Sylvamo reported resilient financial performance for the fourth quarter and full year 2025, delivering solid earnings and disciplined capital allocation despite a challenging operating environment across several regions.
For the fourth quarter of 2025, the company generated net income of $33 million and adjusted EBITDA of $125 million, representing a 14% margin. Cash provided by operating activities reached $94 million, while free cash flow totaled $38 million.
On a full-year basis, Sylvamo posted net income of $132 million and adjusted EBITDA of $448 million, equivalent to a 13% margin. Operating cash flow amounted to $268 million, and the company achieved a 12% return on invested capital, underscoring its focus on efficiency and disciplined capital deployment.
Capital allocation and balance sheet strength
Maintaining a strong balance sheet remained central to Sylvamo’s strategy in 2025. Net debt to adjusted EBITDA stood at 1.6x, providing flexibility to reinvest through the cycle while continuing to return cash to shareholders.
During the year, Sylvamo reinvested $224 million across its manufacturing network and Brazilian forestlands to strengthen its low-cost asset base and advance high-return projects. The company also returned $155 million to shareholders, including $82 million in share repurchases and $73 million in dividends. As of late January, $150 million remained available under its current share repurchase authorization.
Regional performance highlights
Regional business conditions remained mixed. North America and Brazil continued to perform well, while Europe and parts of Latin America faced more difficult market dynamics.
In Europe, pricing pressure persisted, with cutsize paper prices ending 2025 approximately €100 per tonne below year-end 2024 levels. However, management noted early signs of improvement, supported by rebounding pulp prices and announced paper price increases expected to take effect in the second quarter of 2026.
In Latin America, seasonal demand patterns weighed on first-quarter expectations, though price increases in Brazil began to show partial realization in January, with export markets following in February.
North America showed improving supply-demand balance, supported by a sharp decline in imports. Sylvamo communicated price increases to customers, with realization anticipated in the second quarter. The region will nevertheless experience a transitional period in 2026, reflecting the termination of the Riverdale supply agreement and an extended outage at the Eastover, South Carolina, mill tied to strategic investments.
Investment cycle and outlook
Capital spending is expected to peak in 2026 as Sylvamo advances $145 million in high-return projects at its Eastover mill, including paper machine optimization, a new cutsize sheeter, and woodyard modernization.
Management characterized 2025 and 2026 as low points for free cash flow due to ongoing industry headwinds—particularly in Europe—and the concentration of capital investments. As market conditions normalize and projects come online, Sylvamo sees potential to generate more than $300 million in annual free cash flow and achieve returns on invested capital above 15%.
Despite near-term challenges, the company reiterated its commitment to disciplined reinvestment, balance sheet strength and long-term value creation.
Sylvamo is a global paper company with operations in North America, Europe and Latin America. Headquartered in Memphis, Tennessee, the company produces papers used for education, communication and commercial applications. In 2025, Sylvamo reported net sales of $3.4 billion and employed more than 6,500 people worldwide.
Source: Sylvamo
