Company Overview - International Paper Company (IP) is a leading producer of fiber-based packaging, pulp, and paper products, with a market cap of $24.5 billion [1] - The company offers a range of industrial packaging solutions, including containerboard, corrugated packaging, specialty papers, and pulp for hygiene and personal care items [1] Market Position - IP is classified as a "large-cap stock," highlighting its size, influence, and dominance in the packaging and containers industry [2] - The company has a strong reputation for innovation and sustainability, aligning with the increasing demand for eco-friendly products from customers and regulators [2] Stock Performance - IP shares have declined 23.1% from their 52-week high of $60.36, reached on November 25, 2024, and have underperformed compared to the Consumer Discretionary Select Sector SPDR Fund (XLY), which returned 14.7% over the same period [3] - Over the past 52 weeks, IP has declined 7.1%, significantly lagging behind XLY's 22.5% increase [4] - Year-to-date, IP shares are down 13.7%, while XLY has risen by 7.6% [4] Recent Earnings Report - Following its Q2 earnings release, IP shares dropped 12.9% on July 31 [5] - The company's revenue increased by 42.9% year-over-year to $6.8 billion, meeting consensus estimates, but its adjusted operating EPS of $0.20 fell short of analyst expectations by 47.4% [5] - A significant decline in margins due to cost headwinds, weaker demand in Europe, and increased depreciation and amortization expenses led to a 63.6% annual decline in adjusted operating earnings per share [5] - Free cash flow contracted 67.7% year-over-year to $54 million, raising investor concerns and contributing to the stock's selloff [5]

Core Viewpoint - International Paper is undergoing significant strategic changes, including the sale of its Global Cellulose Fibers business to American Industrial Partners for $1.5 billion, aimed at enhancing its focus on sustainable packaging solutions and improving its cost position [2][3]. Group 1: Sale of Global Cellulose Fibers Business - The sale of the Global Cellulose Fibers (GCF) business is valued at $1.5 billion, with adjustments including preferred stock issuance of $190 million [2]. - The GCF business generated $2.8 billion in revenue in 2024 and employs 3,300 people across nine manufacturing facilities [3]. - The transaction is expected to close by the end of the year, pending regulatory approvals [2]. Group 2: Strategic Changes in North America - International Paper is investing $250 million to convert the 16 machine at the Riverdale mill in Selma, Alabama, to produce containerboard [6]. - The company will permanently close the Savannah containerboard mill, Savannah packaging facility, and Riceboro mills, resulting in a net reduction of approximately one million tons in annual containerboard capacity [7]. - These changes will impact around 1,100 hourly and salaried positions, with the company committed to providing severance packages and outplacement assistance [4][5]. Group 3: Management Insights - The CEO of International Paper expressed confidence in the transition of GCF to AIP, highlighting the business's alignment with strategic customers and its potential for long-term success [3]. - AIP's partner noted GCF's strong position for future growth, supported by sustainable resources and long-term customer relationships [3].

