Clearwater Paper announces 2024 financial results and highlights strategic transformation
Sale of tissue business and renewed focus on paperboard mark a year of change for the company
Clearwater Paper Corporation, one of the leading independent suppliers of bleached paperboard to North American converters, released its financial results for the fourth quarter and year ended December 31, 2024. The financial performance reflects a year of strategic transformations, with the company finalizing the sale of its tissue segment on November 1, 2024 and focusing its operations on the paperboard market.
Among the main achievements of 2024 was the acquisition of the Augusta, Georgia paperboard unit on May 1, which increased the company’s paperboard production capacity by almost 75%. This acquisition also improved Clearwater Paper’s geographical presence in North America, consolidating its position in the sector. On the other hand, the sale of its tissue business for US$1.06 billion was an important milestone, allowing the company to use the proceeds to reduce its debt and reposition its operations for sustainable growth in paperboard.
Total net sales from Clearwater Paper’s continuing operations reached US$1.4 billion in 2024, an increase of 22% compared to the previous year, mainly driven by the acquisition of the Augusta unit. However, the company recorded a net loss of US$74 million from continuing operations, which represents a reversal from the net profit of US$49 million in 2023. This result was impacted by the drop in paperboard prices and planned maintenance at its Augusta facility. In contrast, net income from total operations was US$196 million, or US$11.70 per diluted share, due to the US$ 307 million gain from the sale of the tissue division.
Adjusted EBITDA from total operations also fell significantly, from US$281 million in 2023 to US$182 million in 2024. The reduction was attributed to various factors, such as lower paperboard prices, high maintenance costs and the sale of the tissue business. The company also managed to reduce its net debt by US$199 million, as well as carrying out a share buyback worth US$10 million.
CHALLENGES AND OUTLOOK FOR 2025
Despite the challenging results in the short term, Clearwater Paper remains optimistic about the growth prospects for the paperboard packaging market. The company is facing adverse conditions in the SBS (Sulfate Bleached Stock) sector, with supply outstripping demand, but is betting on implementing strategic actions to deal with the pressure on margins. One of these measures is the reduction of fixed costs, which includes the elimination of more than 10% of all positions in the company. These initiatives should generate estimated savings of between US$30 and US$40 million by 2025.
With a renewed focus on paperboard and continued investments in its operations, Clearwater Paper is determined to remain competitive in the long term, even in the face of the current downturn in the sector. The company believes that by concentrating its efforts on paperboard packaging, it can continue to grow and stand out in the market.
