Sylvamo Corporation (NYSE: SLVM) is a global leader in the paper industry, with operations spanning Europe, Latin America, and North America. The company focuses on uncoated freesheet paper, serving various sectors such as education, communication, and entertainment.

For the first quarter of 2025, Sylvamo reported a decline in key financial metrics. Net income was $27 million, or $0.65 per diluted share, down from $81 million ($1.94 per diluted share) in the previous quarter. Adjusted operating earnings were also lower, totaling $28 million ($0.68 per diluted share), compared to $82 million ($1.96 per diluted share) in the fourth quarter of 2024. The company generated adjusted EBITDA of $90 million, reflecting an 11% margin, down from $157 million and a 16% margin last quarter.

Sales saw a significant drop, with net sales of $821 million compared to $970 million the previous quarter. Volume decreased by $30 million, attributed to seasonal demand variations, reduced sales from the closure of the agreement with International Paper’s Georgetown mill, and operational challenges in North America.

Planned maintenance outage expenses increased by $9 million, reflecting costs associated with major outages executed in the first quarter. Input and transportation costs rose by $6 million, primarily due to higher energy prices and extreme cold weather impacting operations across the U.S. Cash provided by operating activities was $23 million, down from $164 million, while free cash flow was negative at $(25) million compared to $100 million last quarter.

Looking ahead, Sylvamo expects second-quarter adjusted EBITDA to range between $75 million and $95 million. The company anticipates price and mix improvements of $5 million to $10 million, largely driven by more favorable conditions in Latin America and North America. Volume is projected to remain stable, though there may be challenges fulfilling existing orders due to low inventory levels in North America.

Operations and other costs are expected to show improvement of $10 million to $15 million, benefitting from seasonally lower operating costs and enhancements in manufacturing processes. However, planned maintenance outages for the second quarter are projected to increase by $36 million as the heaviest maintenance period of the year commences.

Overall, Sylvamo continues to manage its operational challenges while implementing price increases to mitigate impact from market pressures. The company’s financial foundation remains strong, as it reported a leverage ratio of 1.1x and has no major maturities until 2027, with available cash on hand and significant flexibility for future operations.