Rayonier AM Q1 2023 Earnings Report
Key Takeaways
Rayonier Advanced Materials Inc. reported net income of $2 million for the quarter ended April 1, 2023, a significant improvement compared to the net loss of $25 million in the prior year quarter. The company's net sales increased by 33 percent to $467 million, and adjusted EBITDA from continuing operations rose by 155 percent to $51 million. RYAM reaffirmed its 2023 Adjusted EBITDA guidance and increased its Adjusted Free Cash Flow guidance.
Net sales increased by 33 percent year-over-year to $467 million.
Income from continuing operations improved by 108 percent year-over-year to $2 million.
Adjusted EBITDA from continuing operations increased by 155 percent year-over-year to $51 million.
The company reaffirmed its 2023 Adjusted EBITDA guidance of $200 million to $215 million and increased its Adjusted Free Cash Flow guidance to $40 million to $65 million.
Rayonier AM
Rayonier AM
Rayonier AM Revenue by Segment
Forward Guidance
RYAM expects income (loss) from continuing operations to be between $(8) million and $12 million, with Adjusted EBITDA between $200 million and $215 million for 2023. The Company expects to generate $40 million to $65 million of Adjusted Free Cash Flow in 2023.
Positive Outlook
- Average sales prices for cellulose specialties in 2023 are expected to be high single digit percent higher than average 2022 sales prices.
- Commodity sales volumes are expected to increase as production and logistics constraints improve.
- Additional benefits from prior strategic capital investments are expected throughout the year.
- Paperboard prices are expected to moderate slightly over the balance of the year but remain elevated from 2022 levels, while sales volumes are expected to remain steady.
- Sales volumes for high-yield pulp are expected to improve slightly in 2023, primarily due to improved logistics and production reliability.
Challenges Ahead
- Strength in acetate and certain other cellulose specialty end markets is offsetting softness in construction and food-related end markets.
- Market demand for commodity products remains resilient but at lower prices than first quarter levels.
- Fluff sales prices are expected to decline versus 2022 levels, in line with industry forecasts.
- High-yield pulp markets have declined as global economic demand slows and new capacity ramps up, impacting sales price.
- The Company experienced a slower than anticipated return to production after the annual maintenance outage of its Tartas facility, which has been completed but is expected to impact the second quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income