Rayonier AM Q4 2022 Earnings Report
Key Takeaways
Rayonier Advanced Materials reported net sales of $500 million for the fourth quarter, up 34 percent from the prior year quarter. Income from continuing operations for the quarter was $4 million, up 114 percent from the prior year quarter. Adjusted EBITDA from continuing operations for the quarter was $55 million, up 104 percent from the prior year quarter.
Net sales for the fourth quarter of $500 million, up $126 million, or 34 percent, from prior year quarter
Income from continuing operations for the fourth quarter of $4 million, up $32 million, or 114 percent, from prior year quarter.
Adjusted EBITDA from continuing operations for the fourth quarter of $55 million, up $28 million, or 104 percent, from prior year quarter.
2023 Adjusted EBITDA guidance of $200 million to $215 million expected to drive $30 million to $60 million of Adjusted Free Cash Flow
Rayonier AM
Rayonier AM
Rayonier AM Revenue by Segment
Forward Guidance
Overall, income (loss) from continuing operations is expected to be between $(8) million and $12 million, with Adjusted EBITDA between $200 million and $215 million for 2023. The Company expects to spend approximately $110 million of custodial capital expenditures, including $15 million to $20 million of catch-up maintenance capital, and discretionary strategic capital expenditures of approximately $30 million to $35 million, net of financing. Strategic capital may be modulated as necessary to support Adjusted Free Cash Flow. Overall, the Company expects to generate $30 million to $60 million of Adjusted Free Cash Flow in 2023.
Positive Outlook
- Paperboard prices for 2023 are expected to continue to increase from 2022 levels, driven by strong demand in both the packaging and commercial printing end markets.
- Sales volumes are expected to increase slightly, driven by improved logistics, while raw material prices reduce as pulp markets decline.
- The reopening of the Chinese economy may provide catalyst for more stable pricing.
- Sales volumes are expected to improve slightly in 2023, primarily due to improved productivity and logistics.
- Average sales prices for cellulose specialties in 2023 are expected to be high single-digit percent higher than average 2022 sales prices.
Challenges Ahead
- Commodity sales prices are expected to decline versus 2022 levels, in line with industry forecasts for fluff and viscose cellulose pricing.
- Fluff market demand remains resilient but at lower prices than fourth quarter levels.
- Viscose markets started the year soft
- Raw material prices are expected to remain elevated, offset by benefits expected from prior strategic capital investments.
- High-yield pulp markets have declined as global economic demand slows, impacting sales price.
Revenue & Expenses
Visualization of income flow from segment revenue to net income