Sylvamo Reports Third Quarter 2024 Results

"We delivered strong earnings with a 20% adjusted EBITDA margin and outstanding free cash flow in the third quarter, driven by solid operational performance, good commercial execution and stable input costs." – Jean-Michel Ribiéras, Chairman and CEO of Sylvamo.

Nov. 12, 2024 - Sylvamo (NYSE: SLVM) today reported third quarter 2024 earnings.

Commercial and Operational Highlights - Third Quarter vs. Second Quarter

• Price and mix decreased by $4 million due to mix in North America
• Volume improved by $10 million due to higher shipments in North America
• Operations and other costs increased slightly by $1 million
• Planned maintenance outage expenses decreased by $28 million due to no major annual outages
• Input and transportation costs increased by $4 million, primarily driven by higher fiber costs in Latin America

CEO Comments

"We delivered strong earnings with a 20% adjusted EBITDA margin and outstanding free cash flow in the third quarter, driven by solid operational performance, good commercial execution and stable input costs," said Jean-Michel Ribiéras, Chairman and CEO of Sylvamo. "The quarter also had no planned maintenance outages.

"On Oct. 31, we announced we are mutually terminating a supply agreement for uncoated freesheet, bristols and specialty papers from International Paper's Georgetown, South Carolina, mill, effective Dec. 31, 2024. We will continue to optimize our North America region by leveraging strategic initiatives to simplify the business, unlock efficiencies and drive earnings growth.

"We have seen encouraging increases in industry demand across our regions and expect recent capacity reduction announcements to lead to more favorable supply and demand balance trends in 2025. We are confident in our strategy to grow earnings and cash flow by continuing to invest in high-return projects in our mills and processes.

"We continue to allocate capital to generate long-term shareowner value. So far this year, we repurchased $30 million of our shares and have $120 million remaining on our $150 million share repurchase authorization from September 2023. Our board of directors declared a $0.45 per share dividend in the fourth quarter, which we paid Oct. 17. As of today, we have distributed $62 million through four quarterly dividends in 2024. We are committed to return at least 40% of our free cash flow to shareowners this year through share repurchases and dividends.

"We are making good progress with Project Horizon, our structural cost reduction program to streamline overhead, manufacturing and supply chain costs. Before inflation, we are on target to exceed our $110 million run rate savings goal by up to $10 million by the end of 2024."

Operating profits in the third quarter of 2024:

Europe - $3 million compared with $8 million in the second quarter of 2024. Earnings were lower mostly due to higher unabsorbed costs from economic downtime and slightly unfavorable price and mix, which more than offset lower operating costs.

Latin America - $49 million compared with $37 million in the second quarter of 2024. Earnings were higher due to favorable price and mix, lower operating costs and lower planned maintenance outages which more than offset higher input costs.

North America - $98 million compared with $77 million in the second quarter of 2024. Earnings were higher due to higher volumes, lower planned maintenance outages and lower input costs which more than offset unfavorable mix and higher unabsorbed costs due to economic downtime.

Headquartered in Memphis, Tennessee, Sylvamo (NYSE: SLVM) is the world's paper company with mills in Europe, Latin America and North America. Sylvamo transforms renewable resources into papers that people depend on for education, communication and entertainment.

SOURCE: Sylvamo