Sylvamo Corp

NYSE:SLVM

Earnings Call Analysis

Strong Q4 Earnings and Positive Outlook

In 2023, the company generated significant value for shareholders, reporting an adjusted EBITDA of $607 million with a 16% margin and free cash flow of $294 million, translating to over $7 per share. The fourth quarter saw adjusted EBITDA rise to $117 million, surpassing expectations, and created $104 million in free cash flow. Q1 2024's forecasted adjusted EBITDA is set at $105 million to $125 million. Capital investments will focus on enhancing self-sufficiency and reducing wood costs, with an eye on $1 billion in forest land value estimated to rise. Commitment to shareholders continues strong, with a pledge to return at least 40% of free cash flow in 2024.

Steadfast on a Three-Point Strategy

In 2023, the company adhered to a three-point strategy focusing on commercial excellence, operational excellence, and financial discipline, aiming to fortify its standing in the uncoated freesheet market. Management prudently allocated funds to enhance the firm's financial health by reducing debt by $76 million, thus achieving a net debt to adjusted EBITDA ratio of 1.2x.

Investments and Acquisitions

The company not only invested in its operations to the tune of $210 million to bolster its low-cost asset base but also strategically acquired Stora Enso's Nymölla mill in Sweden for $167 million, complementing its asset portfolio with a high-performing mill that added about $50 million in cash generation.

Financial Performance Highlights

For the full year 2023, the company posted adjusted EBITDA of $607 million, maintaining a margin of 16%. Free cash flow was impressive at $294 million, translating to over $7 per share, with a significant 90% of it manifested in the latter half of the year. The adjusted operating earnings stood at $6.51 per share, viewed by management as robust given the challenging market conditions.

Fourth Quarter Dynamics

The fourth quarter saw adjusted EBITDA of $117 million, a margin of 12%, and free cash flow of $104 million. However, during this period, price and mix decreased by $25 million due to earlier price drops and unfavorable mix, particularly in Latin America and North America. There was a mitigating factor with volume improvement by $20 million and a mention of increased planned maintenance outages costs by $25 million.

Optimistic Outlook Amid Seasonal Challenges

Even with the expectation of seasonally weaker demand in the first quarter, particularly in Latin America, the company remains optimistic about current industry conditions showing improvement. For the upcoming quarter, adjusted EBITDA is anticipated to be between $105 million to $125 million, with only a slight decrease in price and mix and volume along with an increase in input and transportation costs.

Capital Spending and Strategic Investments

Looking ahead to 2024, the company has outlined capital spending plans of $125 million to $130 million on maintenance and regulatory spending, with an additional $30 million to $35 million earmarked for high-return projects. Importantly, investments are also being funneled into forest land in Brazil, a significant competitive advantage, with an appraisal uptick of about $600 million compared to the 2021 valuation, sitting at a substantial valuation of around $1 billion.

Commitment to Shareholder Returns

Reinforcing its shareholder-centric approach, management commits to returning at least 40% of free cash flow to shareholders in 2024, displaying confidence in the company's long-term value creation and its investment thesis. The company prides itself on being a cost-effective global producer, armed with strong supply positions, iconic brands, and talented teams, all set to catalyze high returns on invested capital and generate substantial free cash flow.

Earnings Call Transcript 2023-Q4

[Operator]

Good morning, and thank you for standing by. Welcome to Sylvamo's Fourth Quarter 2023 Earnings Call. [Operator Instructions]. Conference is being recorded.

I'd now like to turn the call over to Hans Bjorkman, Vice President, Investor Relations. Sir, the floor is yours.

[Hans Bjorkman, executive]

Thanks, Greg. Good morning, and thank you for joining our fourth quarter and full year 2023 call today. Our speakers this morning are Jean-Michel Ribiéras, Chairman and Chief Executive Officer; and John Sims, Senior Vice President and Chief Financial Officer. .

Slides 2 and 3 contain important information, including certain legal disclaimers. For example, during this call, we will make forward-looking statements that are subject to risks and uncertainties. We will also present certain non-U.S. GAAP financial information. Reconciliations of those figures to U.S. GAAP financial measures are available in the appendix. Our website also contains copies of the earnings release as well as today's presentation.

With that, I'll turn the call over to Jean-Michel.

