JACKSONVILLE, Fla. - Rayonier Advanced Materials Inc. (NYSE: NYSE:RYAM), a company specializing in high purity cellulose, announced today that its Jesup, Georgia plant has successfully returned to full production ahead of schedule after an isolated fire incident on October 11. The facility has resumed producing high-quality materials at full capacity, the company stated.
President and CEO De Lyle Bloomquist expressed satisfaction with the swift recovery, attributing the quick return to operational status to the hard work of the company’s teams. He emphasized their commitment to fulfilling customer demands without delay.
The financial repercussions of the fire are still being evaluated by RYAM, including the extent of insurance coverage. The company plans to disclose more detailed information in its upcoming third-quarter earnings call on November 6.
RYAM operates globally, focusing on cellulose-based technologies, which are essential in various industries such as food, pharmaceuticals, and industrial applications. The company's production is also directed toward biofuels, bioelectricity, and other biomaterials, as well as the paper and packaging sectors. With facilities in the United States, Canada, and France, RYAM reported revenues of $1.6 billion in 2023.
This update is based on a press release statement. Further details about the company's performance and future expectations are likely to be shared during the next earnings call. RYAM has not committed to any specific outcomes as a result of the fire and has cautioned against relying heavily on forward-looking statements, which are subject to various risks and uncertainties. The company's filings with the U.S. Securities and Exchange Commission, including annual and quarterly reports, provide additional context and information about its operations and risk factors.
In other recent news, Rayonier (NYSE:RYN) Advanced Materials reported a fire at its primary production facility in Jesup, Georgia, during planned maintenance. The company's emergency response teams and local firefighters swiftly contained the fire, ensuring no injuries or community risks. While the facility's C line is operational, the A and B lines are expected to be offline until repairs are completed, particularly to instrumentation and electrical systems affected by the fire. The financial implications of the incident are being evaluated, with an estimated EBITDA impact of $15 to $20 million, pending insurance recovery.
In another development, Altamaha Green Energy, a joint venture between Beasley Green Power and Rayonier Advanced Materials, has secured a deal to supply up to 70 megawatts of electricity to Georgia Power Company. The deal, part of a renewable energy project, aims to convert forestry waste into sustainable electricity.
Rayonier Advanced Materials has also seen an upgrade from RBC Capital Markets, which raised its shares price target to $10.00 and maintained an Outperform rating. The company announced a price increase for its Cellulose Specialties products due to ongoing market dynamics and escalating costs. Lastly, the company's second-quarter earnings for 2024 showed a 152% surge in Adjusted EBITDA, leading to an increase in its full-year EBITDA and adjusted free cash flow guidance.
InvestingPro Insights
As Rayonier Advanced Materials Inc. (RYAM) navigates the aftermath of the fire incident at its Jesup, Georgia plant, InvestingPro data provides additional context to the company's financial landscape. Despite the recent operational challenge, RYAM has demonstrated remarkable resilience in its stock performance. The company has seen a strong return over the last three months, with a price total return of 21.52% for the period. Even more impressive is the six-month price total return of 93.56%, indicating significant investor confidence in the company's prospects.
However, it's important to note that RYAM faces some financial headwinds. An InvestingPro Tip reveals that the company suffers from weak gross profit margins, which is reflected in the data showing a gross profit margin of 7.58% for the last twelve months as of Q2 2024. This metric may be of particular interest to investors as RYAM assesses the financial impact of the recent fire incident.
Another InvestingPro Tip highlights that analysts do not anticipate the company will be profitable this year. This aligns with the reported basic EPS (Continuing Operations) of -$1.25 for the last twelve months as of Q2 2024. As RYAM prepares for its third-quarter earnings call, investors will likely be keen to understand how the company plans to address these profitability challenges.
For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and insights that could provide valuable context to RYAM's current situation and future outlook.
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