IP Reports Strong Corrugated Demand
Flexo Market News
Corrugated packaging and containerboard demand remained “very strong” in the second quarter of the year, according to International Paper (IP), a Memphis, Tennessee-based global producer of fiber-based pack- aging, pulp and paper products. “In our papers business, demand recovery accelerat- ed in the second quarter across our key geographies,” said Mark Sutton, Chairman and Chief Executive Offi- cer of International Paper, during the company’s sec- ond-quarter earnings call July 29.“We grew revenue by 15 percent as compared to the second quarter of last year with price realization accelerating in all of our business segments. Our mills and converting system performed well.” IP reported that it achieved second-quarter net earn- ings of $432 million, about $1.09 per diluted share, compared with $349 million, 88 cents per diluted share, in the first quarter of the year and $266 million, or 67 cents per diluted share, in the second quarter of 2020. Second-quarter adjusted operating earnings were at $421 million, or $1.06 per diluted share, compared with $299 million in the first quarter of the year and $305 million in the second quarter of 2021. “We see the rise in OCC cost as a reflection of the underlying strength in global demand for corrugated packaging.” -- Tim Nicholls, Senior Vice President and Chief Operating Officer, International Paper. Second-quarter cash provided by operations was $766 million, and year to date cash totaled $1.3 billion compared with $1.5 billion in the same time frame of 2020.Additionally, the company had a debt reduction of $796 million in the quarter, bringing its debt reduc- tion to date to $904 million. Tim Nicholls, Senior Vice President and Chief Finan- cial Officer at International Paper, added that old cor- rugated containers (OCC) represented about half of the sequential increase in the company’s input costs. IP reported that its joint venture with Ilim Group, which operates major Russian pulp & paper mills, joint venture equity yielded earnings of $101 million in the second quarter of the year, bringing year-to-date earn- ings for that business segment to $150 million.The in- creased earnings for this segment were driven by high- er export and domestic sales prices for softwood pulp, hardwood pulp and containerboard. The company also monetized its remaining invest- ment in Graphic Packaging for about $400 million. In the second quarter of the year, IP’s Industrial Pack- aging operating profits were at $408 compared with $447 million in the first quarter of the year.
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12 August 16, 2021 Flexo Market News
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