Sylvamo Corporation Reports Significant Decline in Q2 2025 Financial Performance

Sylvamo Corporation reported a significant decline in its financial performance for the second quarter of 2025, with net income falling to $15 million, or $0.37 per diluted share, compared to $83 million, or $1.98 per diluted share, in the same period last year. The company's net sales also decreased to $794 million from $933 million year-over-year. The decline in revenue was attributed primarily to lower volumes in North America, particularly following the closure of International Paper’s Georgetown mill, as well as unfavorable pricing and mix in Europe. Adjusted EBITDA for the quarter was $82 million, reflecting a margin of 10%, down from $164 million and an 18% margin in the prior year.

In terms of operational metrics, Sylvamo's cash provided by operating activities decreased to $64 million from $115 million in the second quarter of 2024. The company reported a free cash flow of negative $2 million, a stark contrast to the $62 million generated in the same quarter last year. The decline in cash flow was primarily due to lower net income and increased costs associated with planned maintenance outages across five mills, which were significantly higher than in the previous year.

Geographically, Sylvamo's business segments experienced varied performance. In Europe, sales decreased by $25 million due to lower sales prices and volumes, resulting in an operating loss of $38 million. Latin America also saw a decline in sales by $38 million, with an operating profit of only $2 million, down from $37 million in the previous year. Conversely, North America reported a decrease in sales of $74 million but maintained an operating profit of $66 million, albeit lower than the $77 million recorded in the same quarter of 2024.

Looking ahead, Sylvamo anticipates continued challenges in pricing and mix, particularly in the paper and pulp markets in Europe. However, the company expects volume improvements due to stronger seasonal demand in both Latin America and North America. Operational performance is projected to improve slightly, with no planned maintenance outages in the third quarter, which is expected to reduce costs by approximately $66 million. The company remains committed to returning cash to shareholders, having paid $18 million in dividends and repurchased $20 million in shares during the quarter.