Sylvamo reported a net loss of US$3 million in the first quarter of 2026 as the uncoated freesheet producer continued strategic investments and adjusted its North American supply footprint amid ongoing market pressures.
The company generated adjusted EBITDA of US$29 million, down from US$125 million in the previous quarter, while sales declined to US$755 million compared with US$890 million in the fourth quarter of 2025.
CEO John Sims described 2026 as a transition year for Sylvamo, citing short-term capacity constraints related to the end of the Riverdale supply agreement and an extended outage planned at the company’s Eastover mill in South Carolina as part of ongoing strategic investments.
Sylvamo is continuing several projects at Eastover, including paper machine optimization, installation of a new cutsize sheeter and modernization of the woodyard. The hardwood line is already operating, while the softwood operation is expected to start up in 2027.
To support key North American customers during the transition, the company temporarily increased paper imports from Europe before shifting part of those volumes to Brazil following changes to U.S. tariff measures announced in February. Sylvamo estimates the adjustment could reduce North American transition costs by approximately US$20 million in 2026.
The company also said it began implementing previously announced uncoated freesheet paper price increases across all regions. Sylvamo reported initial benefits in North America and Latin America during the first quarter, with additional realization expected in the second quarter.
By region, Europe posted an operating loss of US$44 million, compared with a US$29 million loss in the previous quarter, reflecting higher costs and continued difficult market conditions. In Latin America, operating profit declined to US$4 million, while North America generated operating profit of US$25 million, down from the fourth quarter of 2025.
Sylvamo also pointed to rising energy, chemical, logistics and ocean freight costs linked to the Middle East conflict, pressures the company expects to continue through the year.
Despite negative free cash flow of US$59 million in the quarter, the company maintained its long-term targets and said cash generation is expected to improve in the second half of the year, consistent with recent seasonal trends.
Sylvamo is also continuing an internal operational transformation program based on lean principles, initially launched in Latin America and scheduled to expand into North America this year.
Sylvamo produces uncoated freesheet papers in Europe, Latin America and North America. Headquartered in Memphis, Tennessee, the company employs more than 6,500 people and reported net sales of US$3.4 billion in 2025.