Financial Data and Key Metrics Changes - The company reported that sales, operational cash generation, and EBITDA were in line with expectations for the quarter [10] - Net debt remained stable at $13 billion, with net leverage increasing to 3.1 times due to a reduction in last twelve months EBITDA to $4.2 billion [28] Business Line Data and Key Metrics Changes - The paper and packaging business in Brazil saw stronger sales volumes and lower costs compared to Q1, with EBITDA growth year-over-year [12] - U.S. operations experienced a 3% price increase quarter-over-quarter driven by product mix and better commercial location, although EBITDA was negatively impacted by lower volumes and higher costs due to maintenance [13][12] Market Data and Key Metrics Changes - In Brazil, print and write demand rose 6% year-over-year, while uncoated wood-free paper demand remained stable in North America and Latin America but declined 10% in Europe [14] - The U.S. market for boxboard demand was stable, with a 1% increase in demand for SBS boards [15] Company Strategy and Development Direction - The company is focusing on competitiveness and cost reduction, with expectations of lower cash costs in the upcoming quarters [10] - A deal with Eldorado is expected to provide an internal return of around 20%, allowing for increased production at the Ribba's mill without significant investment [7][8] Management's Comments on Operating Environment and Future Outlook - Management highlighted a positive outlook for cash cost trends and emphasized the importance of maintaining competitiveness in a challenging market environment [10][76] - The company is preparing for various scenarios in the global market and aims to improve operational efficiency [85] Other Important Information - The company is not currently planning significant new investments but is focused on executing existing projects and deleveraging [10][86] - The company has built inventories in the U.S. to mitigate the impact of 50% import duties imposed by the U.S. government [17] Q&A Session Questions and Answers Question: What are the changing dynamics in the pulp scenario? - Management noted high order intake levels in China and a supportive environment for price increases due to restocking movements and production recovery [32][34] Question: What is the internal rate of return for the deal with Eldorado? - The expected internal rate of return is around 20%, driven by optimized harvesting and reduced operational costs [40][42] Question: What is the expected CapEx trend for 2026? - The company anticipates a declining trend in CapEx, although specific numbers will be disclosed later [84] Question: How are negotiations regarding the 10% tariff going? - The company successfully negotiated that customers will bear the 10% tariff, ensuring that Suzano will not absorb this cost [95] Question: What is the status of the Kimberly Clark acquisition? - Dedicated teams have been established to plan the carve-out of the new joint venture, with the project progressing as planned [96]

Financial Performance - Sales volume reached 3.3 million tons in 2Q25, compared to 2.7 million tons in 1Q25 and 2.5 million tons in 2Q24[6] - Adjusted EBITDA was R$6.1 billion in 2Q25, versus R$4.9 billion in 1Q25 and R$6.3 billion in 2Q24[6] - Operating cash generation amounted to R$4.1 billion in 2Q25, up from R$2.6 billion in 1Q25 but down from R$4.5 billion in 2Q24[6] - Cash cost ex-downtimes was R$832/ton in 2Q25, compared to R$859/ton in 1Q25 and R$828/ton in 2Q24[6] - Net debt stood at US$13.0 billion in 2Q25, slightly higher than US$12.9 billion in 1Q25 and US$12.0 billion in 2Q24[7] - Leverage was 3.1x in US$ in 2Q25, compared to 3.0x in 1Q25 and 3.2x in 2Q24[7] Pulp and Paper Business - Paper sales were 348 thousand tons in 2Q25, compared to 329 thousand tons in 1Q25 and 270 thousand tons in 2Q24[6] - Pulp sales volume increased to 3,269 thousand tons in 2Q25 from 2,651 thousand tons in 1Q25 and 2,545 thousand tons in 2Q24[12] - Pulp business adjusted EBITDA margin was 52% in 2Q25[12] Financial Management - Notional value of the current portfolio was US$6.8 billion as of June 2025[22]

