RYAM Reports Strong Preliminary 2024 Financial Results and Shares Tariff Update
Rayonier Advanced Materials, a global leader in High Purity Cellulose, has announced its unaudited preliminary financial results for the fiscal year ended December 31, 2024. Additionally, the Company has provided an update on the potential impact of tariffs on its operations. These results remain subject to the completion of RYAM’s fiscal year financial audit.
Financial Performance Overview
RYAM reported total net sales of $1.639 billion for 2024, reflecting a slight decline of $4 million compared to the prior year. Despite this marginal decrease, the Company demonstrated strong improvements in profitability and cash flow due to operational efficiencies and strategic initiatives.
The loss from continuing operations improved significantly to $43 million, marking a $59 million positive shift from the previous year. This improvement underscores the Company’s efforts in optimizing operations and cost structures.
Adjusted EBITDA saw a substantial increase, rising to $222 million—a 60% improvement from the $139 million reported in 2023. This growth was attributed to operational enhancements, a favorable supply-and-demand environment in the core Cellulose Specialties business, and strong shipment volumes, particularly towards the end of the year.
The Adjusted EBITDA margin expanded to 13.5%, compared to 8.5% in 2023. This increase was primarily driven by an improved sales mix that favored Cellulose Specialties, reduced unit production costs, and targeted cost-saving initiatives that enhanced operational efficiency.
Cash flow performance was also strong, with cash provided by operating activities reaching $205 million, up by $69 million from the prior year. Adjusted free cash flow rose to $130 million, representing a $77 million year-over-year increase.
In terms of financial stability, the Company’s net secured leverage improved to 2.7x covenant EBITDA, well below the covenant threshold of 5.0x. Additionally, net secured debt was reduced by $73 million in 2024, reinforcing RYAM’s commitment to strengthening its balance sheet.
Outlook for 2025
Looking ahead, RYAM anticipates continued strength in its Cellulose Specialties segment. The Company projects that the average sales price for Cellulose Specialties products will increase by a mid-single-digit percentage in 2025, aligning with its strategic focus on “value over volume.” However, total sales volumes are expected to decline due to the indefinite suspension of operations at the Témiscaming High Purity Cellulose plant. Despite this anticipated reduction in volume, total revenue for 2025 is expected to remain relatively flat compared to 2024 levels.
RYAM remains confident that its focus on higher-value products, operational improvements, and disciplined cost management will continue to drive financial performance and position the Company for long-term success.
Tariff Considerations and Impact Assessment
One of the key external challenges RYAM faces is the potential impact of tariffs on its Canadian-derived revenues. In 2024, approximately 11% of the Company’s total revenues were generated from Canadian Paperboard exports to the United States. Given the evolving trade landscape, RYAM has been actively assessing the risks associated with new tariff measures and exploring strategies to mitigate their financial impact.
Since late 2024, the Company has been implementing proactive measures to offset the potential effects of tariffs. If the proposed 25% tariff on Canadian shipments to the U.S. is enacted, RYAM estimates an impact of up to $3.5 million per month while the tariffs remain in place. Despite this potential cost burden, the Company remains confident in its ability to cover all fixed charges, including maintenance capital and interest expenses, even under the proposed tariff conditions.
RYAM continues to monitor the situation closely and is actively engaging with industry stakeholders and regulatory bodies to navigate these challenges effectively. The Company is committed to making necessary adjustments to ensure financial stability and operational resilience in light of potential policy changes.
RYAM’s preliminary 2024 financial results underscore its ability to navigate market dynamics effectively while achieving significant improvements in profitability, cash flow, and overall financial health. The Company’s strategic focus on operational efficiencies, cost reduction, and a shift towards high-value cellulose products has positioned it well for sustained growth in 2025.
While uncertainties related to tariffs remain, RYAM has demonstrated proactive risk management and financial discipline, ensuring that it remains resilient amid evolving trade policies. Additional insights and detailed financial disclosures will be provided during the Company’s upcoming earnings call, where management will discuss key strategies and outlooks for 2025 and beyond.
