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Sylvamo Books Non-Existent Revenue After Largest Shareholder Gets Greenlight to Sell

Paper maker waits a year to correct error & would’ve missed its own guidance had it not overstated sales in the year-ago quarter.

June 1, 2024

Sylvamo Corporation (SLVM), a maker of uncoated freesheet, cutsize, offset paper, and pulp provided little detail for a year-old accounting error that resulted in overstated sales for the first quarter of 2023.

In its latest quarterly filing the company noted only that:

“Intra-Europe paper revenue and related cost of products sold reflect the correction of an immaterial error which reduced both net sales and cost of products sold by $18 million for the three-month period ended March 31, 2023.”

Investors might not agee the error is immaterial when one considers it resulted in Sylvamo:

—Overstating European revenue by 7.8% in the first quarter of 2023
—Overstated total revenue 1.9% in the first quarter of 2023

The corrected financials do not contain a footnote or indication they’re different from previous filings.

Notably, the overstated sales allowed Sylvamo to publish a news release boasting the results were in-line with guidance.

It also followed news of Sylvamo’s largest shareholder’s desire to sell out.

Two months before Sylvamo reported erroneous revenue that met guidance, the company filed for a shelf registration allowing its largest shareholder, private equity firm Atlas Holdings— owner of 14.9% of Sylvamo at the time— to sell its 6.3 million shares.

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