Earnings call transcript Q1 2023

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Operator

Welcome, and thank you for joining Rayonier’s First Quarter 2023 Teleconference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Today’s conference is being recorded.

If you have any objections, you may disconnect at this time.

Now I will turn the meeting over to Mr. Capital Strategic President, Vice Mings, Markets Planning. and Collin

Collin Mings

Welcome investor teleconference you, and first Rayonier’s morning. good Thank covering to quarter earnings.

and on of laws. rayonier.com. made pursuant Our and federal these presentations, remind securities statements financial the forward-looking released in were earnings statements include yesterday you are that available would safe our I at to we website like to supplement afternoon harbor provisions

Page XX-Q cause earnings non-GAAP supplement. filed the Throughout Our results financial release and on with GAAP SEC reconciled XX-K these earnings discuss are release from of of may and list which nearest also we They and materially supplemental factors differ defined and that materials. statements will referenced may actual Forms our measures, to X to our presentations, in some financial forward-looking are the the we measures the make. also

Dave? our With that, Dave from let’s Nunes, start comments our opening with CEO. teleconference

Dave Nunes

Thanks, Collin. everyone. Good morning,

our McHugh, over some First, results; our to results; and of high-level XXXX. make Officer, Zealand Mark Executive comment consolidated ask our New to then I’ll Mark Chief Vice turning we’ll financial Chief Doug well comments it Financial and Timber Resource our results review estate Long, Timber segments, the Officer, to our President President will review the on remainder of as following U.S. discuss as real for and before outlook and

$XX demand, forma disruptions macroeconomic amid an New tropical to our total Gabrielle, quarter, associated headwinds North million The which February. navigated weaker For extraordinarily income pro and generated XX% end market team declined quarter adjusted share collectively $X.X harvest of in segments EBITDA by and XXXX Island strong $X.XX numerous Zealand’s the Cyclone hit with the relative first adjusted continued market first per million our as we EBITDA generated of net Timber or challenges.

real relatively estate light were the first anticipated, quarter. As closings in

that expect continue be weighted relatively pipeline of closing toward strong, heavily and half full the to year remains estate real our second activity However, we will year. the

segments. operating Drilling down on our further

first million, reduction demand period Our EBITDA weaker XX% products impacted conditions million the demand. market to quarter were lumber drove segment by through Both conditions $XX tensioned a recalibrated U.S. net adjusted prior weather end and year worked prices. pulp demand from and slower our for drier Southern less log in stumpage generated customers pricing market inventories the coupled during of as Timber with $X markets quarter down softer as elevated in the for and Compared

a XXXX to of South, in a pricing translated pullback price majority the our in markets elasticity sharper from relative levels.

However, our U.S. favorable absolute to EBITDA pricing the very acre per per EBITDA compared remained levels, and ton

South overall.

year in Northwest Timber adjusted million XX% EBITDA the demand uncertainty. harvest $XX region decrease the in softened sawtimber was prior a from and Pacific The market our macroeconomic due lumber tension XX% In decrease volumes the market domestic quarter. in period weaker pricing, first versus down $X a less decline the and general conditions prices. and to export Overall, year to million prior attributable from quarter of segment, was

planned declines during end we and quarter, normalize. pricing some saw we inventories until to the defer Given mill the demand harvest opted market

Turning New Timber to Zealand our segment.

of credit volumes resulting versus of EBITDA harvest year the lower Cyclone foreign million due adjusted million X% declined sales, and the lower to $X Gabrielle. impacts prior $X quarter quarter exchange carbon from First impacts unfavorable

were by shipping stumpage levels. delivered normalized XX% flat roughly also more realizations return relatively costs and declined prices While sawtimber export as to

all who to As thoughts our go to those affected it the of storm. were by Gabrielle, relates out Cyclone

by While contractors the storm. we timber damage, sustained or and Rayonier some no property injured employees fortunately, were

that write-off damage on timber a assessment roughly acres. our completed was During necessary the and X,XXX we to damage determined due million $X.X quarter,

production days standpoint, operational also an several lost the quarter. From we during first

been average offset restored, favorable our expect generated this by has prices than period forest of we Estate acre EBITDA pleased that development Real will much the In year XX% increase projects. Despite a were strong, adjusted end and recaptured segment, access and the compared both million ago, remains for rates $XX sold. from as in quarter, our by $X higher the as year fewer Heartwood production interest by prior weighted of year. However, of land we demand more rural the first to per for the acres the Wildlight down remain in the we be currently to and million momentum

quarter results. that, details on let financial over more With me turn to Mark our for it first

