Rayonier Inc. (NYSE:RYN) Q2 2019 Earnings Conference Call - Final Transcript

Aug 08, 2019 • 10:00 am ET

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Rayonier Inc. (NYSE:RYN) Q2 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
David L. Nunes

to lower export prices, 7% lower harvest volumes and foreign exchange impacts.

The average delivered export sawtimber price of $111.81 per ton, decreased by 4% and 7% compared to the prior quarter and prior-year quarter respectively. Pricing for sawlogs in China dropped due to a combination of slower construction activity, high port inventories, a weaker Chinese currency and cheaper lumber alternatives from Europe.

Average domestic sawtimber prices of $82.66 per ton in US dollar terms were 1% and 4% unfavorable to the prior quarter and prior-year quarter respectively, due primarily to changes in the New Zealand dollar to US dollar exchange rate. Excluding the impact of foreign exchange rates, domestic pricing in New Zealand dollars was 2% favorable compared to both the prior quarter and prior-year quarter as demand remained healthy domestically.

The average domestic pulpwood price of $39.10 per ton was flat compared to the prior quarter and 2% favorable compared to the prior-year quarter. The change in pulpwood prices, compared to the prior year, was a result of increased pulpwood export demand from India.

In our Trading segment, we've recorded an adjusted EBITDA loss of $0.2 million, which was $0.7 million and $0.4 million unfavorable compared to the prior quarter and prior-year quarter respectively, due to lower volumes and lower export prices to China.

I'll now turn it back over to Mark to review our Real Estate results and outlook for the remainder of the year.

Executive
Mark D. McHugh

Thanks, Dave. As highlighted on Page 12, our real estate segment delivered strong results in the second quarter.

Sales totaled $23 million on roughly 3,300 acres sold at an average price of $6,900 per acre. Adjusted EBITDA for the quarter was $18 million. Sales in the improved development category totaled $173,000, which consisted of the final six residential lots in the initial Village Center phase of our Wildlight development project. In total, we have sold 84 residential lots at an average price of $46,000 per lot since the inception of the project. Sales in the unimproved Development category totaled $14 million, which consisted of 784 acres in St. Johns County, Florida, sold at a price of over $18,000 per acre.

In the rural category, sales totaled $7 million on roughly 1,700 acres sold at an average price of $4,000 per acre. Our rural program continues to show strong demand in Texas and Florida, where we've been able to capture strong HBU premiums to Timberland values with minimal incremental investment. Lastly, sales in the non-strategic and Timberlands category totaled $1 million, consisting of 763 acres at an average price of $1,500 per acre.

Now moving on to our outlook for the balance of the year on Page 14 of our financial supplement. As noted in our earnings release, based on the lingering US-China trade dispute and its associated market impacts, we are lowering our full-year guidance. We now anticipate full-year net income attributable to Rayonier of $54 million to $63 million, EPS of $0.42 to $0.49 and adjusted EBITDA of $245 million to