Sylvamo reported a net loss of $11 million for the second quarter of 2026, while improved pricing and stronger sequential operating performance helped lift adjusted EBITDA to $60 million.
Net sales reached $806 million, up from $755 million in the first quarter and $794 million a year earlier. Adjusted EBITDA more than doubled from $29 million in the previous quarter but remained below the $82 million recorded in the second quarter of 2025. Cash provided by continuing operations totaled $38 million, while free cash flow was negative $23 million.
The Memphis-based uncoated freesheet producer expects significantly stronger earnings during the final six months of the year. Management said price and mix, volume and operations should all improve compared with the first half.
Price increases support regional performance
Chief Executive Officer John Sims said Sylvamo continued implementing previously announced uncoated freesheet price increases across all regions. The company is also advancing a lean transformation program designed to establish employee-led, systematic and sustained operational improvement.
In North America, supply and demand conditions improved following the conversion of International Paper’s Riverdale paper machine, which removed approximately 7% of annual regional uncoated freesheet capacity. Sylvamo nevertheless reported a quarter-over-quarter increase in imports, which it attributed to a period when a 10% global tariff applied.
Separately, Sylvamo is managing the termination of its Riverdale supply agreement with International Paper as part of a broader transition in North America. Changing tariffs and the extended outage required to complete strategic investments at the Eastover mill are creating additional near-term pressure.
In Europe, pulp prices improved during the first half and appeared to stabilize, according to the company. Sylvamo is continuing to realize earlier paper price increases and expects a further increase announced in June to benefit third-quarter results.
Latin American demand is expected to strengthen seasonally during the second half, supporting volume and geographic mix. Price increases for export customers in other Latin American markets, as well as the Middle East and Africa, are also expected to continue taking effect through the third quarter.
Sylvamo cautioned that conflict in the Middle East could continue to place upward pressure on energy, chemical and transportation costs across its operating regions.
Eastover investments remain on schedule
The company reported progress on several high-return projects at its Eastover, South Carolina, mill. The hardwood portion of a woodyard modernization project began operating in May and is delivering improved reliability and chip quality. Startup of the softwood operation remains scheduled for the first quarter of 2027.
A paper machine optimization project is expected to be completed during a planned fourth-quarter maintenance outage. The project remains on schedule and on budget and is designed to add 60,000 short tons of annual uncoated freesheet capacity.
Sylvamo’s new cutsize sheeter passed equipment acceptance testing in June and has arrived in the United States ahead of installation. The company is also expanding warehouse capacity at its existing sheeting facility through a sale-leaseback transaction. That project, scheduled for completion in the first quarter of 2027, is intended to reduce supply chain costs and provide greater operating flexibility.
Long-term cash generation remains a priority
Sylvamo said it has historically generated most of its annual free cash flow in the second half and expects that pattern to continue in 2026. The board declared a third-quarter dividend of $0.45 per share, paid on July 28.
Over the longer term, the company believes normalized capital spending, improved industry conditions and returns from its strategic investments could support annual free cash flow of more than $300 million and a return on invested capital above 15%.
Sylvamo Corporation produces paper at mills in Europe, Latin America and North America. Headquartered in Memphis, Tennessee, the company employs more than 6,500 people and recorded net sales of $3.4 billion in 2025.