Mark McHugh

Thanks, Dave.

start quarter Page while $X operating million the highlights. was attributable and Rayonier million to or income $XX was million, share. our per with income financial Let’s Sales first for $X.XX X on totaled $XXX net

On Adjusted the forma Gabrielle. million or timber from basis, period. was quarter resulting $XX $X.XX in million down associated million [ph] $X.X write-off year share. as million the the the in Pro net per net Cyclone items a pro million EBITDA forma $X.X $X recovery $XX well prior legal first settlement included income as a first was quarter, a in from with

bottom liquidity. our provide resources Page of capital we the and X, On an of overview

measures of provided interest to by was cash available CAD, offset lower in other EBITDA activities paid. and on taxes financial for expenditures, $XX provided capital reconciliation driven by distribution, quarter versus the by GAAP the or A for and was million and million supplement. Page the prior cash of is period. The higher lower year partially Our CAD $XX decrease operating cash adjusted X

debt years average and with the quarter was significant no debt our first $X.X six approximately until billion cost cash maturity first portfolio the $XX XXXX. and maturities of of of debt million end average of the our X.X% weighted closed We approximately At quarter, debt. the was with weighted of

XX% the net of Our at debt $X.X price closing the end value our stock of based enterprise represented billion approximately quarter. of our on

over our the more a timber provide now results. review to to turn I’ll Doug detailed call of

Doug Long

Thanks, Mark.

quarter, partially in XX% the quarter first driven sawtimber pine $XX an lower Adjusted pine volumes. and Let’s volume segment. by by pricing flat was million net volume year EBITDA stumpage income. and costs, reduced year hardwood non-timber offset start Page higher the Total in with prior quarter X Timber prior relatively our increase offset on the of was Southern higher harvest below versus as pulpwood

stumpage the compared operating The pulp to due pricing weather from softer prior year per was sawlog chip-nsaw sawmills conditions, reflected decrease for from Average areas our XX% in to volume. market period. an across $XX less pricing moderation and mills ton, competition reduced tension drier demand

stumpage maintenance versus the weighted conditions. outages year XX% prices quarter market Overall, and weaker quarter per prior stumpage pulp net XX% average fell extended at first to roughly ton. weather softer to pulpwood year as the quarter in conditions roughly $XX Meanwhile, per demand, contributed the mills drier ton prior $XX pricing fell end-market all to versus

the anticipated year, given construction the slowdown in end pulpwood weaker and both market sawtimber exceptionally had residential we ever saw from pricing the and for treated strong levels products. As pulp entering activity ago, demand year a we

term log degree, of that continue we to While macroeconomic that we to expect relative some the the strength believe related and headwinds U.S. our over constrain diversity persist pricing near will and

a is key footprint strategic for advantage us. South

decrease response period the costs. was the conditions. Volume were compared and EBITDA on prior as deferred lower planned Timber Page year The in was soft as by Pacific harvest quarter year-over-year our primarily million stumpage $X to harvest in of decreased Adjusted Northwest prior net volumes million some to than driven lower XX% realizations, $XX to segment lower market higher X. year first quarter. the Moving

ton, domestic demand ton, half pulpwood the exceptionally $XX high from due from over pricing the prior XXXX. year but per prior export domestic At from did pricing well to second reduced XX% primarily the weaker sawlog $XX moderate levels in increased was at per first average down of first market. quarter quarter delivered year as tension as achieved lumber period, Meanwhile, the in the from XX% mills the

of which start the had in an negatively market supply to year, ample Northwest sawmills conditions. impacted Overall, logs Pacific the

the into started to see we inventories are progressed we some as that log declining. indications However, spring,

