Sylvamo (SLVM) - 2024 Q4 - Annual Results

Financial Performance - Net income for 2024 was $302 million ($7.18 per diluted share), a 19% increase from $253 million ($5.93 per diluted share) in 2023[5] - Adjusted EBITDA for 2024 reached $632 million with a 17% margin, compared to $607 million with a 16% margin in 2023[5] - Free cash flow for 2024 was $248 million, down from $294 million in 2023, representing 52% of free cash flow returned to shareholders[6] - Net sales for Q4 2024 were $970 million, slightly up from $965 million in Q3 2024 and $964 million in Q4 2023[20] - Net income for the three months ended December 31, 2024, was $81 million, compared to $49 million in the previous quarter and $95 million in the same quarter last year, with total net income for the twelve months at $302 million, an increase from $253 million in 2023[32] - Diluted earnings per share for the three months ended December 31, 2024, were $1.94, up from $1.16 in the previous quarter and $2.27 in the same quarter last year, while total diluted earnings per share for the twelve months reached $7.18, compared to $5.93 in 2023[39] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $632 million, up from $607 million in 2023, reflecting a 4.1% growth[49] - The adjusted EBITDA margin for the three months ended December 31, 2024, improved to 16.2%, compared to 12.1% in the same period of 2023[50] Operational Highlights - The company achieved a 23% return on invested capital in 2024[5] - The operating profit for North America in the three months ended December 31, 2024, was $56 million, an increase from $52 million in the previous quarter and $98 million for the twelve months, compared to $269 million in 2023[42] - The business segment operating profit for the three months ended December 31, 2024, was $109 million, compared to $77 million in the previous quarter and $150 million for the twelve months, compared to $453 million in 2023[42] Sales Performance - Net sales for the three months ended December 31, 2024, were $970 million, slightly increasing from $964 million in the previous year[49] - The company experienced a decrease in net sales in Europe, reporting $194 million for the three months ended December 31, 2024, down from $197 million in the previous quarter and $194 million in the same quarter last year, with total sales for the twelve months at $801 million, down from $821 million in 2023[41] - Latin America net sales for the three months ended December 31, 2024, were $266 million, a decrease from $288 million in the previous quarter and $247 million in the same quarter last year, with total sales for the twelve months at $974 million, down from $1,006 million in 2023[41] Expenses and Losses - Planned maintenance outage expenses increased by $17 million in Q4 2024, impacting overall profitability[5] - The company reported a pre-tax loss of $2 million related to forest fires in Brazil for the twelve months ended December 31, 2024, and a pre-tax loss of $1 million for severance costs related to the salaried workforce[35] - The company incurred a pre-tax loss of $5 million related to debt extinguishment costs for the twelve months ended December 31, 2024[36] Cash Flow and Equity - Cash provided by operating activities for the twelve months ended December 31, 2024, was $469 million, compared to $504 million in 2023, a decrease of 6.9%[54] - Free cash flow for the twelve months ended December 31, 2024, was $248 million, down from $294 million in 2023, reflecting a 16.6% decline[56] - Total assets decreased to $2,604 million as of December 31, 2024, down from $2,872 million in 2023, indicating a 9.3% decline[52] - Total equity decreased to $847 million as of December 31, 2024, from $901 million in 2023, a decline of 6%[52] Future Outlook - The company plans to invest approximately $145 million in high-return capital projects over the next three years to enhance capabilities at its Eastover mill[11] - A 20-year partnership will be established to outsource operations at the Eastover woodyard, avoiding approximately $75 million in capital spending over the next five years[13] - Adjusted EBITDA for Q4 2024 is projected to be between $85 million and $105 million, with expected decreases in price and mix impacting earnings[5] - The effective tax rate for Q4 2024 was reported at 19%, down from 28% in Q3 2024, due to a favorable mix of earnings[25] - The company expects adjusted EBITDA for the three months ending March 31, 2025, to be in the range of $85 million to $105 million[60]