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Sep 30, 2023
Sylvamo Q3 2023 Earnings Report
Sylvamo's Q3 2023 earnings exceeded expectations, driven by cost reduction measures and efficient cash flow management.
Key Takeaways
Sylvamo reported a strong third quarter with earnings exceeding expectations. The company focused on maximizing free cash flow through cost reductions, working capital management, and adjusting capital spending. They are projecting free cash flow for the year to be more than $270 million and have returned $110 million to shareowners this year.
Net income from continuing operations increased to $58 million ($1.37 per diluted share) from $49 million ($1.14 per diluted share) in the previous quarter.
Adjusted EBITDA rose to $158 million (18% margin) compared to $124 million (14% margin) in the second quarter.
Cash from operations increased to $197 million from $77 million in the previous quarter.
Free cash flow increased to $155 million from $33 million in the prior 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 anticipates adjusted EBITDA to be between $90 million and $110 million in the fourth quarter.
Positive Outlook
- Volume is projected to improve by $20 million to $25 million, with seasonally stronger volume in Latin America and positive trends in North America.
- The company is focused on maximizing free cash flow.
- The company is streamlining organization and cost structures.
- The board of directors increased regular dividend by 20%, declaring a fourth quarter $0.30 per share dividend and a special $0.30 per share dividend.
- The board also authorized an incremental $150 million share repurchase program.
Challenges Ahead
- Price and mix are expected to decrease by $20 million to $25 million, primarily reflecting prior paper price decreases in Europe and unfavorable geographic mix in Latin America and North America.
- Operations and other costs are expected to increase by $25 million to $30 million due primarily to seasonally higher costs in Europe and North America.
- Input and transportation costs are projected to increase by $5 million to $10 million, mainly due to seasonally higher energy.
- Total planned maintenance outage expenses are expected to increase by $25 million.
- Lower paper prices in Europe and on exports from Latin America, as well as lower global pulp prices
Revenue & Expenses
Visualization of income flow from segment revenue to net income