As inventories, into market we with momentum expect look improving to to coupled of we prices. demand the ahead end solid mill remainder declining and translate positive the year,

Turning to pulpwood.

the that expect drive constraints supply moderate continue half exceptional helped realizations pricing We of normalize will the in near-term. pricing as second the XXXX over to

Page Adjusted $X Zealand below sales, quarter in XX quarter. New credit exchange adjusted was lower to million harvest fewer The shows production EBITDA compared days higher of to and and costs by unfavorable results the our operating prior segment. carbon million foreign for period Zealand. as result was Cyclone decrease year in $X to year of prior first due metrics driven Moving lost the the Gabrielle. Timber EBITDA a impacts, New volumes key

per to XX% export declined year delivered prior ton prices sale quarter. of the Average $XXX compared

recovery the the to on more real Chinese measures measures flat However, volume relatively be government in implementation shipping some stumpage relaxation signs stimulus showing XXXX boost of on in levels. and as COVID-XX market. export normalized of realizations of appears estate confidence late economy Encouragingly, containment costs fell the to designed to the were

off-take normal lower year port optimism us as remains period, the in outpaced market have post-winter progresses. consumption While New will gradually China trended Year logs, as giving the inventories inflow for improve the that port of below has export the

to Shifting Zealand the New domestic market.

to – U.S. the prices First ton, year Zealand largely prior change $XX dollar quarter X% sawlog per from dollar rate. delivered the average reflecting period the in fell New exchange

basis foreign exchange declining on prior likewise exchange Domestic impacts, X% period. foreign excluding rates, but to the impacts. compared Excluding were dollar when pulpwood a Zealand sawlog the prices from flat relatively year prior up foreign New prices quarter by year U.S. domestic in impacted exchange X%

the declined volatility the prior pricing New we deferred year during credits the to sale period caused by Non-deferred relative quarter segment of carbon regulatory as income uncertainty. the amid Zealand and in first

carbon conditions pricing opportunistic plan we of depending market and carbon forward, credits, Going on our outlook. our in to remain sale credit

the a Lastly, profit slight we first operating segment, our Trading in in quarter. posted

reminder, are scale to trading timber fee primarily a economies designed margins low additional our As export typically and provide to business. of generate our activities

over cover back Mark to it real to turn now I’ll results. estate our

Mark McHugh

Thanks, Doug.

$XX with adjusted contribution on detailed our at segment in quarter segment the an Real Real the estate roughly acres per light, X,XXX relatively from quarter Real first first average Estate sold on consistent was totaled Estate entering our EBITDA XX, price acre. year. $X expectations was sales million. the $X,XXX Page million of As

Sales in of development project, consisted of two Savannah, the development Georgia. our improved category in down. South Drilling transactions Heartwood

lots XX-acre as a $XXX,XXX, the homebuilder we developer quarter, acre residential $X.X to reflecting price of a regional national site to for multifamily per on million base well lot. $XX,XXX an six $XXX,XXX as or per closed for During average a

very ground closings, in quarter. Heartwood the In broke excited addition sites about to during two that these we’re also

The of convenient to first initial Joseph’s community medical care, which access will the the St. services is and [indiscernible]. the primary campus, Healthcare specialty with phase provide urgent care, Candler

at Mobis for units Hyundai control the is and systems power Park, Belfast second electric supply manufacturing plant will Commerce The vehicles. which

to project expected demand Hyundai an a XX-minute believe create the are the area. with from Combined under the two drive the as Metaplant jobs these within construction the Heartwood, We within going campus will as Heartwood health currently that development Hyundai that’s new estimated X,XXX further forward. plants drive well facilities care in

Overall, to relatively trends, each help another. will affordable Wildlight points catalyze that we commercial continue our migration demand end that residential, favorable mix projects and Heartwood are demographic development diverse and believe benefit one uses of from a positioned and and price and well both industrial for

the rural Turning to category.

