International Paper Reports Second Quarter 2023 Results
“In the second quarter, the operations of International Paper continued to run well and we managed our businesses effectively in a challenging demand environment” – Mark Sutton, Chairman and CEO
In its second quarter 2023 financial results, International Paper reported net earnings of $235 million and adjusted operating earnings (non-GAAP) of $204 million. The company also reported cash provided by operations of $528 million, bringing year-to-date to $873 million and free cash flow (non-GAAP) of $265 million year-to-date 2023.
According to the company, $55 million of earnings were achieved from Building a Better IP initiatives, bringing year-to-date to $120 million. It also returned $200 million to shareholders through $40 million share repurchases and $160 million in dividends, bringing year-to-date to $519 million.
“In the second quarter, the operations of International Paper continued to run well and we managed our businesses effectively in a challenging demand environment,” said Mark Sutton, Chairman and Chief Executive Officer. “We continued to advance our Building a Better IP initiatives, including our commercial improvement and cost management opportunities. The benefits of that work and our strong financial foundation position International Paper well as we navigate the current economic environment.”
IP reported that Global Cellulose Fibers operating profits (losses) in the second quarter of 2023 were $30 million compared with $(16) million in the first quarter of 2023. Earnings improved in spite of lower sales of fluff pulp and decreased pulp pricing in a challenging global market environment impacted by customer inventory destocking as supply chain conditions improved. The earnings improvement was driven by lower operating costs, planned maintenance costs and input costs, primarily for chemicals and energy.
EQUITY METHOD INVESTMENT – ILIM JOINT VENTURE
On January 24, 2023, the company announced an agreement to sell its investment in the Ilim joint venture, subject to regulatory approvals. The company initially recognized an impairment charge of $533 million including approximately $375 million foreign currency cumulative translation adjustment loss in the fourth quarter of 2022. Through the second quarter of 2023, the company recognized an additional $76 million impairment charge.
Equity earnings (losses), excluding impairment, were $46 million in the second quarter of 2023 compared with $43 million in the first quarter of 2023. The current period and historical results have been adjusted to reflect Ilim as a discontinued operation and our investment balance, following the adjustment to fair value and resulting impairment charges, is included in Assets Held for Sale.
International Paper’s complete second quarter 2023 report can be found on the company’s website: www.internationalpaper.com.
