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Sep 28, 2024
Rayonier AM Q3 2024 Earnings Report
Rayonier AM's Q3 2024 financial performance improved with increased sales and adjusted EBITDA, but net loss persisted due to non-cash charges.
Key Takeaways
Rayonier Advanced Materials reported net sales of $401 million for Q3 2024, up from $369 million in the prior year quarter. Adjusted EBITDA increased to $51 million from $24 million year-over-year. However, the company experienced a net loss of $33 million, impacted by a $25 million non-cash asset impairment and $7 million in indefinite suspension charges. The company successfully refinanced its capital structure and reiterated its 2024 Adjusted EBITDA guidance while increasing its Free Cash Flow guidance.
Net sales increased to $401 million, up $32 million from the prior year quarter.
Adjusted EBITDA rose to $51 million, a $27 million increase from the prior year quarter.
Net loss was $33 million, which included a $25 million non-cash asset impairment and $7 million in indefinite suspension charges.
2024 Adjusted EBITDA guidance was reiterated at $205 million to $215 million, and Adjusted Free Cash Flow guidance was increased to $115 million to $125 million.
Rayonier AM
Rayonier AM
Rayonier AM Revenue by Segment
Revenue by Segment
Paperboard Revenue
CapyFin.comHigh-Yield Pulp Revenue
CapyFin.com Forward Guidance
RYAM expects to generate $205 million to $215 million of Adjusted EBITDA in 2024 with $115 million to $125 million of Adjusted Free Cash Flow, including passive asset sales but excluding any operating asset sales.
Positive Outlook
- Average sales prices for cellulose specialties in 2024 are expected to increase by a low single-digit percentage.
- Sales volumes for cellulose specialties are expected to increase compared to 2023.
- Pricing for all commodity HPC products is forecasted to soften slightly in Q4, with volumes seeing a modest increase sequentially.
- Costs are expected to be lower in 2024 driven by lower key input and logistics costs, improved productivity and the suspension of operations at the Temiscaming HPC plant.
- Looking forward to 2025, the Company announced price increases of up to 10 percent for its cellulose specialties products, as contracts allow, and expects higher margins for cellulose specialties in the coming year.
Challenges Ahead
- EBITDA in the fourth quarter of 2024 is expected to be lower than the third quarter of 2024 due to the anticipated net custodial site expenses at the Temiscaming site, Jesup fire repair costs and the impact of the fire on sales and costs.
- Paperboard prices are expected to decrease in the fourth quarter while sales volumes are expected to increase.
- Raw material prices are expected to increase compared to the third quarter for Paperboard.
- High-Yield Pulp prices are expected to decline in the fourth quarter.
- Overall, the Company expects to incur a loss in EBITDA from the High-Yield Pulp segment in the coming quarter due to the decline in sales prices.
Revenue & Expenses
Visualization of income flow from segment revenue to net income