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Mar 31, 2023
Sylvamo Q1 2023 Earnings Report
Sylvamo's first quarter results were in line with guidance, with adjusted operating earnings per share up more than 85% compared to the first quarter of 2022.
Key Takeaways
Sylvamo's first quarter 2023 earnings showed a net income from continuing operations of $97 million, or $2.25 per diluted share, and an adjusted EBITDA of $208 million, representing a 22% margin. The company repurchased 80% of its outstanding notes, eliminating restrictive covenants and enabling increased cash returns to shareholders.
Adjusted EBITDA was $208 million, consistent with the outlook of $205 million to $215 million, achieving a 22% adjusted EBITDA margin.
The company maintained a strong balance sheet and repurchased 80% of its outstanding notes to eliminate restrictive covenants.
Net income from continuing operations was $97 million ($2.25 per diluted share) compared to $88 million ($1.99 per diluted share) in the previous quarter.
Adjusted operating earnings were $108 million ($2.51 per diluted share) compared to $87 million ($1.97 per diluted share) in the previous quarter.
Sylvamo
Sylvamo
Sylvamo Revenue by Segment
Sylvamo Revenue by Geographic Location
Revenue by Segment
Europe Revenue
CapyFin.comLatin America Revenue
CapyFin.comNorth America Revenue
CapyFin.comRevenue by Geographic Location
Europe Revenue
CapyFin.comLatin America Revenue
CapyFin.comNorth America Revenue
CapyFin.com Forward Guidance
Sylvamo projects 2023 adjusted EBITDA of $720 million to $770 million and free cash flow of $250 million to $280 million. Second quarter adjusted EBITDA is expected to be $115 million to $125 million.
Positive Outlook
- Seasonally stronger volume in Latin America is projected to improve volume by $10 million to $15 million compared to the first quarter.
- Input and transportation costs are projected to improve by $15 million to $20 million, with favorable trends in energy and chemicals compared to the first quarter.
- The integration of the new mill in Sweden is proceeding well and is expected to strengthen performance.
- Favorable trends in energy and chemical input costs are expected to improve financial performance.
- Channel inventory corrections are expected to continue, contributing to adjusted EBITDA.
Challenges Ahead
- Price and mix are expected to decrease by $45 million to $50 million compared to the first quarter, reflecting the realization of prior price decreases for pulp in all regions and paper in Europe as well as less favorable product mix.
- Operations and costs are expected to increase by $10 million to $15 million primarily due to unabsorbed fixed costs compared to the first quarter.
- Total planned maintenance outage expenses are expected to increase by $59 million compared to the first quarter, with two-thirds of 2023 planned maintenance outage costs scheduled for the second quarter.
- Pulp price decreases will impact adjusted EBITDA.
- Continued channel inventory corrections will impact adjusted EBITDA.
Revenue & Expenses
Visualization of income flow from segment revenue to net income