Memphis, Tennessee based International Paper announced expectations to finalize its combination with DS Smith in the first quarter of 2025 along with third-quarter earnings exceeding expectations and closure of a mill in Georgetown, South Carolina.
Highlights from third quarter results include net earnings of $150 million; adjusted operating earnings of $153 million, cash provided by operations of $521 million with $161 million returned to shareholders in dividends.
“Higher prices across the portfolio, including benefits from our packaging go-to-market strategy were supported by a moderately improving box demand environment. We also had higher operating costs and lower volumes due to seasonality and commercial actions to improve profitability,” said Chairman and CEO Andy Silvernail.
Silvernail said IP is laser-focused on delivering profitable growth as the low-cost, most reliable and innovative sustainable packaging solutions provider.
“We are deploying an 80/20 approach to strategically align resources to become excellent with our customers, while reducing complexity and cost across the company. This includes organizational restructuring and corporate cost reductions, as well as investments to strengthen our most competitive and strategic assets, paired with facility closures to structurally reduce operating costs,” he said.
“In addition, we are exploring strategic options for our Global Cellulose Fibers business. We recognize the impact of these difficult decisions and are providing support for team members who are affected. As we look forward to the combination with DS Smith, we expect the transaction will close early in the first quarter of 2025. Overall, I’m confident that our transformational journey will unlock substantial value at IP and strengthen the company for our employees, customers and shareholders.”
In its Industrial Packaging business segment, IP reported third-quarter operating profit (loss) of $197 million compared with $291 million in the second quarter of 2024. In North America, business segment operating profit (loss) decreased as higher sales prices for boxes and containerboard were more than offset by seasonally lower sales volumes, higher operating costs, and higher planned outage costs, IP said.
IP also announced the permanent closure of its Georgetown, South Carolina mill. The mill will shut down in stages with a full closure expected by the end of 2024.
The Georgetown mill produces approximately 300,000 tons of fluff pulp designed for a range of consumer applications from baby diapers to incontinence products. GCF plans to retain 100 percent of the mill’s fluff pulp capacity by transferring production to other mills and further reducing the IP’s exposure to commodity pulp grades, IP said. The mill also produces uncoated freesheet papers that it sells to Sylvamo pursuant to a strategic contract, which IP and Sylvamo have mutually agreed to terminate as of December 31.
In total, 526 hourly employees and 148 salaried employees will be impacted and all employees will be offered severance benefits, outplacement services and access to mental health resources, IP said.