Summary of the Conference Call on the Pulp & Paper Industry Industry Overview - The China pulp market is currently in a fragile equilibrium, with good pulp sales recently but negative macro sentiment affecting trading and growth uncertainties [1][2] - Paper production has decreased by 2% year-to-date, while pulp supply is growing rapidly, leading buyers to perceive no risk of deficit for restocking [1][2] Key Points - **Market Sentiment**: Confidence levels among buyers and sellers are low, limiting significant price movements in the short term. Industry participants are holding onto unclear and potentially unsustainable reasons to support pricing [2][3] - **Price Trends**: Pulp prices are expected to remain relatively flat until the end of summer, but a potential cyclical rebound could occur towards year-end as low prices impact producers' balance sheets [3][19] - **Production and Inventory**: - Pulp inventories at Chinese ports decreased by 2% month-over-month to 2.1 million tons, still 14% above the 5-year historical average [19] - Paper output in China increased by 4% month-over-month and 5% year-over-year in July, with utilization rates remaining flat at 59% [21] Pricing Data - China FOEX hardwood imported pulp prices decreased by $3 per ton to $495 per ton, while domestic resale prices ranged from $488 to $492 per ton [10] - Softwood imported FOEX prices also decreased by $3 per ton to $687 per ton, with domestic resale prices ranging from RMB -27 to 1 per ton [10] Margins and Production Costs - Paper margins in China were flat to down in July, primarily due to a slight decline in paper prices across all grades, despite lower pulp prices partially offsetting this decline [13] - The cash cost curve in China remains deflationary, allowing production to remain resilient at low prices [1] European Market Insights - European containerboard prices were broadly flat in July, with Kraftliner prices up by 2% and Testliner down by 3% [25] - European graphic paper prices decreased, with coated and uncoated woodfree prices down by 2% and 3% month-over-month, respectively [28] Company-Specific Insights - UPM's management indicated a negative outlook for pulp, citing macro uncertainties and declining orders, leading to planned shutdowns of certain mills [34] - SCA's management noted a challenging market for European containerboard, with negative price movements due to oversupply and tariff discussions [35] - Altri's management highlighted that hardwood pulp prices are close to marginal costs and may stabilize soon, with European prices expected to follow China's trend with a delay [35] Latin America Market Data - In Brazil, corrugated box shipments decreased by 2% year-over-year and 6% month-over-month in June, with year-to-date shipments at 2.0 million tons, reflecting a 1% year-over-year decline [36] Investment Ratings - Various pulp and paper companies in Latin America have been rated with target prices and upside potential, with Suzano SA rated as a "Buy" with a target price of $65.00, reflecting a 24.6% upside [38] Conclusion - The pulp and paper industry is facing a complex landscape characterized by fragile market conditions, fluctuating prices, and varying production outputs. Investors should remain cautious and monitor macroeconomic factors that could influence market dynamics.

Financial Data and Key Metrics Changes - The company reported a negative EBITDA of $21 million for Q2 2025, a significant decrease from the positive EBITDA of $47 million in Q1 2025, primarily due to foreign exchange impacts and lower pulp prices in China [3][11][20] - The consolidated net loss for Q2 was $86 million, or $1.29 per share, compared to a net loss of $22 million, or $0.33 per share in Q1 [11] - Cash consumption increased to $35 million in Q2 from $3 million in Q1, driven by lower EBITDA [11] Business Line Data and Key Metrics Changes - The pulp segment had a negative EBITDA of $10 million in Q2, while the solid wood segment reported a negative EBITDA of $5 million [3][26] - NBSK pulp sales realizations decreased in Q2, with the net price in China dropping to $734 per tonne, a decrease of $59 from Q1 [4] - Lumber production decreased by 6% to approximately 120 million board feet in Q2 due to planned maintenance [9] Market Data and Key Metrics Changes - In North America, the average list price for MBSK increased by $67 to $18.20 per tonne, while the European price remained stable at $15.53 per tonne [4] - The average price for NBHK in China decreased by $45 to $533 per tonne [5] - Pulp sales volumes decreased by 51,000 tons to 427,000 tons in Q2 due to weaker demand [5][6] Company Strategy and Development Direction - The company launched the "One Goal 100" program aimed at achieving $100 million in cost savings and operational efficiencies by 2026 [10][14] - The company plans to reduce capital expenditures to about $100 million in 2025, focusing on maintenance and safety projects [34] - The company is exploring a carbon capture project at the Peace River Mill, which could generate significant revenue from CO2 credits [35][70] Management's Comments on Operating Environment and Future Outlook - Management highlighted that trade uncertainty and tariffs have negatively impacted Q2 results, particularly affecting demand from China [13][19] - The company expects pulp prices to remain weak through the summer but anticipates a recovery in Q4 as demand picks up [22][66] - Management remains optimistic about the long-term value of pulp and the growth potential of mass timber products [36][33] Other Important Information - The company suspended its dividend as a prudent measure to focus on debt reduction amid market uncertainties [19] - The company reported a strong liquidity position of $438 million at the end of Q2, including $146 million in cash [12] Q&A Session Summary Question: Can you provide information on cash flow items for 2025? - The company expects cash taxes for the year to be about $25 million, with a slight negative working capital change anticipated [39][44] Question: What is the minimum liquidity level the company is comfortable with? - The company is not concerned about liquidity and has room to adjust capital expenditures if needed [51][54] Question: Can you comment on softwood inventory levels and potential write-downs? - The company does not foresee any impairments on softwood inventories, although levels are slightly elevated [58] Question: What could catalyze pulp prices gaining momentum later in the year? - The company expects restocking demand after the low summer season to drive pulp prices up, particularly for softwood [66] Question: How significant is the carbon capture project at Peace River? - The project could generate over $100 million per year in revenue from CO2 credits, with a capital requirement of around $100 million for the company's share [70][74] Question: How is the Torgau mill positioned for the U.S. market? - The Torgau mill is equipped to supply the U.S. market and is expected to increase production capacity [78][80]

