Sylvamo Q2 2023 Earnings Report
Key Takeaways
Sylvamo's second quarter earnings per share and adjusted EBITDA objectives were achieved despite challenging market conditions and planned maintenance outages. The company returned $41 million of cash to shareowners through dividends and share repurchases. The adjusted EBITDA projection for 2023 was revised to $560 million to $600 million, and the free cash flow projection was revised to $220 million to $250 million.
Net income from continuing operations was $49 million ($1.14 per diluted share).
Adjusted operating earnings (non-GAAP) were $49 million ($1.14 per diluted share).
Adjusted EBITDA (non-GAAP) was $124 million (13.5% margin).
Cash provided by operating activities from continuing operations was $77 million.
Sylvamo
Sylvamo
Sylvamo Revenue by Segment
Sylvamo Revenue by Geographic Location
Forward Guidance
Sylvamo projects adjusted EBITDA of $130 million to $150 million for the third quarter. The company now projects adjusted EBITDA of $560 million to $600 million and free cash flow of $220 million to $250 million for 2023.
Positive Outlook
- Volume is projected to improve by $15 million to $20 million, with seasonally stronger volume in Latin America and North America
- Input and transportation costs are projected to improve by $15 million to $20 million, with favorable trends in fiber and chemicals.
- Total planned maintenance outage expenses are expected to decrease by $54 million
- Sylvamo expects to reduce costs and working capital to maximize earnings and free cash flow in the second half of the year.
- The company will continue implementing its three-pronged strategy of commercial excellence, operational excellence and financial discipline.
Challenges Ahead
- Price and mix are expected to decrease by $60 million to $65 million.
- Operations and other costs are expected to increase by $5 million to $10 million, mainly due to unabsorbed fixed costs while matching paper production with Sylvamo customer demand.
- Lower paper demand and inventory channel corrections in Europe and North America.
- Updated views on pulp and paper price and mix.
- Higher unabsorbed fixed costs.
Revenue & Expenses
Visualization of income flow from segment revenue to net income