Rayonier Inc. (NYSE:RYN) Q2 2019 Earnings Conference Call Transcript
Aug 08, 2019 • 10:00 am ET
Welcome and thank you for joining the Rayonier's Second Quarter 2019 Teleconference Call. At this time, all participants are in listen-only mode.
Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to Mr. Mark McHugh, Senior Vice President and CFO. Sir, you may begin.
Mark D. McHugh
Thank you and good morning. Welcome to Rayonier's investor teleconference covering second quarter earnings. Our earnings statements and financial supplement were released yesterday afternoon and are available on our website at rayonier.com. In these presentations, we include forward-looking statements made pursuant to the safe harbor provisions of federal securities laws. Our earnings release, and Form 10-K, filed with the SEC, list some of the factors that may cause actual results to differ materially from the forward-looking statements we may make. They are also referenced on Page 2 of our financial supplement. Throughout these presentations, we will also discuss non-GAAP financial measures, which are defined and reconciled to the nearest GAAP measure in our earnings release and supplemental materials.
With that, let's start our teleconference with opening comments from Dave Nunes, President and CEO. Dave?
David L. Nunes
Thanks, Mark, and good morning, everyone.
First, I'll make some overall comments before turning it back over to Mark to review our financial results. Then, I'll review our US and New Zealand timber results and following the review of our Timber segments, Mark will review our real estate results as well as our outlook for the remainder of 2019. For the second quarter, we achieved earnings per share of $0.14 and adjusted EBITDA of $61 million. Market conditions during the quarter continued to be challenging, albeit uneven across our different segments.
In our Southern Timber segment, we delivered another strong quarter, despite lower volumes following accelerated harvest activity in the first quarter of this year. Our markets benefited from increased demand from new mill facilities as well as constricted supply due to wet weather. Southern Timber results were also bolstered by very strong non-timber income in the quarter.
In our Pacific Northwest Timber segment, pricing dynamics continue to be unfavorable, due to the ongoing US-China trade dispute as well as challenging lumber end markets. Based on these unfavorable market conditions, we made the decision to defer some additional volume from our planned harvest during the quarter as well as reset our expectations for the balance of the year, which we'll discuss later on the call.
Our New Zealand Timber segment also had to contend with challenging market conditions, due to weaker demand from China and competition from alternative supply sources, which resulted in lower harvest volumes and declining export sawtimber prices. Export sawtimber prices to China dropped by roughly $20 per cubic meter between late May and mid-July before stabilizing and improving modestly over the last few weeks. The decline was driven by a confluence of factors, including slower construction activity, high port inventories, a weaker Chinese currency and competition from lower-cost alternatives, particularly European