Financial Performance - Mercer's Operating EBITDA decreased significantly from $47 million in Q1 2025 to -$21 million in Q2 2025[6] - The pulp segment experienced a substantial decrease in EBITDA, from $50 million in Q1 2025 to -$10 million in Q2 2025[6] - The solid wood segment's EBITDA also decreased, from -$0 million in Q1 2025 to -$5 million in Q2 2025[6] - Net loss increased from -$22 million in Q1 2025 to -$86 million in Q2 2025[27] Pulp Market - NBSK (Northern Bleached Softwood Kraft) list price was $1,000 per tonne[10] - NBSK China (net) price decreased from $793 per tonne in Q1 2025 to $734 per tonne in Q2 2025[10] - NBHK (Northern Bleached Hardwood Kraft) China (net) price decreased from $578 per tonne in Q1 2025 to $533 per tonne in Q2 2025[10] Lumber and Mass Timber - Lumber production decreased by 6% from 128 mmfbm in Q1 2025 to 120 mmfbm in Q2 2025[43] - Mass timber revenue decreased from $17 million in Q1 2025 to $11 million in Q2 2025[25] Strategic Initiatives - Mercer aims to improve profitability by $100 million by the end of 2026, using 2024 as a baseline[30] - The company realized $5 million in cost savings to date and anticipates $25 million for 2025[30]

Core Insights - Mercer International Inc. reported a significant decline in Operating EBITDA, posting negative $20.9 million for Q2 2025, down from positive $30.4 million in Q2 2024 and $47.1 million in Q1 2025 [2][9][37] - The company experienced a net loss of $86.1 million ($1.29 per share) in Q2 2025, compared to a net loss of $67.6 million ($1.01 per share) in Q2 2024 and $22.3 million ($0.33 per share) in Q1 2025 [2][9][37] - The decline in performance is attributed to ongoing uncertainties in the global trade environment, weaker demand for pulp in China, and a depreciation of the dollar, which negatively impacted Operating EBITDA by approximately $26 million [3][9][37] Financial Performance - Total revenues for Q2 2025 decreased by approximately 9% to $453.5 million from $499.4 million in Q2 2024, primarily due to lower sales realizations and volumes from pulp and manufactured products, partially offset by higher lumber sales realizations [14][35] - Costs and expenses in Q2 2025 decreased by approximately 6% to $511.9 million from $543.2 million in Q2 2024, driven by fewer days of planned maintenance downtime at pulp mills [15][35] - The company reported a total net loss of $108.4 million for the first half of 2025, compared to a net loss of $84.3 million in the same period of 2024 [36][48] Segment Analysis - In the pulp segment, revenues decreased by approximately 10% to $332.3 million in Q2 2025 from $367.4 million in Q2 2024, primarily due to lower pulp sales realizations and volumes [19][22] - The solid wood segment saw revenues decrease by approximately 10% to $117.3 million in Q2 2025 from $130.2 million in Q2 2024, mainly due to lower manufactured products revenues, despite higher lumber revenues [28][29] - Lumber revenues increased by approximately 23% to $66.3 million in Q2 2025 from $53.9 million in Q2 2024, driven by higher sales realizations [29][30] Operational Highlights - The company had 29 days of downtime in Q2 2025, which included 23 days of planned annual maintenance and six additional days due to slower than expected start-up [11][25] - Total pulp production increased by approximately 8% to 457,117 ADMTs in Q2 2025 compared to 421,692 ADMTs in Q2 2024, attributed to fewer days of planned maintenance downtime [24][25] - Average per unit fiber costs increased by approximately 11% in Q2 2025 compared to Q2 2024, primarily due to higher costs at German mills [26][34] Strategic Initiatives - The company is implementing cost reduction initiatives under the "One Goal One Hundred" program, targeting $100 million in profitability improvement actions by the end of 2026, with approximately $5 million in cost savings realized to date [5][9] - The quarterly dividend has been suspended to prudently allocate capital amidst ongoing market uncertainties [9][12]

