Sylvamo Q2 2024 Earnings Report
Key Takeaways
Sylvamo reported a net income of $83 million, or $1.98 per diluted share, and an adjusted EBITDA of $164 million. The company benefited from improved price and mix, volume increases in Latin America, and lower operating costs.
Net income reached $83 million ($1.98 per diluted share) compared to $43 million ($1.02 per diluted share) in the previous quarter.
Adjusted EBITDA totaled $164 million (18% margin) versus $118 million (13% margin) in the first quarter.
Cash from operating activities was $115 million, a significant increase from $27 million in the prior quarter.
Free cash flow improved to $62 million from $(33) million in the first quarter.
Sylvamo
Sylvamo
Sylvamo Revenue by Segment
Sylvamo Revenue by Geographic Location
Forward Guidance
Sylvamo anticipates an adjusted EBITDA between $170 million and $185 million for the third quarter of 2024.
Positive Outlook
- Volume is projected to increase by $10 million to $15 million, driven by Latin America and North America
- Total planned maintenance outage expenses are expected to decrease by $28 million
- Company refinanced long-term debt to extend debt maturity and take advantage of favorable financing market
- Board of directors declared a 50% dividend increase for the third quarter from $0.30 per share to $0.45 per share
- Company is on target to achieve run rate savings of $110 million by the end of 2024.
Challenges Ahead
- Price and mix are expected to be slightly unfavorable up to $5 million due to mix
- Operations and other costs are expected to increase by $10 million to $15 million due primarily to higher unabsorbed fixed costs from economic downtime
- Input and transportation costs are projected to increase by $5 million to $10 million due to fiber in Latin America and energy in North America
- Uncoated freesheet conditions improved in the first half of the year, with year-over-year demand down slightly in Latin America.
- Company continues to develop a pipeline of more than $200 million of high-return capital projects, which will allow company to grow earnings and cash flows as company reinvests in business in the coming years.
Revenue & Expenses
Visualization of income flow from segment revenue to net income