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Mar 30, 2024
Rayonier AM Q1 2024 Earnings Report
Rayonier AM's Q1 2024 financial performance improved, driven by lower costs and increased demand for cellulose specialties, resulting in solid Adjusted EBITDA and increased free cash flow guidance.
Key Takeaways
Rayonier Advanced Materials Inc. (RYAM) reported improved first-quarter 2024 results, exceeding expectations with a solid $52 million in Adjusted EBITDA. The company's net loss was $2 million, and net sales reached $388 million. RYAM reaffirmed its 2024 Adjusted EBITDA guidance of $180 million to $200 million and increased its Adjusted Free Cash Flow guidance to $80 million to $100 million.
Net sales for the first quarter were $388 million, a decrease of $79 million compared to the prior year quarter.
The company reported a net loss of $2 million for the first quarter, which is a $4 million decrease from the prior year quarter.
Adjusted EBITDA for the first quarter was $52 million, an increase of $1 million compared to the prior year quarter.
The company increased 2024 Adjusted Free Cash Flow guidance to a range of $80 million to $100 million.
Rayonier AM
Rayonier AM
Rayonier AM Revenue by Segment
Revenue by Segment
Cellulose Specialties Revenue
CapyFin.comCellulose Commodities Revenue
CapyFin.comBiomaterials Revenue
CapyFin.comPaperboard Revenue
CapyFin.comHigh-Yield Pulp Revenue
CapyFin.com Forward Guidance
RYAM expects to generate between $180 million and $200 million of Adjusted EBITDA in 2024 and Adjusted Free Cash Flow between $80 million and $100 million.
Positive Outlook
- Average sales prices for cellulose specialties in 2024 are expected to increase by a low single-digit percentage as compared to average sales prices in 2023 as the Company prioritizes value over volume.
- Sales volumes for cellulose specialties are expected to be comparable to 2023 driven by increased volumes from the closure of a competitor’s plant and a modest increase in ethers sales, offset by a one-time favorable impact from a change in customer contract terms in the prior year quarter and customer destocking in the acetate markets.
- Demand for RYAM commodity products remains stable as prices are expected to be flat to 2023, despite a difficult comparison to the first quarter of 2023.
- Costs are expected to be lower in 2024 driven by lower key input and logistics costs, improved productivity and the indefinite suspension of operations at the Temiscaming High Purity Cellulose plant.
- The Company’s bioethanol facility in Tartas, France became operational in the first quarter of 2024 and is expected to deliver $3 million to $4 million of EBITDA in 2024, growing to $8 million to $10 million beginning in 2025.
Challenges Ahead
- Commodity sales volumes are expected to decline in 2024 as the Company suspends operations at its Temiscaming High Purity Cellulose plant for the second half of 2024.
- EBITDA is expected to decrease in the second quarter of 2024 compared to the first quarter of 2024 due to the annual planned maintenance outage at Jesup
- Paperboard prices in 2024 are expected to remain relatively stable compared to the first quarter of 2024
- Raw material prices are expected to increase as purchased pulp prices are forecast to increase from the first quarter 2024 levels.
- Corporate costs are expected to be flat or increase slightly in 2024 as the Company continues its ERP implementation.
Revenue & Expenses
Visualization of income flow from segment revenue to net income