[Jean-Michel Ribiéras, executive]

Thanks, Hans. Good morning, and thank you for joining our call. Let's turn to Slide 4, please. In 2023, we created value for shareowners by managing what we could control as we executed our 3-point strategy of commercial excellence, operational excellence and financial discipline to strengthen our competitive advantages in our core uncoated freesheet market.

First, we allocated cash to improve our financial position by repaying $76 million in debt achieving a net debt to adjusted EBITDA of 1.2x. Second, we continue to deliver on our investment PP. We earned $607 million adjusted EBITDA, generated $294 million in free cash flow and returned $127 million in cash to share owners. Third, we invested to strengthen our low-cost assets. We invested $210 million and continue to accelerate investments in high-return capital projects.

We also acquired the [indiscernible] Stora Enso's Nymölla mill in Sweden for $167 million. This is a great asset with a talented team. The mill is performing well, and we are benefiting from the 40 million bulk mill modernization project that was completed just before the acquisition. In a tough market, the mill generated about $50 million in cash before any allocated overhead.

Slide 5 highlights our 2023 full year key financial metrics. Our adjusted EBITDA was $607 million, which was a 16% margin. Our $294 million of free cash flow was more than $7 per share. In 2023, our free cash flow was heavily weighted to the second half of the year. We generated almost 90% of free cash flow in the second half. You may recall that in '22, we generated about 75% of our free cash flow in the second half of the year.

Our adjusted operating earnings were $6.51 per share. Regard our '23 financial results as solid considering uncoated cup industry conditions that were more unfavorable than expected. As we enter 2024, we are confident in our ability to continue to create value for our customers and shareowners.

Slide 6 shows our fourth quarter key financial metrics. Adjusted EBITDA was $117 million with a margin of 12%. We generated $104 million in free cash flow as we continue to optimize our working capital. Our adjusted operating earnings were $1.16 per share. These strong performances during challenging industry conditions demonstrate our agility and ability to adapt. I'm proud of how our teams collaborated to meet our customer needs and maximize cash.

Now John will review our fourth quarter performance in more detail. John?

[John Sims, executive]

Thank you, Jean-Michel. Good morning, everyone, and thanks for joining our call. Slide 7 shows our fourth quarter earnings region. Our $117 million of adjusted EBITDA was higher than our outlook of $90 million to $110 million. Let's discuss the changes versus the third quarter.

Price and mix decreased by $25 million largely due to earlier paper price decreases in all regions as well as unfavorable mix in Latin America and North America. Paper prices were stable in the fourth quarter in all regions.

Volume improved by $20 million due to seasonally stronger volume in Latin America and positive trends in both Europe and North America. Operations and other costs increased by $12 million, primarily due to higher seasonal operating costs in Europe and North America as well as unexpected reliability issue with a third-party energy provider at our Saillat mill, which had a $5 million impact. This issue has been resolved, and we're working to recover the full amount. These negative effects were partially offset by lower economic downtime costs versus the third quarter.

Planned maintenance outages costs increased by $25 million with planned outages in all 3 regions. Input and transportation costs improved by $1 million. Driven primarily by favorable chemical costs more than offsetting seasonally high energy costs.

Let's move to Slide 8. Current industry conditions are showing signs of improvement. In Europe and North America, we continue to see improving order books as well as lower import levels. In Latin America, we expect seasonally weaker demand in the first quarter. Keep in mind, in Latin America, historically, demand is sequentially stronger in each calendar quarter. We also expect improving demand for Brazilian exports to other Latin America and offshore markets.

Let's go to Slide 9. We expect to deliver first quarter adjusted EBITDA of $105 million to $125 million. We project price and mix decreased slightly about $5 million to $10 million. In the fourth quarter, we communicated pulp and paper price increases to our European and Latin American customers effective in January. We do, however, expect some price in mix emerging in North America. And as usual, in the first quarter, we expected unfavorable seasonal mix impact on Latin America.

We expect volume to decrease by $10 million to $15 million, reflecting seasonally weaker industry demand quarter in Latin America. Operations and other costs are projected to improve by $20 million, $25 million, primarily reflecting lower economic downtime.

We expect input and transportation costs increased by $5 million to $10 million due to increased transportation costs mostly in North America and higher fiber costs in Latin America. Planned maintenance outages are projected to decrease by $3 million.

