Sylvamo's 1Q 2022 net income was $26 million ($0.59 per diluted share) compared with $62 million ($1.41 per diluted share) in the 4Q 2021; 1Q 2022 net income includes the impact of a $68 million ($57 million, net of tax) impairment charge for its Russian operations as the Company evaluates options to exit the business. 1Q 2022 net sales increased to $977 million compared to $778 million in the 1Q 2021.
Adjusted EBITDA (non-GAAP) of $187 million (19.1% margin) compared with $170 million (17.5% margin) in the 4Q 2021.
Chairman and CEO Jean-Michel Ribiéras said:“We generated strong earnings and free cash flow. We expect we will continue that trend and achieve pre-pandemic earnings levels, even excluding our Russian business. We have the right team to continue to service our customers and navigate input cost inflation and supply chain hurdles.”
Segments: Operating profits in the 1Q 2022:
Europe - $36 million compared with $16 million in the 4Q 2021. Earnings were higher as higher average sales prices and lower planned maintenance outages more than offset seasonally weaker demand, higher operating costs and higher input costs.
Latin America - $40 million compared with $64 million in the 4Q 2021. Earnings were lower as higher average sales prices were more than offset by lower seasonal demand, higher input costs and an unfavorable foreign exchange impact.
North America - $65 million compared with $43 million in the 4Q 2021. Earnings were higher as higher average sales prices, higher volumes and lower maintenance outages more than offset higher input costs.
2Q Оutlook:
- Price and mix are expected to improve by $60 million to $65 million, compared to the 1Q, reflecting continued realization of prior price increases in all regions.
- Volume is expected to decrease $10 million to $15 million, with seasonally stronger Latin American volume offsetting more maintenance outages in North America.
- Operations and costs are expected to increase by $10 million to $15 million, due to other costs.
- Input and transportation costs are projected to increase by $15 million to $20 million, mainly due to higher prices of natural gas in North America and rising diesel costs affecting fiber delivery in Latin America.
- Total maintenance outage expenses are projected to increase by $25 million.
- The Company also expects $8 million in costs related to transition service agreements in the quarter and $15 million of one-time costs (transition service agreements costs are not included in adjusted EBITDA, and one-time costs are not included in adjusted EBITDA and adjusted operating earnings).
Sylvamo Corporation is the world’s paper company with mills in Europe, Latin America and North America.
