Tariff Trouble: Rayonier Advanced Materials Braces For $3.5M Monthly Loss Due To New 25% Paperboard Tax

Zinger Key Points

Rayonier expects a $3.5M monthly hit from the 25% tariff on Canadian paperboard exports to the U.S.
Despite a $43M loss, Rayonier saw a 60% increase in adjusted EBITDA, driven by strong Cellulose Specialties performance.
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Rayonier Advanced Materials Inc. RYAM announced its preliminary financial results for the fiscal year ended December 31, 2024.

Net sales for 2024 were $1.639 billion, down slightly by $4 million from the previous year. The analyst consensus estimate pegs at $1.626 billion.

Looking ahead, Rayonier expects a moderate increase in average sales prices for its Cellulose Specialties products in 2025, although sales volumes are anticipated to decline due to the suspension of its Temiscaming High Purity Cellulose plant.

The company is also actively assessing the potential impact of a 25% tariff on Canadian paperboard exports to the U.S., which could cost up to $3.5 million per month.

Also Read: Trump, Trudeau Strike Border Security Deal, Tariffs On Canada Paused For ‘At Least 30 Days ‘

The company reported a loss from continuing operations for 2024 of $43 million, though this was an improvement of $59 million compared to 2023. Adjusted EBITDA saw a significant increase, rising 60% to $222 million, reflecting operational enhancements and a favorable market environment in the Cellulose Specialties business, especially at the end of the year. Adjusted EBITDA margin also improved, reaching 13.5% from 8.5% in 2023.

Cash flow also showed strong performance, with cash provided by operating activities increasing by $69 million to $205 million. Adjusted free cash flow rose to $130 million, a gain of $77 million year-over-year.

Rayonier’s net secured leverage stood at 2.7x, well below its covenant of 5.0x.

Despite this, Rayonier remains confident in its ability to cover all fixed charges, including maintenance capital and interest expenses.

Price Action: RYAM shares closed lower by 3.75% to $7.70 on Monday.

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