, June, and not in the first quarter as initially said. I think that's the main news on this project. It goes on and conclusions are a bit postponed.
As to the cost, I said during the Q3 presentation that it will probably be about NOK 10 million , and it will be. It will probably be close to NOK 10 million also already for this year since we have spent a lot of resources now on really the filing and providing the necessary information.
Thank you. The next one from Elliott Jones. Can you provide some color on the developments seen around wood costs, and have there been any, and have they come down as you expected?
Again, I think we will have to wait and see what we say during our Q4 presentation in February. We don't want to disclose any final numbers today, but there's no doubt that prices have come down. We saw a third round in Sweden and also a further price reduction of SEK 45 in December.
They had one previous reduction during the second half. So prices are coming down quite significantly. How much we will come back to.
Thank you. There are currently no other questions, but we'll hold on a few seconds to see if there are more coming in due to the delay on the webcast. I guess that seems to conclude the Q&A session. And thank you for participating in today's pre-close call. We appreciate your interest in Borregaard. Oh, hold on a second. No, there was nothing from Andreas. Thank you for your interest in Borregaard. This webcast will be published on Borregaard's website until the next pre-close call in March of next year. And as a reminder, this call marks the start of our silent period during which contact with the investment community will be reduced to a minimum.
We look forward to our next update and wish you all a great day ahead and happy holidays. Thank you and goodbye.
Goodbye.