- Essential business committed to the health and safety of our employees and serving our customers.
- Taking prudent actions to further strengthen liquidity.
- Strong immediate demand for corrugated packaging and pulp; significant demand decline
for printing papers.
"International Paper had a solid first quarter in a rapidly changing environment as the impact of the COVID-19 pandemic and containment measures accelerated," says Mark Sutton, chairman/CEO. "International Paper entered this crisis in a position of strength due to our committed employees, our diverse customer base, our world-class manufacturing and supply chain capabilities and solid financial footing. Given the unprecedented uncertainty regarding the ultimate economic impact of COVID-19, we are taking prudent steps to further strengthen the company's liquidity.
"I am especially grateful to our manufacturing, converting and supply-chain frontline teams around the world – their health and safety is our most important responsibility as we provide essential products to our customers."
Industrial Packaging operating profits in the first quarter of 2020 were $470 million compared with $605 million in the fourth quarter of 2019. In North America, earnings decreased due to lower sales prices for boxes and export containerboard, higher planned maintenance outage expenses and higher operating costs driven by the Riverdale mill conversion. Demand for export containerboard improved and input costs were lower, primarily for energy. Earnings were negatively impacted by the non-repeat of a favorable inventory valuation adjustment in the fourth quarter of 2019. In Europe, earnings improved driven by seasonally higher volumes, primarily in Morocco and Turkey and continued performance improvements at the Madrid, Spain mill, slightly offset by unfavorable foreign currency impacts, primarily in Morocco.
Global Cellulose Fibers operating profits (losses) in the first quarter of 2020 were $(54) million compared with $(45) million in the fourth quarter of 2019. Earnings decreased driven by lower average sales prices and higher planned maintenance outage expenses partially offset by a favorable inventory valuation adjustment in the first quarter of 2020.
Printing Papers operating profits in the first quarter of 2020 were $96 million compared with $109 million in the fourth quarter of 2019. In North America, earnings decreased due to lower export and domestic sales volumes, seasonally higher operating costs and higher planned maintenance outage expenses. Earnings benefited from the non-repeat of an unfavorable inventory valuation adjustment in the fourth quarter of 2019. In Brazil, earnings decreased due to seasonally lower sales volumes and lower margins driven by geographic mix slightly offset by lower input costs and favorable foreign currency impacts. In Europe and Russia, earnings increased primarily due to lower operating costs in both regions, lower planned maintenance outage expenses and input costs in Europe, slightly offset by lower sales prices in both regions and lower sales volumes in Russia.