Sylvamo (SLVM) - 2024 Q2 - Quarterly Report

Financial Performance - Net income for Q2 2024 was $83 million ($1.98 per diluted share), up from $43 million ($1.02 per diluted share) in Q1 2024[73]. - Net sales increased to $933 million in Q2 2024 from$905 million in Q1 2024, with adjusted EBITDA rising to $164 million and an adjusted EBITDA margin of 18$282 million, down from $332 million in the same period of 2023[92]. - Cash provided by operating activities for the six months ended June 30, 2024, was$142 million, an increase from $140 million for the same period in 2023[97]. - Free Cash Flow for the six months ended June 30, 2024, was$29 million, compared to $35 million for the same period in 2023[94]. - The company generated strong operating cash flow, indicating confidence in meeting short-term liquidity needs[95]. Segment Performance - Business segment operating profit for North America increased by$32 million year-over-year in Q2 2024, driven by higher volumes and lower costs[89]. - Latin America segment reported a decrease in operating profit by $11 million in Q2 2024, primarily due to lower sales prices and unfavorable product mix[86]. - Europe segment's operating profit increased by$19 million year-over-year in Q2 2024, attributed to lower outage costs and input costs[83]. Cash Flow and Expenditures - Free cash flow improved to $62 million in Q2 2024 compared to$(33) million in Q1 2024[73]. - Cash used for working capital components decreased to $72 million for the six months ended June 30, 2024, from$94 million in the same period of 2023[98]. - Total capital expenditures for the six months ended June 30, 2024, were approximately $113 million, or 6.1$175 to $190 million annually on maintenance, regulatory, and reforestation capital expenditures for the next several years[102]. - Cash used for financing activities for the six months ended June 30, 2024, included$25 million in dividends and $30 million in share repurchases[100]. - Cash used for investing activities decreased primarily due to the prior year's purchase of the Nymölla mill[99]. - The company plans to spend approximately$30 million to $35 million on high-return projects in 2024[102]. Future Outlook - The company expects slightly unfavorable price and mix in Q3 2024, but volume is anticipated to improve, particularly in Latin America and North America[75]. - Planned maintenance outage costs are expected to improve significantly in Q3 2024, with no major planned outages scheduled[75]. - The company has completed almost 75% of its planned maintenance outages for the year after the first half[74]. Accounting Policies - The company has not made any changes to its critical accounting policies during the first six months of 2024[105].