$X,XXX consisting in million sale sales $X.X quarter XXX and XXX for acre County, Alan million, sale $X average $X.X acre. Key acres transactions or per at per of for acres approximately of an in First Florida, $X,XXX roughly $XX.XX Louisiana million X,XXX Marion the included price acres the acre. of Parish, per or totaled of

Overall, demand not financing. by reliant land particularly that up on fact buyers we’re well, from encouraged mortgage held for rural has the

Lastly, roughly on for sale of first acres $X.X Texas, XXX over holdings the the of or closed $X,XXX also during nonstrategic quarter, in per we acre. Harden million County, just

range lower guidance of million balance $X.XX forma adjusted Moving year our towards our range $X.XX. anticipate prior for the and on $XXX quarter pro prior of EBITDA now of of we our outlook to first to the end of the on balance lower expectations guidance year, EPS our the toward for million. Based anticipate of Similarly, $XXX end our to we the results XXXX. full

relatively segment, segments. guidance anticipate volume quarter. individual full track strong we for our remainder first our Southern to In year the year to achieve of the our respect quarterly harvest With are a Timber on following volumes lower but

particularly quarter Over term, by will expect macroeconomic the pulpwood, weighted first net realizations environment. impacted for as average below we been the has demand, stumpage negatively remain levels near

XXXX. response to compared income have our in In harvest XXXX conditions. continue nontimber market Pacific Timber toward expect higher segment, prior for we full some harvest year Northwest guidance unfavorable to full anticipate volumes year as deferred lower We we to planned end the of as our

anticipate balance we market year, modestly normalize. XXXX the first as start to inventories the demand and prices will weighted pricing the of in average pullback the Following mill end levels log improve quarter delivered over

the segment, harvest resulting of our we Gabrielle. volumes New Zealand to no we log contribution weighted the given delivered quarter. will balance lost activity end the quarter, in over further the the sales from balance carbon lower production year. days first our prices credit prior higher remain We year Timber toward following of anticipate relatively In expect the of a the average over anticipate Cyclone the first the guidance flat Compared from

and our of segment. our operating development this Overall, be half we timberland HBU there guidance, year Estate interest with projects higher interest prior significantly we demand expect from assets segment, continues results the despite In Real strong the encouraged our higher by to second the and rate properties. the remain properties rural volume Consistent in for in environment. transaction and

turn now closing back the to call Dave for I’ll comments.

Dave Nunes

Thanks Mark.

improving macroeconomic are pleased and cash the flows optimistic the challenging, burgeoning over for opportunities business progress portfolio. outlook around our that our nature-based about the years corresponding remain been current growth we valuations have long-term believe quality timberland and the near-term and We favorable both made support long-term should prospects and in backdrop coupled of long-term over past fundamentals, in housing with solutions with While growing few business time. the

in renaissance of to an discussed appeal its terms can as recent of impacts As climate the shareholder our given we somewhat is letter, play enjoying of change. asset the annual forest timber investment role address class in a

low-carbon alternative land wood for and of variety a the to evolving a uses carbon, sequestering support are to fiber to economy. addition transition In

are advancing over to these portfolio how can We opportunities understand initiatives several our value to better timberland add time.

pure-play and the focused opportunities, the our a While macroeconomic new near-term we our REIT with strength remains on team environment. we timber of afforded these for advantage relative extremely by key diversity flexibility are excited associated operational operate competitive model, coupled about The headwinds challenging with remain navigating us. markets a in, the

our and said growth to opportunities don’t important note, for the working portfolio future productive sum, capital are has this that pursuant towards conditions in I’m uses timberland assets acres this changing navigate with that together long-term how to team, to to sake. far us our so I advancing and of That we is while value December, market rapidly seen XXX,XXX we’ve in and integration to afforded year. continuously our greater for active will reiterate enable a evolving of that conditions better risk proud timberland return us to evaluate believe growth’s believe has real our estate success. of well continue well that team shareholders. initiatives acquired very profile. the management to adapt market our also we culture, our In our less also On it’s quickly strategy, strategies And recycle build important aligned back to achieve very to we flexibility the gone

operator the call now I’ll and remarks, back prepared for turn over our concludes questions. This to the

Operator

Citi. Thank question Instructions] first comes with Our Pettinari [Operator Anthony from you.

open. Your line is

Greg Andreopoulos

Greg taking questions. Anthony. for for my on Andreopoulos is Thanks This

Dave Nunes

Good morning.

