Rayonier Advanced Materials announces net income up in Q3
By P&PC Staff
By P&PC Staff
November 6, 2018 – Rayonier Advanced Materials has announced its third-quarter results, citing a 2018 net income of $38 million, or $0.60 per diluted common share, compared to $16 million, or $0.28 per diluted common share in the third quarter of 2017.
Year-to-date 2018 net income was $116 million, or $1.82 per diluted common share, compared to $30 million, or $0.46 per diluted common share for the first nine months of 2017. Earnings for both the third quarter and year-to-date 2018 periods increased due to the November 2017 acquisition of Tembec Inc.
Third quarter 2018 adjusted net income was $35 million, or $0.54 per diluted common share, compared to $10 million, or $0.18 per diluted common share in the third quarter of 2017. Year-to-date adjusted net income was $98 million, or $1.53 per diluted common share, compared to $28 million, or $0.42 per diluted common share in 2017.
“Our solid results this quarter allowed us to invest in high-return strategic capital projects, repay debt and return capital to shareholders,” says Paul Boynton, chairman, president and chief executive officer. “With our strong position in high-purity cellulose, a positive outlook in the pulp markets, and significant cash generation, we remain committed to our execution focus and opportunities to return capital through share repurchases.”
For high-purity cellulose, operating income for the three-month period ended September 29, 2018 increased $4 million driven by the operating income from the Tembec acquisition. Operating income decreased $13 million for the nine-month period ended September 29, 2018 over the comparable 2017 period as lower cellulose specialties prices and higher chemical and energy costs from Rayonier’s historical operations were offset by the operating income from the Tembec acquisition.
On a combined basis, operating income for the three and nine month periods ended September 29, 2018 decreased over the comparable 2017 periods by $16 million and $60 million, respectively. These decreases were primarily driven by the expected decrease in cellulose specialties sales prices and volumes combined with higher chemical, energy and wood costs. Additionally,the 2018 three- and nine-month periods were negatively impacted by $2 million and $3 million, respectively, for the company’s share of the new lignin joint venture loss. The increased costs were partially offset by transformation and synergy savings during the periods.
For pulp, operating income for the three- and nine-month periods ended September 29, 2018 increased over the comparable 2017 periods by $26 million and $75 million, respectively, driven by the Tembec acquisition. On a combined basis, operating income for the three and nine month periods ended September 29, 2018 increased $10 million and $44 million, respectively, primarily due to higher high-yield pulp prices of 17 and 27 per cent, respectively.
Read the full report here.