Core Points - The Government of British Columbia has approved a new First Nations Woodland Licence in the Smithers area, marking a significant milestone in the partnership between West Fraser Timber Co. Ltd. and Lake Babine Nation Forestry Limited Partnership [1][2] - This new licence is a result of contributions from West Fraser and LBN Forestry, aimed at enhancing timber tenure collaboration in British Columbia's forest sector [1][5] Company Overview - West Fraser is a diversified wood products company with over 50 facilities across Canada, the United States, the United Kingdom, and Europe, focusing on sustainable forest practices [8] - The company produces a variety of products including lumber, engineered wood products, pulp, and newsprint, which are utilized in home construction and industrial applications [8] Indigenous Partnership - The partnership between West Fraser and Lake Babine Nation is designed to integrate Indigenous knowledge with modern forestry practices, ensuring sustainable resource management and economic opportunities for the Lake Babine Nation [3][4] - Lake Babine Nation has established its forestry company in 2016, emphasizing the importance of growing its role in forestry and forest management [9] Economic Impact - The collaboration is expected to create jobs and strengthen the forest economy in British Columbia, benefiting local communities [8] - The new licence builds on previous agreements, including a Joint Development Agreement signed in April 2024 and a Log Supply and Forest Management Agreement signed in January 2025, indicating a long-term commitment to this partnership [7]

Company Overview - Edible Garden AG Incorporated is a leader in controlled environment agriculture (CEA), focusing on locally grown, organic, and sustainable produce and products [4] - The company operates state-of-the-art vertically integrated greenhouses and processing facilities in Belvidere, New Jersey, and Grand Rapids, Michigan, and has a network of contract growers strategically located near major markets in the U.S. [4] - Edible Garden's proprietary technologies include the GreenThumb software and Self-Watering in-store displays, aimed at optimizing growth and enhancing the in-store experience [4] Leadership Appointment - Sohail Ahmad has been appointed as Vice President of Finance, effective immediately, bringing over 20 years of experience in the food and consumer goods sectors [1][2] - Ahmad's previous roles include Chief Financial Officer at HOS Global Foods, a $300 million enterprise, and Global CFO at Guestworldwide, a $1.7 billion division of Sysco Corporation [2] - The CEO of Edible Garden, Jim Kras, emphasized Ahmad's strategic mindset and ability to lead transformation, which aligns with the company's growth trajectory and focus on operational efficiency [3] Product Lines and Market Position - Edible Garden offers a growing lineup of products, including Kick. Sports Nutrition, Vitamin Whey®, and Pulp, catering to health-conscious consumers [3] - The company has been recognized as a FoodTech 500 company and is a member of Walmart's Project Gigaton sustainability initiative [4] - Edible Garden is also involved in developing plant and whey protein powders, as well as fresh condiments, enhancing its product diversity [4]