Greg Andreopoulos

portfolio, regional inventories just trends versus Quickly, your mills, Southern any mills your operating or identified acquisitions could as broader the portfolio? And you market Southern are Rayonier maybe approaches the if in demand looking log pricing inventories across in end there legacy various on touch holding markets. maybe you in

Doug Long

with start This that. is Yes, Doug. I’ll good morning.

in as So the U.S. prepared we our log noted recent the on remarks, price pressure in

more that realization to year so markets I’d the in And South our a is of remain in to make tension the has few the that most U.S. actually really see registered been quite markets additional most that the gains of points pronounced we price much like on price pricing that elasticity markets. largest favorable in that it’s compared reflective last our

we into grown that South QX you baskets favorable given constrain products. overall, of the comps to comps dynamically ago is strong XXXX concentrated wet And had Heading demand both year-over-year for we’ve reflecting recently soft said, and timber end amount areas growth the market had. year are and of on had portfolio where very the the most drain our exist mentioned. XXXX, the available. tough acquisitions in wood at That very supply where winter down pulpwood we also end of a

amount strong significant supply had demand that that dynamics the favorable in we achieved a and drove that of was overall, already This to pricing that’s what So operating the tension created ago. year contrast markets particularly in a in U.S. some of is areas other

underlying the on last have momentum dynamics allow same such the see didn’t that didn’t impact the an markets drain those for to pricing. increased that South given that tension growth have year

believe our given So better – these for a – are have. in baskets markets, and levels the tension generation still the of price positioned are we while the volatility that term, per we there’s quite ton superior bit long pricing more EBITDA more absolute

of across patterns different your and where rainfall to question And we’re across around things seeing kind the region, the are South. definitely

Delta have been Atlantic of over so normal And that spring. below so along kind drier, River particularly here winter it’s and then much And Mississippi Coast, the rainfall. we’ve been wet area

we in the about weather there. mentioned So difference seen markets, some I as have wet

well as higher exports. Atlantic mills have of the along As here Coast, percentage a

China. both there’s demand weakness And Europe seen some and we’ve less so for as exports been to

a there’s versus East kind our bit state different kind of and the So mills Gulf between of regions. Coast been little

Greg Andreopoulos

Last Interesting, and Thank Ukraine invasion you. that’s very flows you And follow-up. economy. provided a an year, helpful. just weaker of Russian after the on log the update us quick European global

Zealand discuss of of notable supply-demand outside your destinations And you volumes Pacific and Europe? current guess, is opportunity on end, can out I China? trends any log to environment? New given your identify what’s question, global and the my to you Russia export other global So footprint, flex And Northwest the

Doug Long

stab a also. that Yes, at I’ll take

to they volumes. we sort with have respect Russian-Ukraine kind things the of the out So thought way

probably things the the ramp-up in is been still has biggest China its way working through. One of

So the China the logs. of inventories few the trending there that before in of remarks, as has months by we mentioned, port outpaced comments the inflow prepared are over the encouraged are in past kind fact as we’re consumption lower

port that reports of that’s cubic kind from show latest March. and softwood inventories about And over down April X.X we have X% million at are meters

seeing drawdown. are we So some

what for that logs seen China, logs than moving through and that’s is probably were to now. China the the that down have fact war in news we from Europe Ukraine And so us. the less that seems good And to have slowed

that place are kinds those down. So in have that salvage of last slowed contracts logs,

a in to spruce reduction seeing China. we’re starting So into European move

We haven’t seen What probably China. we’ve lumber and level. is the in to Europe increase just being made on an into China more from logs seen what more Russian seen Russia area. shifted in is the weakness basically we’ve macro overall And

we’re from and that’s Europe kept I something of the think, States, here. is so a United seeing damper lumber And imports impacted into heading

