Rayonier lifts adjusted EBITDA as harvest volumes expand

Rayonier’s second-quarter pro forma net income rose to $32 million, or $0.10 a diluted share, from $10 million, or $0.06 a share, a year earlier. Adjusted EBITDA increased to $124 million from $45 million, while revenue rose to $397 million from $107 million. The results included a full quarter of contributions from the former PotlatchDeltic operations, higher harvest volumes, stronger Northwest log pricing, improved lumber realizations and increased real-estate sales, according to Rayonier.

GAAP net income attributable to Rayonier declined to $19 million, or $0.06 a diluted share, from $409 million, or $2.63 a share. The prior-year result included a $404 million gain from the sale of discontinued operations. The 2026 result included $10 million of after-tax merger costs and a $2 million casualty-related timber write-off.

Southern Timber adjusted EBITDA increased 85% to $53 million as harvest volume more than doubled to 3.35 million tons. Timberlands added through the merger contributed about 1.5 million tons of incremental volume.

Lower prices limited the contribution from the expanded Southern harvest. Average delivered pine sawtimber prices declined 7% to $44 a ton because of the geographic mix of the combined portfolio and softer market conditions. Pine pulpwood prices fell 19% to $30 a ton, reflecting the portfolio mix and weaker pulpwood markets.

Southern Timber operating income declined to $8 million from $13 million. Higher depletion expense, lower timber prices, increased costs and the casualty-related write-off outweighed the effect of higher harvest volumes and non-timber income.

Northwest Timber adjusted EBITDA increased to $26 million from $7 million as harvest volume rose 133% to 578 thousand tons. The former PotlatchDeltic timberlands contributed 364 thousand tons of volume.

Average delivered Northwest sawtimber prices increased 24% to $120 a ton. The expanded portfolio included Idaho logs priced against lumber markets, which more than offset modestly lower prices in the Pacific Northwest.

Wood Products generated $196 million in sales and $25 million in adjusted EBITDA. The segment shipped 314 million board feet of lumber at an average realized price of $505 per thousand board feet.

Lumber prices improved during the quarter as import duties, mill curtailments and trucking shortages restricted supply. Rayonier expects third-quarter shipments of between 320 million and 330 million board feet. The average lumber price in July was modestly above the second-quarter average.

Real Estate adjusted EBITDA increased to $38 million from $19 million as land sales rose to 7.5 thousand acres from 3.3 thousand acres. The average price declined to $6,290 an acre from $8,340 because of the mix of properties sold.

The company expects third-quarter Real Estate adjusted EBITDA of between $25 million and $35 million. It maintained its full-year forecast of between $180 million and $200 million.

Southern sawtimber and pulpwood prices are expected to remain relatively stable in the third quarter compared with the second quarter. Full-year Southern harvest volume will total between 12.2 million and 12.5 million tons, including between 3.1 million and 3.3 million tons in the third quarter.

Northwest sawtimber prices are expected to rise modestly in the third quarter, primarily because of higher indexed prices for some Idaho logs. Harvest volume will total about 600 thousand tons during the quarter and between 2 million and 2.2 million tons for the full year.

Rayonier also sold about 36 thousand acres of timberland in southwest Washington for $145 million and acquired about 57 thousand acres in Alabama and Texas for $146 million. The company structured the transactions as a like-kind exchange.

The acquired properties complement Rayonier’s existing Southern footprint and offer potential operating synergies. The combined transactions are expected to generate about $3 million of incremental annual adjusted EBITDA from timber operations over the next 10 years.

That estimate excludes potential higher-and-better-use real-estate sales and land-based solutions. The transactions shifted capital from lower-yielding Washington timberlands into Southern properties with a higher expected cash yield.

Rayonier repurchased about 3.5 million shares for $72 million during the quarter at an average price of $21 a share. The company ended June with $1.86 billion of debt and $412 million of cash.