April 27, 2023 - International Paper today reported first quarter 2023 financial results.
"International Paper operated well in the first quarter, while navigating a challenging and dynamic macro environment," said Mark Sutton, Chairman of the Board and Chief Executive Officer. "We successfully executed our highest maintenance outage quarter and realized additional benefits from our Building a Better IP initiatives and lower input costs. We also returned $319 million to shareowners."
"Looking ahead," Sutton added, "we expect the demand environment to improve throughout the year as customer inventory destocking runs its course. We remain focused on serving our customers' needs, while optimizing our system to drive out high marginal costs and maximizing value for our stakeholders."
Business segment operating profits are used by International Paper's management to measure the earnings performance of its businesses and is calculated as set forth in footnote (e) below under "Sales and Earnings by Business Segment". First quarter 2023 net sales by business segment and operating profit (loss) by business segment compared with the fourth quarter of 2022 and the first quarter of 2022 are as follows:
Industrial Packaging operating profits (losses) in the first quarter of 2023 were $322 million compared with $416 million in the fourth quarter of 2022. In North America, earnings decreased as lower input costs, primarily for recovered fiber and energy, were more than offset by lower revenue and higher planned maintenance outage expenses. Sequentially, revenue decreased as a result of lower sales prices for corrugated boxes and containerboard offset by some additional volume benefit from four more shipping days. Operating costs were higher in the first quarter of 2023 due to the non-repeat of favorable one-time items for employee benefit costs and medical claims. In EMEA, earnings improved driven by lower energy and containerboard costs.
Global Cellulose Fibers operating profits (losses) in the first quarter of 2023 were $(16) million compared with $35 million in the fourth quarter of 2022. Higher sales prices for fluff pulp was more than offset by overall lower sales volumes and a less favorable mix of lower fluff volumes and higher commodity volumes. Lower input costs, primarily for energy, were offset by higher planned maintenance outage expenses. Operating costs in the first quarter of 2023 were higher reflecting the impact of increased economic downtime and inflation and the non-repeat of favorable one-time items for employee benefit costs and medical claims in the fourth quarter of 2022.
On January 24, 2023, the Company announced an agreement to sell its investment in the Ilim joint venture, subject to regulatory approvals. The Company recognized a $533 million impairment charge including $375 million of foreign currency cumulative translation adjustment loss in the fourth quarter of 2022. In the first quarter of 2023, the Company recognized an additional $43 million impairment charge including approximately $43 million of foreign currency translation adjustment loss. Equity earnings (losses), excluding impairment, were $43 million in the first quarter of 2023 compared with $44 million in the fourth quarter of 2022. 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 first quarter 2023 financial results report can be found on the company's website: www.internationalpaper.com.
International Paper (NYSE: IP) is a global producer of planet-friendly packaging, pulp and other fiber-based products, and one of North America's largest recyclers. Headquartered in Memphis, Tennessee, IP employs approximately 39,000 colleagues globally.
SOURCE: International Paper
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