Moving forward, we will continue to provide quarterly earnings guidance and selected annual financial metrics assumed on Slide 17 in the appendix. On the advice of our high conviction long-term shareowners, we'll no longer provide full year guidance for earnings or free cash flow. They have encouraged us to discontinue annual guidance and to continue our focus on growing long-term shareholder value. So let's go to Slide 10.

We continue to reinvest to strengthen our low-cost assets and will fund high-return projects to increase our earnings and cash flow. Our 2024 capital spending outlook includes $125 million to $130 million in maintenance and regulatory spending as well as $30 million to $35 million for high-return projects. Our Brazilian forest land are significant -- are a significant competitive advantage. The eucalyptus plantations provide a material cost advantage relative to most other global competitors.

In 2023, we invested $34 million, and this year, we'll invest $35 million of forest land to increase our self-sufficiency and reduce our wood costs. We are also investing $20 million this year, $12 million in 2025 for a 3-year third-party wood supply agreement to assure adequate with supply in 2024 through 2026.

Let's look at Slide 11 for additional detail on our Brazilian forest land. We source the majority of our wood in Brazil from our owned and managed wood and supplement that with open market purchases. Most of our wood needs comes from our forest land, from strategic long-term partnerships.

Our owned and managed wood has the capacity to produce or provide the 80% to 90% of our total wood needs from forest land close to our mill. However, several years of reduced planning, combined with natural causes, largely drought and fires forced us to harvest trees early. These factors increased the amount of market would required to meet our needs. We are currently purchasing about 25% of our wood from the over the market and this wood cost 2 to 3x our owned wood.

The increase in reforestation capital and a 3-year wood supply agreement will enable us to return to about 85% owned and managed wood by 2027.

Let's move to Slide 12. In addition to providing global competitive advantages, our Brazilian forest lands have significantly increased in value. In the fourth quarter, we commissioned a third party to appraise our forest land. In December, they valued at about $1 billion at the current exchange rate. The updated valuation reflects an increase of about $600 million of our 2021 appraisal done by the same firm.

Increasing demand for land and wood in Brazil has driven this increase in valuation. Our forest lands are not only a source of global competitive advantage, but also an enduring repository of shareowner value.

Jean-Michel, I'll now turn it back over to you.

[Jean-Michel Ribiéras, executive]

Thanks, John. I'm on Slide 13. We are a cash flow story. We have generated substantial cash over the past 2 years. And importantly, we returned $90 million in cash to shareholders in '22 and $127 million in 2023. Last year, we also deposited $60 million in escrow, which allowed us to return more than the $90 million limit in our credit agreement. .

Returning cash to shareholders remains a key component of our capital allocation strategy. In 2024, we expect to return at least 40% of free cash flow to shareholders.

Slide 14, please. We are confident in our ability to continue to create long-term shareowner value by executing our strategy and delivering on our investment thesis. We believe in the promise of paper for education, communication, entertainment, and we intend to increase our competitive advantages in the market we sell. We are a low-cost global producer with strong supply position iconic brands and talented teams.

We'll leverage our strengths to drive high returns on invested capital and generate free cash flow. We used that cash to increase shareholder value by maintaining a strong financial position, returning cash to shareowners and reinvesting in our business. We are confident in our future and motivated by the opportunities that lie ahead.

With that, I'll turn the call back to Hans.

[Hans Bjorkman, executive]

Thanks, Jean-Michel, and thank you, John. Okay, Greg, we're ready to take questions. .

[Operator]

[Operator Instructions] Your first question comes from the line of George Staphos from Bank of America.

[George Staphos, analyst]

I'll ask my 2 questions and get back in queue. First of all, I know you're not giving guidance past the first quarter, but how repeatable are the trends and what you're doing in operations and other costs, they seem to have been a source even with some offsets that you talked to -- seem to be a source of positive variance in the fourth quarter for you. It's certainly a positive bridge item in the first quarter. how much longer can that go? And how much is the cost reduction program driving that? That's question number one.

Question number two, to my recollection in the first time in a while that you've talked about the Timberland values in Brazil, given our experience over the years covering the Latin American producers that connection to Timberland is a source of competitive advantage, a source of process improvement. Are you suggesting that over time, this would be something you could disconnect from the portfolio? Or do you see this as a reason why you should be able to maintain your position grow profitably? And either way, not being sort of -- it's being underappreciated within the market. How should we think about what you're trying to say on timberlands here?

