Sylvamo Releases Third Quarter Earnings

Sylvamo (NYSE: SLVM), the world’s paper company, is releasing third quarter 2025 earnings.

Message from Chairman and Chief Executive Officer
“Our team delivered 7% sales volume growth quarter-over-quarter and improved operational performance in the third quarter. We also returned substantial cash to shareowners in the quarter, which included $42 million in share repurchases and $18 million in dividends,” said Jean-Michel Ribiéras. “I am proud of how our teams executed and overcame some regional challenges by focusing on commercial and operational excellence as well as implementing strategic initiatives to reduce costs and strengthen our competitive position.”

Financial Highlights – Third Quarter

Net income of $57 million ($1.41 per diluted share)
Adjusted operating earnings* of $58 million ($1.44 per diluted share)
Adjusted EBITDA* of $151 million (18% margin)
Cash provided by operating activities of $87 million
Free cash flow* of $33 million
Commercial and Operational Highlights – Third Quarter vs. Second Quarter
Price and mix decreased by $14 million, primarily driven by paper and pulp prices in Europe
Volume increased by $14 million, mainly in Latin America and North America
Operations and other costs were favorable by $5 million
Planned maintenance outage expenses decreased by $66 million as expected
Input and transportation costs increased slightly by $2 million

Fourth Quarter Outlook

Adjusted EBITDA of $115 million to $130 million
Compared to the third quarter:
- Price and mix are expected to decrease by $20 million to $25 million, primarily due to paper prices in Europe and mix across our regions
- Volume is projected to improve in the range of $15 million to $20 million, primarily due to Latin America and North America
- Operations and other costs are expected to increase by $5 million to $10 million, primarily due to seasonally higher costs
- Input and transportation costs are projected to be stable
- Total planned maintenance outage expenses will increase by $18 million

Management Summary
We delivered stronger uncoated freesheet volumes in the third quarter, up 7% quarter-over-quarter. Our teams executed well, resulting in improved commercial and operational performance. We returned substantial cash to shareowners through $42 million in share repurchases and $18 million in dividends, totaling $60 million in the quarter. Year to date through October, we have returned $82 million through share repurchases and $73 million through dividends for a total of $155 million in cash returns to shareowners.

In September, our board of directors authorized a new $150 million share repurchase program—our third since 2022—underscoring our commitment to disciplined capital allocation and long-term value creation. We will continue to evaluate opportunities to repurchase shares at attractive prices, especially when we feel our valuation is well below our intrinsic value. This is why, in the third quarter, we repurchased $42 million worth of shares at an average price of $44.74. Our board also declared a fourth quarter dividend of $0.45 per share, which we paid Oct. 17.

-- Industry Conditions
Looking at our regional industry conditions, North America and Brazil are solid, while Europe and other Latin American countries are challenged.

In Europe, industry conditions continue to be very challenging. Pulp and uncoated freesheet prices remain under pressure. Some pulp grades started to show signs of recovery at the end of the third quarter. Uncoated freesheet demand is down 5% year-over-year through September, while supply is down 7%. Wood costs in southern Sweden are starting to ease, recently decreasing by a reported 8%.
In Latin America, demand remains mixed. Brazil is up 3% year-over-year through September, while other Latin American countries are down 5%. Even though the majority of this demand decline is due to Argentina and Mexico, some countries across other Latin America are having economic challenges as well. This demand decline, in addition to shifts in global trade flows, is resulting in continued pricing pressure in other Latin American countries.
In North America, demand is stable year-over-year through September. Imports were up 46% year-over-year through August in anticipation of tariffs but are expected to moderate. Customer feedback indicates that inventories from increased imports are being consumed and returning to normal levels. Industry supply was reduced 6% in the third quarter after Pixelle closed its Chillicothe, Ohio, mill in August.

-- Continuous Improvement
As we navigate through cyclical industry conditions and headwinds, we are focused on the things we can control. We are driving commercial and operational excellence as well as implementing strategic initiatives across all our regions. These efforts should improve margins, reduce costs and strengthen our competitive position.

In Europe, we’re improving our product mix and winning new customers at our Saillat, France, mill. We’re actively working to reduce wood costs at our Nymölla, Sweden, mill, a key lever for cost efficiency. Additionally, we’re reducing fixed costs and improving operational efficiency and reliability across the region.
In Latin America, we’ve secured new strategic Brazilian customers and further developed key partnerships in other Latin American countries, expanding our market presence. We’re investing in improving wood self-sufficiency to reduce costs by decreasing the need for higher cost third-party fiber. Our team is also executing a pipeline of more than 100 initiatives across the entire business designed to strengthen EBITDA and cash flow.
In North America, we’re focused on strategic commercial initiatives to improve volume and margin. We’re reducing costs and inventory through supply chain optimization. Finally, we’re investing in our flagship mill in Eastover, South Carolina, to improve our competitive advantages by lowering costs, enhancing efficiency and increasing capacity by 60,000 short tons. Across all regions, these initiatives reflect our commitment to customers, operational efficiency and strategic investments to deliver sustainable value.

-- Riverdale Supply Agreement
In August, International Paper (NYSE: IP) announced plans to convert its uncoated freesheet paper machine at its Riverdale mill to produce containerboard by the third quarter of 2026. In October, we announced that a supply agreement with International Paper will continue until May 2026. We expect the Riverdale mill to supply 260,000 short tons of cutsize uncoated freesheet in 2025 and approximately 100,000 short tons in 2026.

As a result of the supply agreement ending, we will optimize our product, segment and customer mix as well as leverage our European mills to supply the U.S. and Mexico. We will build inventory over time to help bridge the gap until our Eastover investments are complete and we have the additional 60,000 short tons of incremental capacity, which is expected to ramp up in the fourth quarter of 2026.

-- Brazil Forestlands
Owning forestlands in Brazil is a unique strength that differentiates Sylvamo. These assets provide a competitive advantage that goes beyond operational benefits. Direct control over wood fiber ensures supply security, reduces exposure to market volatility and supports long-term cost management.

Our forestlands represent a significant part of our intrinsic value, which we believe is not fully reflected in our current market valuation. We recently had an appraisal completed on our forestlands, which are now valued at nearly 5 billion reais. Forestlands are tangible and appreciating resources that are a cornerstone of our strategy, delivering cost advantages and a source of intrinsic value for our shareholders.

-- Sylvamo Strategy
Our strategy is to be singularly focused on uncoated freesheet, the largest and most resilient segment in the graphic paper space. We are investing to strengthen our competitive advantages to generate earnings and cash flows. We view these investments as high-return and low-risk as we stay in our core product line and reinforce our position as the supplier of choice for our customers. We will leverage our strengths to drive high returns on invested capital.

Source: BusinessWire