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Sep 30, 2023
Rayonier AM Q3 2023 Earnings Report
Rayonier AM's Q3 2023 performance was marked by a net loss, impacted by weak demand across product categories, while the company focused on cost reduction and strategic downtime, and updated its full-year Adjusted EBITDA and Free Cash Flow guidance.
Key Takeaways
Rayonier Advanced Materials Inc. reported a net loss of $25 million for the quarter ended September 30, 2023, compared to a net income of $30 million in the prior year quarter. The company is revising down its 2023 Adjusted EBITDA guidance to approximately $150 million but raising its free cash flow guidance to $65 to $75 million.
Loss from continuing operations for Q3 was $27 million, a decrease of $45 million year-over-year.
Adjusted EBITDA from continuing operations for Q3 was $24 million.
Year-to-date cash provided by operating activities totaled $82 million, with total debt at $749 million.
The company updated its 2023 Adjusted EBITDA guidance to approximately $150 million and raised its 2023 Adjusted Free Cash Flow guidance to $65 million to $75 million.
Revenue by Segment
Forward Guidance
Rayonier Advanced Materials anticipates a loss from continuing operations of approximately $45 million for 2023, with an Adjusted EBITDA of approximately $150 million. The company expects to spend approximately $85 million on custodial capital expenditures and approximately $35 million on discretionary strategic capital expenditures, net of financing. Overall, the Company expects to generate $65 to $75 million of Adjusted Free Cash Flow in 2023.
Positive Outlook
- Market demand for commodity products remains resilient with fluff and viscose prices bottoming in the third quarter and a slight uptick expected in the fourth quarter.
- Commodity sales volumes are expected to continue to increase through the end of 2023.
- Paperboard prices are expected to rebound slightly in the fourth quarter, remaining elevated from 2022 levels, while sales volumes are expected to improve in the second half of the year as customer inventories return to more normal levels.
- The Company is targeting $85 to $95 million of benefit from working capital to support Adjusted Free Cash Flow for the year.
- The Company’s 2G bioethanol facility at its Tartas, France plant is near completion and is anticipated to be operational in the first quarter of 2024.
Challenges Ahead
Revenue & Expenses
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Avg. Return Before/After Earnings
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