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$WY, which owns and manages timberlands, has redeemed its 21% ownership interest in the Twin Creeks Timber joint venture for around $108MM in cash. Weyerhaeuser also agreed to sell 100,000 acres of Southern Timberlands to Twin Creeks for about $203MM. The company will terminate the agreements under which it managed the Twin Creeks timberlands.
$WY announced effective immediately that all its lands in Flathead, Lake, Lincoln, Missoula, Sanders and Ravalli counties in Western Montana are closed to public access due to the extreme forest fire danger. The closure will remain in effect until further notice.
$WY said it is implementing a solution to address concerns regarding its TJI Joists with Flak Jacket Protection product. The recent customer feedback regarding an odor in certain newly constructed homes is related to a recent formula change to the Flak Jacket coating that included formaldehyde-based resin.
$WY plans to voluntarily withdraw its common stock from listing on the Chicago Stock Exchange, but will continue to be listed on the NYSE. This was made to eliminate the costs and duplicative administrative requirements associated with dual listings. The withdrawal is expected to be effective on or about July 20, 2017.
$WY will sell its timberlands and manufacturing business in Uruguay to a consortium led by BTG Pactual's Timberland Investment Group, including other long-term institutional investors, for $402.5MM in cash. The transaction is expected to close in 4Q17.
$WY said that in 2Q17, the company does not expect any significant improvement in saw log pricing. However, the company does believe there is some potential for some minor pricing traction in late 2017 as demand continues to grow. Moving into 2018 and beyond, $WY expects better pricing on Southern saw logs.
$WY said that in Wood Products operation it will be investing at an approx. $300MM in the next couple of years. The company does not anticipate investing more than that during the timeframe. However, after investing at the $300MM level for the next couple of years, it would anticipate going back down to the normalized level of between $200-250MM.
$WY expects significantly higher earnings and Adjusted EBITDA from the Wood Products segment in 2Q17 compared with 1Q. The company expects higher average sales realizations for lumber, oriented strand board and engineered wood products as well as increased sales volumes.
In terms of operating rates, $WY said it is optimistic about demand moving into 2017 for all of its products. The company anticipates Lumber and Oriented Strand Board operating in the low to mid 90 range, and Engineered Lumber Products operating in the mid 80 range.
$WY is targeting additional operational excellence improvements of $95-125MM across all businesses for 2017. This includes $40-55MM in Timberlands, $20MM in Lumber, $20-25MM in Oriented Strand Board, $10-15MM in Engineered Wood Products and $5-10MM in Distribution.