Sylvamo (US:SLVM)2023-11-09 18:13Financial Performance - In Q3 2023, net income from continuing operations was $58 million ($1.37 per diluted share), up from $49 million ($1.14 per diluted share) in Q2 2023[103]. - Net sales for Q3 2023 were $897 million, a decrease from $919 million in Q2 2023[103]. - Adjusted EBITDA for Q3 2023 was $158 million, with an adjusted EBITDA margin of 17.6%, compared to $124 million and a margin of 13.5% in Q2 2023[103]. - Adjusted EBITDA for the nine months ended September 30, 2023, was $490 million, down from $551 million in the same period of 2022[129]. Segment Performance - In Q3 2023, Latin America segment net sales decreased by $24 million compared to Q3 2022, primarily due to lower sales volumes[119]. - North America segment net sales decreased by $113 million in Q3 2023 compared to Q3 2022, driven by lower sales volumes and decreased sales prices[124]. Cost Management - The company initiated a cost reduction program targeting run rate savings of at least $110 million by the end of 2024, with two-thirds expected from operational improvements[104]. - The company expects unfavorable price and mix in Q4 2024, primarily due to prior paper price decreases in Europe[105]. Cash Flow and Investments - The company reported a free cash flow of $155 million in Q3 2023, compared to $33 million in the prior quarter[103]. - Free cash flow for the nine months ended September 30, 2023, was $190 million, compared to $185 million for the same period in 2022, reflecting a slight increase[131]. - Cash provided by operating activities from continuing operations totaled $337 million for the nine months ended September 30, 2023, up from $276 million in the same period of 2022, indicating strong operational performance[135]. - Cash used for investing activities increased to $147 million for the nine months ended September 30, 2023, primarily due to the purchase of the Nymölla mill and increased capital spending[138]. - Capital expenditures for the nine months ended September 30, 2023, were approximately $147 million, or 5.3% of net sales, compared to $91 million in 2022[142]. - The company has invested approximately $131 million in maintenance, regulatory, and reforestation capital expenditures during the nine months ended September 30, 2023[143]. Financing Activities - Cash used for financing activities included $360 million paid to bondholders as part of a tender offer and $32 million in dividends during the nine months ended September 30, 2023[140]. Working Capital - Working capital components provided $3 million in cash for the nine months ended September 30, 2023, a significant improvement from cash used of $86 million in the same period of 2022[137]. - The increase in cash provided by operating activities in 2023 was primarily due to changes in working capital[136]. Future Outlook - The company anticipates future cash requirements will be met through operating cash flows, available cash balances, and borrowings as needed[132]. - The company expects to spend approximately $175 to $190 million annually on maintenance, regulatory, and reforestation capital expenditures for the next several years[143]. Acquisition Impact - The acquisition of Stora Enso's Nymölla mill in Sweden was completed on January 2, 2023, contributing $88 million to Q3 net sales[106][114].