On the to up. starting seeing we’re China log in now side, demand pick

in holiday seen meter estimated the more we’ve was COVID XXXX the cubic lockdowns, cubic lunar range. but typically during compared So to April, height which up XX,XXX it’s is takeaway the the meters, of daily China past in XX,XXX around XX% in April XX,XXX to

we good were year, where go So last from room there. progress but still some to

few increases. prior the before. National growth economist of quarter GDP estimates improve normalize the in both that quarter optimism expansion imports first XXXX. once and will prices it China’s and the for demand However, Statistics Bureau there’s some see us X.X% reported a that can of factors We giving log year-over-year

sold the basically And then residential of in quarter grew first also. space floor QX

relative in viewed demand How construction are logs signal typically and residential that This yet after But as like as as what go from construction quite for. demand play in takes COVID our log used it for leading to ports we an of to export indicator year, growth long seeing materials turning a may in place saw is increase I restrictions. point be is the that. the mentioned, we So, determined. out we’re a market last the to

better about as we environment move So forward. feeling much we’re the current

Greg Andreopoulos

for Thank you Appreciated. very color. much the

Operator

Thank you.

Markets. Mamtora comes from BMO Ketan question with next Capital Our

open. Your line is

Ketan Mamtora

on increasingly in area? and you Zealand in some is becoming morning. that? Thank color what credits, curious of which good is kind also work the you topical around the carbon if been have U.S., seeing a and can you And New I’m you’re guys very of kind doing provide what both around

Dave Nunes

has carbon mind, is this Yes, keep market. in Ketan, regulated Sure. Zealand New a Dave.

participating carbon And something we’ve number for a strong years, prices in year. so that’s were last that of been very

approach to standpoint off And of regulatory credits taken number to always a this carbon. uncertainty the New The due fair We some a so sold of and we’ve Zealand from market. that sort We were perception of last the selling was market opportunistic year. carbon within year. market an earlier softer

to waiting so firm. we’re And things for

market is a that that, lot in than said further U.S. Having the developed

many I looking the green a think the market. there’s potential lots out, U.S. washing. concern of pointed carbon voluntary is as have And a really at around for

make carbon taken additionality. included, fairly ourselves And smell number advance that any cautious for that so a have pass approach like we of participants, sure projects test a to the things

we’re progress those to of one similar have running so as for those do and continuing many up yet not And other that’s participants. reasons, to projects, but we again,

kind of We capture carbon progressed storage. area and in we that of interest That’s has than are faster thought. lot a related to an seeing that

in We first our have capture on and place project. put storage carbon our lease

others now. We that have of number we’re working on a right

revenues process interest by. the a we’re to in So start the will permitting that encouraged encouraged that. flowing for we’re market it very number of mind, is years in that’s general complex, take but as one Keep by fairly

Ketan Mamtora

Got it. That’s helpful.

and you quantitative guys around view the kind sort any can credits into that? – provide are, If and the U.S. how kind insight Zealand in of any you carbon kind both of New prices of what of

Dave Nunes

to that higher than Yes. really trade-off U.S. New the over carbon and until to the from We’ve vis-à-vis low voluntary industrial level, difference regulated in down a between That’s reflecting map are of see carbon credits voluntary timberlands a a the are the not unit. last in the to carbon digits the and $XX Zealand say that carbon between Last Zealand market, in that that market. managed higher roughly price likely right prices they New all over per a prices They’re sequestration. where But year. log per production U.S. way year, metric substantially prices now were from seen meaningfully I’d change a lot single you’re $XX get ton. were

Ketan Mamtora

issues Got my about just southern pulpwood there from helpful. of question is pressure And more related seeing is of sounds of specific Can on a to side. much it market. QX? very That’s thing continue then talk cyclical of which how of you this like kind of actually you Or the could side, through kind where the is it. are demand kind It more incrementally pressure least? XXXX last at on kind

Doug Long

one. I’ll the of Yes. on is QX of last Doug. a was the pressure This pulpwood answer lot that year. of A we saw result market

is for of the saw we to for mills time lot spring But decreasing extend to and they so take hearing lot that saw that’s operating demand reduced year, little kind reduce their as a as in customers see and things kind now through what pick started little through bit. at we we’re of chain mills them. of ripple supply the lot a down, this destocking those their so process a A saw I they up have through, weighing back. we the of And rates start that shut saw And end of really QX, But QX capacity. that starting a we’re of a bit.

