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Jun 30, 2023
Sylvamo Q2 2023 Earnings Report
Sylvamo's Q2 2023 earnings met guidance, but slower demand recovery drove a revised annual outlook.
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
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 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