[Jean-Michel Ribiéras, executive]

George, I will start by your second question, and John will take the first one. So we thought our timberland is key to our competitiveness and it's really a key advantage. The reason why we updated appraisal is, we think it was undervalued, and that's the only reason. We continue to invest in it. And I think this is a base of exactly, as you mentioned, of long-term competitiveness, which we count on. Our fiber is key in our paper advantage. John?

[John Sims, executive]

Your second question in terms of the ops variance and how much win would we have that going forward. So what we talked about, I think it's important to note is that our order books have improved across all our regions. Sitting here today. In fact, we're running full in both Europe and Lat Am. And with a lot significantly less economic downtime in North America, and that has driven a lot of the operational room because of particular [indiscernible] in the quarter downtime. And we're serving more of the fixed cost that we had in the first half of last year.

Second thing is we are continuing to start to get the benefits of some of this high return cost reduction capital that we started to invest in. We certainly [indiscernible] did so, but we really didn't start ramping that up until next year. And I think third, we talked about our -- what we call Project rise, that's our cost reduction program, it was both operational supply chain and S&A, and we started seeing some benefit of that a little bit. And the first, we expect to see a little bit in the first quarter, but really that's going to really start ramping up through the balance of the year.

[George Staphos, analyst]

John, forgive me, just a point of clarification. You said on the reduction in unabsorbed costs, if I heard you correctly, you're going to see more of that this year or more -- I just want to make sure I heard the cadence on that correct because the phone cut out. .

[John Sims, executive]

Yes. So if you look at even in the fourth quarter, and you'll see in the appendix, we took about 90,000 tons less lack of order downtime in the fourth quarter. And what I said within the first quarter, that is somewhat what's driving the operation outlook that we gave because we're running more full right now in the first quarter than we were even.

[Operator]

Next we'll go to the line of Harman Dhatt from RBC.

[Unknown Analyst]

This is Harman filling in for Matt McKellar. I guess one quick question I had was just around -- and apologies if this was mentioned in the first question. I had some technical difficulties. But with the high-return projects that the company is looking at in '24 ,[indiscernible], are you able to share any incremental details on what sort of things you're pursuing? And how that could shake out in terms of increased margins or even potentially supporting more cost reductions as you outlined with the Project Horizon?

[John Sims, executive]

Yes, Harman, and thanks for joining the call. I'll give you an example of what we have. So -- and this also talks about really the agility, I think, we have as a company because we're singularly focused on long coated region, but there was a large mill that was shut down and South Carolina and Carlston, and it was a large consumer of wood chips. One of the significant cost reduction projects we'll be investing in this year is increasing our capacity to handle chips in our mill at East over. So that we can take advantage of the increased supply now that's come about because of that mill closure. And so those are some of the type of projects we have done. In fact, just recently, we completed a chemical recovery project in East over that has also, we've already started seeing results of pretty significant returns in terms of cost reductions that we started experiencing here even in January.

Typically, these projects that we have, we've targeted almost $30 million of high-return projects. Returns are well over 20% return are much higher than that.

[Unknown Analyst]

Awesome. No, that's great. That's helpful color. And I suppose Just, I guess, more broadly, with the Red Sea crisis, would you be seeing additional European products show up in North America? Given the increased cost of reaching Asian markets from Europe. I guess our last check with the [indiscernible] RESI sort of said that North American outbound shipping costs have been somewhat flat, but inbound or up. So we were just hoping to get some more perspective on there.

[John Sims, executive]

Yes. Harman, it's hard to tell what the implication is going to be in terms of the Red Sea crisis? What we are seeing right now in Europe is decrease in imports. And some of the transit time of coming from Asia it's almost increased about 4 weeks, we understand for imports from Asia to get into the Europe. So it could have an impact that absolutely decreased import in Europe, which then means that more domestic supply has to be stay onshore to serve that need.

But I would say right now, it's hard to tell with the impact of that Red Sea is going to be. It's certainly an increase in freight costs. So all exporters are seeing increased freight cost as well as fleet cost.

[Jean-Michel Ribiéras, executive]

And concerning what you were asking about Europe, export overseas, we export very little from Europe to overseas. We -- our production in Europe mostly remain in Europe and we have a very few going to Middle East Africa. So it's really not impacting us so far significantly. .

[Operator]

Next, we'll go back to the line of George Staphos from Bank of America.

