International Paper today reported second quarter 2023 financial results.
SECOND QUARTER 2023 HIGHLIGHTS
• Net earnings of $235 million ($0.68 per diluted share); Adjusted operating earnings* (non-GAAP) of $204 million ($0.59 per diluted share)
• $55 million of earnings achieved from Building a Better IP initiatives, bringing year-to-date to $120 million
• Cash provided by operations of $528 million, bringing year-to-date to $873 million; Free cash flow** (non-GAAP) of $265 million year-to-date 2023
• Returned $200 million to shareholders through $40 million share repurchases and $160 million in dividends, bringing year-to-date to $519 million
"In the second quarter, the operations of International Paper continued to run well and we managed our businesses effectively in a challenging demand environment," said Mark Sutton, Chairman and Chief Executive Officer. "We continued to advance our Building a Better IP initiatives, including our commercial improvement and cost management opportunities. The benefits of that work and our strong financial foundation position International Paper well as we navigate the current economic environment."
SEGMENT INFORMATION
Second quarter 2023 net sales by business segment and operating profit (loss) by business segment compared with the first quarter of 2023 and the second quarter of 2022 are as follows:
Industrial Packaging operating profits (losses) in the second quarter of 2023 were $304 million compared with $322 million in the first quarter of 2023. In North America, earnings decreased on lower sales prices in a continued soft demand environment for corrugated boxes and containerboard as customer inventory destocking continued. The demand environment resulted in additional economic downtime driving higher operating costs that more than offset lower planned maintenance outage costs and input costs, primarily for energy, freight and wood. In EMEA, earnings were flat as lower energy costs were offset by seasonally lower volumes and lower sales prices for containerboard.
Global Cellulose Fibers operating profits (losses) in the second quarter of 2023 were $30 million compared with $(16) million in the first quarter of 2023. Earnings improved in spite of lower sales of fluff pulp and decreased pulp pricing in a challenging global market environment impacted by customer inventory destocking as supply chain conditions improved. The earnings improvement was driven by lower operating costs, planned maintenance costs and input costs, primarily for chemicals and energy.
EQUITY METHOD INVESTMENT - ILIM JOINT VENTURE
On January 24, 2023, the Company announced an agreement to sell its investment in the Ilim joint venture, subject to regulatory approvals. The Company initially recognized an impairment charge of $533 million including approximately $375 million foreign currency cumulative translation adjustment loss in the fourth quarter of 2022. Through the second quarter of 2023, the Company recognized an additional $76 million impairment charge.
Equity earnings (losses), excluding impairment, were $46 million in the second quarter of 2023 compared with $43 million in the first quarter of 2023. The current period and historical results have been adjusted to reflect Ilim as a discontinued operation and our investment balance, following the adjustment to fair value and resulting impairment charges, is included in Assets Held for Sale.
TAPPI
http://www.tappi.org/