Sylvamo Corporation ( (SLVM) ) has released its Q3 earnings. Here is a breakdown of the information Sylvamo Corporation presented to its investors.
Sylvamo Corporation is a global leader in the paper industry, transforming renewable resources into paper products used for education, communication, and entertainment, with operations across Europe, Latin America, and North America. The company’s recent earnings report for the third quarter of 2024 highlights a strong financial performance, surpassing previous outlooks with significant free cash flow generation.
During the third quarter of 2024, Sylvamo reported a net income of $95 million, an increase from $83 million in the previous quarter, and an adjusted operating earnings of $102 million. The adjusted EBITDA stood at $193 million, reflecting a 20% margin improvement. The company generated $119 million in free cash flow, nearly doubling the previous quarter’s figure. The earnings were bolstered by higher shipment volumes in North America, lower maintenance outage expenses, and stable input costs, despite a slight decrease in price and mix predominantly in North America.
Strategically, Sylvamo announced the termination of a supply agreement with International Paper, aiming to streamline operations and enhance efficiencies in the North American region. The company continues to focus on optimizing its business through strategic investments and a cost reduction program, Project Horizon, which is on track to exceed its savings target by the end of 2024. The company also declared a $0.45 per share dividend, reflecting its commitment to returning value to shareholders.
Looking ahead, Sylvamo anticipates a challenging fourth quarter with an expected adjusted EBITDA between $150 million to $165 million. The company foresees unfavorable price and mix impacts due to price decreases in Europe and an altered customer mix in North America, alongside increased operational costs due to planned maintenance. Nevertheless, Sylvamo remains confident in its ability to drive earnings growth through strategic initiatives and investments.