[George Staphos, analyst]

Just on that point, it was raised just before. Right, know you aren't really quantifying it, but is the impact from Asia, if there is a positive on reduced imports into Europe more on converted products or more on cut size and graphic papers overall? That in turn is leading to better demand for you and/or your customers?

[John Sims, executive]

Mostly, I would say, George, cut size, this was easier to export that mostly you see from Asia are cut size. And the whole on the offset business because of the various sizes that you have to have, it's much more difficult for any next exporter. That matter not just to Asia export. Not that there will be the world from the commercial credits

[George Staphos, analyst]

Okay. And John, Jean-Michel, my next question, and then I'll come back in queue again. related point. So to the extent that we've seen pulp prices continue to rise in Europe, recognizing Asia, we're starting to see them fade a bit. Has that cost curve -- or let me say it differently, has the cost curve shifted sufficiently where that's also beginning to have an impact on supply within Europe, i.e. the curve shifted some of your nonintegrated peers are having some difficulty producing? Or really that's not really having much of an effect at this juncture from what you can see?

[Jean-Michel Ribiéras, executive]

I think, George, it's a good question. I think it's impacting from the trough. The pulp prices in Europe have gone up EUR 160 from last year after today. So it is, for sure, impacting the nonintegrated players in Europe, and that's maybe one of the reason why we're seeing operating rates back up in Europe and having a very strong demand. It might impact it. We also know the inventory correction in Europe is beyond us and the industry inventory are quite blue actually, [indiscernible] paper. So multiple factors but pulp price has an impact.

[George Staphos, analyst]

Yes. Jean-Michel, ultimately, look, I realize it's our job, not yours, but to the extent that you have a view on this, is there kind of a view in terms of how much now is kind of in the red in terms of industry production relative to the cost curve? And if you don't have a view, that's fine, I just thought I'd ask if you had any new talk to share here.

[Jean-Michel Ribiéras, executive]

I don't, but I would -- I don't have the number precisely. So all I can make is maybe a guess, a very high-level guess, and it might be about 10%.

[Operator]

[Operator Instructions] And we'll go back to the line of George Stoffels.

[George Staphos, analyst]

To the extent that there's been some pricing reductions in North America as memory serves, at least in terms of published indices. How much of that, if you can quantify, recognizing you're not tied to RESI in your contracts per se. But how much of that is baked into your guidance, if anything at all for the first quarter? And to the extent that you could size it broadly, how much would be something we need to make sure we model for over the rest of the year, recognizing you're not guiding on 2Q to 4Q?

[Jean-Michel Ribiéras, executive]

So George, I cannot give you an exact price, but I can give you a trend. We saw the same RESI report you did. As you mentioned it, we do not report to our pricing to RESI. I would say on the trend, we might have the direction correct. But we have seen in the past and in absolute value, we see it differently. .

So in our outlook, mostly from third quarter, actually, we expect slight erosion in North America, not a huge one, a slight one. And at the same time, we expect -- because of 2 price increases we announced to our customers in Europe and in Brazil and Lat Am, we expect price increase on the other regions.

[George Staphos, analyst]

Okay. And then back to Europe, and I'll turn it over. The performance for the quarter was somewhat below our expectations now, that's not here or there. That's our forecast versus your actual. But was performance in Europe as you had expected in terms of that loss? And what -- if we -- again, you're not guiding for the full year, but should we expect that ultimately, Europe should be breakeven or better for this year? And what are the bigger bridge items to get you there if, in fact, that's your assumption?

[Jean-Michel Ribiéras, executive]

Yes. So '23, as you know, in Europe, was difficult. It was a trough in terms of demand. The prices of pulp, which affected our Saillat Mill went down. We had an annual outage in Saillat, which costed us $20 million. We had an annual outage in the fourth quarter in Nymölla. We had an issue with the turbine we mentioned in the Saillat mill, which is over now, which costed us $5 million. And it was really the trough of the cycle in terms of prices. .

So we clearly see '24 rebounding significantly and hope to very soon be talking about positive earnings for Europe. So we're quite positive about Europe. It's more cyclical than any other businesses. So sometimes it's a bit frustrating. But on average, we really believe Europe would be good. Nymölla performing very well. Saillat is performing well. Our order book, as I mentioned, is food, and we've seen price increasing. So Europe is rebounding significantly. It's a tailwind for '24.

