Rayonier Advanced Materials reports Q4 EPS (25c), consensus (19c)

Reports Q4 revenue $422M, consensus $418.5M. “2024 marked a transformative chapter in our journey at RYAM, with the achievement of several strategic milestones that will position us well for the future,” stated De Lyle Bloomquist, CEO of RYAM. “We continued to strengthen our core High Purity Cellulose business and reduced our exposure to commodity markets. We made significant strides towards executing on our biomaterials strategy, and we improved our balance sheet while delivering outstanding financial results. “Looking forward to 2025, we expect to build upon last year’s achievements by continuing to prioritize value over volume for our core cellulose specialties products, advancing our biomaterials strategy and realizing production efficiencies from strategic capital investments. We have negotiated a mid single-digit price increase for our cellulose specialties business for 2025 without losing market share, though our sales volumes will be lower due to accelerated shipments in 2024 resulting from the indefinite suspension of the Temiscaming HPC operations. We expect to achieve $10 million in production efficiencies in 2025, driven by $15 million in strategic capital investments and other continuous improvement initiatives. Additionally, we intend to invest in several biomaterials projects that are expected to meet our investment hurdle of a minimum of 30 percent ROE and less than two-year payback period for RYAM equity. While we foresee headwinds to our Paperboard business due to new supply and certain one-time benefits in 2024, we still expect to generate Adjusted EBITDA of $215 to $235 million in the coming year, which includes our estimate of the impact of the 25 percent tariff on U.S. sales of paperboard. However, this guidance remains subject to the potential for additional tariffs across our business segments.”