production their So mills spring come have from back increase rates. the as to some starting maintenances, of their they’re

we’ve of net we look into lot And QX average at has we through most is that what a forward, really, already QX. happened our So, what as seeing weighted I weakness going kind just think those stumpage increased is, we’re seen then as geographic have of harvest an thing around. we And the in shift happens. also of mix QX, seasonal typically of and And production pulpwood. that increased amount happens volumes that some some a that’s of QX,

of per So we’re per on basis, – stabilize. a seeing pricing things product kind

Ketan Mamtora

Doug. very it. Got turn it That’s over. luck. Good helpful I’ll

Doug Long

Thank you.

Operator

you. Thank

Raymond comes next James. Our with question Horne from Buck

Your open. is line

Buck Horne

of bit pulpwood Good follow thanks. more up morning to the detail. Hey in discussion I on a guys. kind wanted little

of isolate while of I exactly are created created for – end can kind operating drivers rates what production? the we markets demand Just their slowing or the softness, mills – some were the mean, taking down has in pulp that that

that increase some follow-up is, the pricing, aviation that sustainable on could anything pulpwood catalysts guess fuel demand I usage? of increase the could that sort that on we the to horizon be pulpwood do uses, pellets And side any or whether see else whether it’s that near-term

Doug Long

down Yes. that need through for a that I what I boxes of users up. COVID, materials conversion we’ve on and things after mentioning of and our think a destocking was level before, lot COVID, the Like different heard was I is stocked And as changed of linerboard end the coming kind people of kind end the patterns there at think basically move the side. had

from the I what impacted our so lot China. And understanding in that’s think a really in of demand, particularly Europe, also but

know start that to then through we myself. the is and does that Europe. better mills, really than destocking both some – in is see they But obviously, so and hearing we’re what this And China –

is comes there I’ve moving from improved to strong to what So in there’s what why production out. I that’s starting still demand that’s Europe. else is forward. some it play think And heard the When pellets

And that. we see so

the that, have like say, provided of issues at mills run to and capacity. basically had pulp Some we’ve and full back some we’re things full running maintenance up at seeing and capacity, them

So some see there. I upside

take pretty I and it’s area, for for going folks emerging to going opportunity that – to excited It’s take storage. built. right out, really fiber with the while quite respect then fuel few it’s those a again, But people, bioenergy in plants now think like to That’s we’re and solutions exploring you that. supplying about to provide capture facilities. we’re to and the get last carbon And that an a stabilization point with brought manufacture

and first The now, I’m they’re starting Texas. that happen. in strike we’re kind on area aware see our And of of operating to so that to is one excited ground in

So do in be believe we growing the going a opportunity to that’s for us future.

Buck Horne

Awesome.

at Okay. NAV, where the color and repurchases the there using price any to is is or these have And the where you do and is here? stock – unfortunately, close secondly, for sustainably days the stock there. to it your disconnect I I with interest appreciate authorizations there, potentially an then being acreage disconnect repurchases fund or the think, selling

Dave Nunes

I’d as authorization. we buyback all, always open say, – have our first to Yes. Buck, allocation. capital open well an of ATM We nimble keeping authorization to an as approach

So land be opportunity sort timber of readily that asset our at always And we’ve sold have we such both of disposal. can that if an present. levers felt an were is those and

have think lots I so of on we believe to we And continue front. flexibility that

Buck Horne

luck guys. right, Got Good it. All thanks.

Operator

comes next Instructions] from you. question Our RBC Paul Capital Quinn Thank Markets. [Operator with

line open. is Your

Paul Quinn

thanks guys. Yes, Good very morning much.