[John Sims, executive]

George, just to add on to that, you can say that it was a trough, but it was significant. If you think about in terms of the demand decline that we had in Europe, it was even worse than COVID. When we forget how much volume and shipments were down. And also pulp prices [indiscernible] 1/3 of its capacity is pulp. So it is to a certain extent, more exposed to the cyclical pulp prices than our other mills. But as Jean-Michel said and we said earlier, we're currently running full right now in Europe. And so that's a very positive. We also have prices going up, both in paper and pulp for the reason. The thing that's helped us with pulp prices going up, already almost $160 per ton verses this trough would indicate that Europe would be better this year. .

[Operator]

Next, we'll go back to the line of Harman Dhatt from RBC.

[Unknown Analyst]

I just had a couple of quick follow-ups on the cost reduction plan. And apologies if it was mentioned earlier, had some technical difficulties at the start of the Q&A. But for -- just had a quick clarify, that $15 million reduction in overhead expenses, is that factored into your $110 million target? Or is this on top of it? And I suppose, secondly, will there be an update to the prior inflation assumption? I believe it was around $50 million with the Q3 results.

[John Sims, executive]

Yes, Harman, the $15 million that we reported for the fourth quarter is additive, it was not included in the $110 million target that we talked about. But we pointed the third quarter. And we -- the inflation number that we provided, you're correct, it was $50 million, and that won't be updated. That we're still -- that's still a good number. .

[Operator]

Next, we'll go back to the line of George Staphos.

[George Staphos, analyst]

Last one for me. Now you're not the only company in South America that's talked about having to go farther from its own mills for wood and do a bit more third-party wood. And although the company in particular, I'm thinking of is more packaging grade production. But is there a broader issue that's been affecting the producers? Has it been just the drought? Or has there been something else that's gone on either in terms of maybe overharvesting or underinvesting that not just for Sylvamo you've seen elsewhere? Just some quick thoughts there and I'll turn it over.

[Jean-Michel Ribiéras, executive]

I think you -- some of our competitors talked about the same thing we did on some plantations about 6 to 7 years ago, where -- whose plantation have suffered under the 7-year cycle of drug, natural causes, which have impacted that has impacted all Brazilian forestry plantations. So we're not the only one. This is not the case anymore, but it's been 2 years. And we also specifically more significantly from our past companies reduce some of our investments in the first 3 during [indiscernible] those years, which we are -- it's a 6-, 7-year cycle. So we're seeing the impact of that now which is why we've had to go more outside market than we usually do, and we wanted to solidify the need of wood because there is a strong demand of wood in Brazil right now. So the demand is clearly strong. So the demand plus the natural causes, which have reduced the productivity of plantation is an impact we're feeling and our strategic investment in the very valuable forest plant, we have -- we'll make up for that.

[George Staphos, analyst]

I mean we're starting to see a little bit of an uptick in South America overall and box shipments. Obviously, that's a bit more softwood. But to the extent that we see a bit of a rebound there does that put your wood position maybe make it a bit more precarious and mean that next quarter or a quarter down the road, you're talking about further inflation that you're contending with? Or are you as much as you're relatively well set for the rest of the year?

[Jean-Michel Ribiéras, executive]

With the investments we've made, we feel like we're well set.

[Operator]

And at this time, there are no further questions. I'd now like to turn the call back to Hans Bjorkman for any closing comments.

[Hans Bjorkman, executive]

Thanks, Greg. Before we wrap up the call, Jean-Michel, any closing comments?

[Jean-Michel Ribiéras, executive]

Yes. Just thank you, first of all, for joining the call. We are a cash flow story. In '23, we generated $294 million in free cash flow. And returned $127 million to shareholders. We allocate capital to increase shareowner value. We use cash to maintain a strong balance sheet, return cash to shareholders and invest to strengthen our business, and we are confident in our ability to generate strong earnings and free cash flow through the cycle. We are confident for 2024.

[Hans Bjorkman, executive]

Thank you, Jean-Michel, and thanks, everyone, for joining us today. We appreciate your interest in Sylvamo, and we look forward to continued conversations in the coming weeks and months ahead. Thank you so much. .

[Operator]

Once again, we would like to thank you for participating in Sylvamo's Fourth Quarter 2023 Earnings Call. You may now disconnect.