Sylvamo (US:SLVM)2022-05-12 12:04Financial Performance - In Q1 2022, the company reported net income of $26 million ($0.59 per diluted share), down from $62 million ($1.41 per diluted share) in Q1 2021 [107]. - Net sales for Q1 2022 were $977 million, a 25.6% increase from $778 million in Q1 2021, driven by higher average sales prices [115]. - Adjusted EBITDA for Q1 2022 was $187 million, up $64 million from $123 million in Q1 2021 [107]. - Net income for the three months ended March 31, 2022, was $26 million, a decrease of 58% compared to $62 million in the same period of 2021 [138]. - Adjusted EBITDA for the same period increased to $187 million, up 52% from $123 million in the prior year [138]. - Free Cash Flow for the three months ended March 31, 2022, was $73 million, an increase from $65 million in the same period of 2021 [141]. Operational Highlights - Cash from operations increased to $92 million in Q1 2022, compared to $82 million in the same quarter of 2021 [107]. - Total business segment operating profit for Q1 2022 was $141 million, compared to $84 million in Q1 2021, with North America segment showing significant growth [123]. - North America segment net sales increased by $126 million to $508 million in Q1 2022, primarily due to higher market prices [133]. - Europe segment net sales rose by $41 million to $279 million in Q1 2022, driven by recovery from COVID-19 impacts [128]. - Latin America segment net sales increased by $47 million to $215 million in Q1 2022, reflecting market price increases [131]. Impairment and Taxation - The company recorded a $68 million impairment charge related to its Russian operations due to geopolitical challenges [113]. - The effective income tax rate for Q1 2022 was 50%, up from 26% in Q1 2021, influenced by the impairment charge and changes in foreign tax credits [120]. Capital Expenditures and Debt - Capital spending totaled $19 million for the three months ended March 31, 2022, representing 56% of depreciation, amortization, and cost of timber harvested, compared to 47% in the prior year [150]. - As of March 31, 2022, the company had $1.4 billion in outstanding debt, with a total borrowing capacity of $450 million on its revolving credit facility [144]. - The company expects annual maintenance, regulatory, and reforestation capital expenditures to be in the range of $130 to $150 million for the next several years [153]. - The company anticipates spending approximately $20 million on high-return projects in 2022 [153]. Working Capital and Liquidity - Cash used for working capital components was $36 million for the three months ended March 31, 2022, compared to $31 million in the same period of 2021 [147]. - The company’s liquidity and capital resource planning is highly sensitive to changes in pricing and demand for its products, with a focus on operational excellence to generate sufficient cash flow [143].