Sylvamo Reports First-Quarter Net Loss Amid Capacity Constraints and Higher Costs

Sylvamo reported a net loss of $3 million for the first quarter of 2026, compared with net income of $33 million in the previous quarter and $27 million in the year-earlier period, as the paper producer faced lower sales volumes, operational challenges and higher costs tied to strategic investments and supply chain adjustments.

The company posted first-quarter net sales of $755 million, down from $890 million in the fourth quarter of 2025 and $821 million a year earlier. Adjusted EBITDA totaled $29 million, representing a 4% margin, while free cash flow was negative $59 million.

Chief Executive Officer John Sims said 2026 remains a “transition year” as the company manages short-term capacity constraints following the end of the Riverdale supply agreement and prepares for an extended outage at its Eastover, South Carolina, mill tied to strategic investments.

Sylvamo said its Eastover paper machine optimization project remains on schedule for completion during a planned maintenance outage in the fourth quarter of 2026. The company also said a new cutsize sheeter is expected to be installed in the third quarter and ramp up during the fourth quarter, while the hardwood line of its woodyard modernization project is already operating. The softwood operation is expected to begin in the first quarter of 2027.

To support customers during the transition, Sylvamo imported paper from its European mills and used third-party converting vendors, which increased costs and reduced first-quarter sales volumes. The company later shifted some imports to Brazil following changes in U.S. tariff rates, a move it expects will reduce 2026 North America transition costs by about $20 million at current tariff levels.

The company declared a quarterly dividend of $0.45 per share, paid on April 28, and said it refinanced debt due in 2027 to extend its maturity profile.