International Paper has reported its financial outcomes for the second quarter of 2024. Reflecting on the company’s performance, chief executive officer Andy Silvernail shared his optimism about the future: “Reflecting on my first 90 days, I am confident in our teams’ ability to unlock substantial value at IP”, Silvernail remarked. He noted that while the second quarter results showed sequential growth due to better pricing and seasonally higher volumes, the near-term outlook remains challenging. To enhance performance, the company is implementing an 80/20 business process aimed at focusing the portfolio, improving customer relations, and optimizing costs for profitable growth. Silvernail emphasized: “We will make the changes needed to focus our portfolio, become excellent with our customers and optimize our cost to deliver profitable growth”. He also highlighted the company’s focus in North America on providing reliable and innovative packaging solutions and expressed excitement about the upcoming combination with DS Smith, which he believes will create significant value for shareholders.
In the Industrial Packaging segment, the operating profit for the second quarter of 2024 reached US$291 million, up from US$216 million in the first quarter of 2024. The North American market saw an increase in operating profit, driven by higher sales prices for boxes and containerboard, benefiting from the company’s commercial strategies. Sales volumes rose, partly due to one additional shipping day in the quarter. The segment experienced lower planned outage costs but faced higher operating costs due to investments in improving reliability, though this was partially offset by the absence of costs related to the previous Ixtac, Mexico fire. While input costs decreased thanks to lower energy and raw material costs, there was a partial offset from higher recovered fiber costs. In the EMEA region, the segment’s operating profit declined due to seasonally lower volumes and increased planned outage costs.
The Global Pulp Fibers segment reported an operating profit of US$31 million for the second quarter of 2024, a significant improvement from a loss of US$47 million in the first quarter of 2024. This improvement was attributed to higher average sales prices for fluff and paper and tissue grade pulp, lower operating costs, and reduced planned outage costs. Although input costs remained stable, lower energy costs were balanced by higher costs for chemicals and wood.
