Sylvamo (SLVM) Q2 2026 earnings summary

Executive summary

• Implemented uncoated freesheet price increases across all regions, advancing Lean transformation and strategic investments at the Eastover mill, with a focus on sustainable results and long-term value.

• 2026 is a transition year due to North America footprint adjustments, Riverdale supply agreement termination, changing tariffs, and extended Eastover outage, with most Free Cash Flow expected in the second half.

• Strategic projects at Eastover include woodyard modernization, paper machine optimization (adding 60,000 short tons capacity), new cutsize sheeter, and warehouse expansion via sale-leaseback, expected to deliver $50–$55 million annual benefit.

• Performance impacted by lower North America volume due to Riverdale supply loss and inventory build for Eastover outage.

Financial highlights

• Adjusted EBITDA for Q2 2026 was $60 million (7% margin), up from $29 million in Q1 2026 but down from $82 million in Q2 2025.

• Adjusted operating earnings per share were $0.03 in Q2 2026.

• Free Cash Flow was negative $23 million in Q2 2026, a $36 million sequential improvement but below $(2) million in Q2 2025.

• Net sales for Q2 2026 were $806–$827 million, with North America $411 million, Latin America $219 million, and Europe $197 million.

• Net loss of $11 million in Q2 2026, compared to $15 million net income in Q2 2025.

Outlook and guidance

• Expect $75–$85 million benefit from better price and mix in the second half versus the first half.

• 2026 outlook includes $120 million in total maintenance outage and one-time costs, with about half planned for Q4.

• Capital spending for 2026 projected at ~$245 million, with high-return projects increasing to ~$95 million.

• Anticipate >$300 million annual Free Cash Flow and >15% Return on Invested Capital as investments mature.

• Middle East conflict expected to pressure energy, chemical, and transportation costs.