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Sylvamo targets stronger second half as prices and capacity projects ramp
The company expects $75 million to $85 million of price and mix benefits in the second half, while planned maintenance outage costs pressured adjusted earnings.
Sylvamo (NYSE: SLVM) reported second-quarter 2026 results on August 7, showing sequential adjusted EBITDA rising to $60 million, more than doubling the prior quarter, even as margins remained thin at 7%. Free cash flow was still negative at $23 million, though management said it improved from the quarter before.
In outlining its outlook for a stronger back half, Sylvamo said 2026 is a transition year shaped by the end of a supply agreement and an extended mill outage. Price and mix gains added $32 million to EBITDA in the quarter, supported by uncoated freesheet price increases across every region it serves, with Europe receiving an additional increase in mid-June and realization continuing into the third quarter.
The company expects $75 million to $85 million of second-half price and mix benefit versus the first half, citing seasonally stronger demand in Latin America and ongoing price hikes to export customers in that region and in the Middle East and Africa. North America capacity dynamics also shifted after International Paper's Riverdale mill conversion took 7% of uncoated freesheet industry capacity offline, giving Sylvamo more room to raise prices.
Sylvamo pointed to Eastover mill investments as another lever, including a paper machine speed-up that should add 60,000 tons of annual capacity after completion during the fourth-quarter outage, plus a new sheeter that already cleared acceptance testing and arrived in the U.S. Despite improving sequential operating metrics, earnings were constrained, with adjusted operating earnings of $0.03 per share weighed down by $24 million in planned maintenance outage costs, and the company expects roughly $5 million more unfavorable maintenance impact in the second half as the Eastover work is finished, alongside a $2 million drag from higher input and transportation costs.