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Sep 25, 2021
Rayonier AM Q3 2021 Earnings Report
Rayonier AM's Q3 2021 performance was influenced by the sale of lumber and newsprint assets and strategic initiatives, resulting in a net loss despite higher HPC and HYP prices.
Key Takeaways
Rayonier Advanced Materials reported a net loss of $5 million for Q3 2021, compared to a net income of $29 million in the same quarter of the previous year. The company completed the sale of its lumber and newsprint assets for approximately $232 million and repaid $127 million of senior unsecured debt and $25 million of senior secured debt. Adjusted EBITDA from continuing operations was $35 million, up $3 million from the comparable quarter in 2020.
Completed sale of lumber and newsprint assets for approximately $232 million, resulting in an estimated gain of $6 million after tax.
Retired $127 million of senior unsecured debt and an additional $25 million of senior secured debt.
Expect significant price increases on the majority of cellulose specialties contracts in 2022.
Net loss from continuing operations was $13 million, $26 million unfavorable to the comparable period in 2020 due to income tax benefits recorded in the prior year.
Rayonier AM
Rayonier AM
Rayonier AM Revenue by Segment
Revenue by Segment
Paperboard Revenue
CapyFin.comHigh-Yield Pulp Revenue
CapyFin.com Forward Guidance
Rayonier AM is focused on driving price increases for cellulose specialties, lowering costs, improving reliability, driving returns on strategic investments, and funding attractive R&D and innovation initiatives to grow consolidated EBITDA margins significantly over the next three to five years.
Positive Outlook
- Significant price increases expected on the majority of cellulose specialties contracts in 2022.
- Strong demand for cellulose specialties volumes.
- Company well-positioned to offset inflationary pressures in 2022.
- Investments in reliability, strategic growth, and innovation are expected to drive significant incremental margins in the coming years.
- Tartas green energy project is fully operational and the Company anticipates realizing $10 million in annualized benefits from this investment.
Challenges Ahead
- Prices for commodity products are expected to moderate for the fourth quarter.
- Total segment volumes are expected to decline for the full year mainly due to logistics constraints.
- Logistic and shipping constraints may negatively impact sales volumes in the near term.
- Key costs remain difficult to predict, with prices for energy, wood, chemicals, and logistics costs expected to escalate further in the fourth quarter and into 2022.
- Pulp market prices have recently declined and lower realized prices are expected for the remainder of the year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income