Just us comments North whether source themselves? the year? improving if like do over you that some could markets overall that It transactions there, third-party you on timberland sounds to according American see give

Dave Nunes

roughly – that in been There’s couple there date, XX roughly out being in ones a been have them. are see right there the transactions the have that hundred pricing. The been majority to for closed few that reflected out in you that market now those of selling have The Paul. vast quality, TMOs a acres generally are a thousand total. it’s Yes, transactions lower and

during in X,XXX four relatively quiet the been We one small a keep we’ve a first one and – but bolt-on We it two quarter Washington Florida, pretty in for about quarter us. market, transactions, Georgia on in closed on active was look for acres. the

to monitor second flow year, And of time market. small see those So the into not pretty for start this we’re bites for we – a offerings markets. continuing to half generally, But us. very starting the to the

Paul Quinn

improved hurt that characterize I the industry on through And competitive your of i.e., Cyclone on rest appreciate Thanks. and it, cyclone do you the position the is then Gabrielle. forest color New effect rest Zealand’s that the or cyclone? of of Okay. products had How

Doug Long

Doug. This Yes. is

I of our I you than somewhat say improved term, think had guess, some more we longer the it’s damage that in in – did peers force. significantly mature

So knock-on that will central effect the have on, have a in as Island. North time particularly a goes

particularly more were volume pruned where we would unfortunately the there So next supply areas definitely be in reduced did, of suffered couple people that and and damage years. of way over than some sawlogs

market. short-term we have first, now, influx that’s hit right the salvage going But volume a to of

And of now. as that through shift that seen wasn’t – damaged, but away that. from we’ve And kind think so that timber forward so mature, we’re the salvage will we supplant go working crews we

So competitive there mature from I in that now, volume to just then respect, two or if a look probably wood a less out it’s you compete. advantage think out year there’s

Dave Nunes

that, to fairly is in country. across our Zealand New the add dispersed I’d Paul, footprint

had And that affected. a were roughly so result, as we X,XXX acres

So the write-down it that of was a and two-thirds small of was we pre-merchantable impact roughly around took timber. pretty area

to Doug’s comment, And mature blown market lot that we’re so a right was timber now weakness some to down. due of seeing

a has supply And fortunate kind that so very weren’t plugged impacted. But we from the standpoint. heavily in market feel we that of

that back in gets less are, out a have And again, you of played of that way any to one risk it impact blocked New up hurricane the is Zealand. the is and you certainly in mitigations kind that mitigator,

Paul Quinn

clear is this for that. And volume that going short a it in dragging XXXX? is follow-on. That see to Or you’re that to the the Okay. Thanks extra to term, salvage in to year? or then maybe clear quarter going is just going that

Doug Long

to deteriorate would to be is quality impact will be which there’ll to a take a really a into this problem. tell their I moving think more winter shouldn’t things. the salvage, than to some, definitely wood It’s start will going XXXX of help event but The but that take the quarter, they’re it’s hard also but still and to

typically is type salvage of think thing, kind So this I a – volume hurricane this than less year. it’s of

out. possible. quick So I on expect play They’re it as working will as

it and of quarters, think impact cleared couple So we volume through the I market. be on this less the see XXXX, then a should of and is then

Paul Quinn

And lastly carbon. Understood. just on then Okay.

a New into regulated what doing the voluntary voluntary. a to market? get is And Rayonier got from market mentioned accelerate we regulated basically a Zealand You North transition? America How market, has do

Dave Nunes

to clear seeing going you of a regulated Paul and number are not it’s is political for periods time. elements a a – programs That’s pursuing Yes, think why lot force improved or market us that designed lot market the anytime it’s why around soon. see to participants that you’re some voluntary it’s rotation this U.S. efforts a front. along harvest of the various of sort a about you of see to of thing that lengthening deferring management, really of And

of you’re around at been land carbon. seeing looking converting has a opportunities way in not that where also cleaner which We’re production, is timber aforestation,

we One of discussions to where the time carbon doing a market counterparties see have to that that don’t of prospect regulated the but we direct looking the light of opportunities is are with for that going some that’s in value take who for things can develop. fact at – sequestration, looking potentially we a for and need some

Paul Quinn

luck of That’s I guys. Thanks. had. Best All all right.

Operator

will further to no have conference questions. the you. Collin. turn back Thank We I

Collin Mings

to Collin follow-up Thank any us. with Mings. contact for is joining us you. like This thank Please questions. I’d everybody

Operator

your Thank this may you time. at Participants, you participation. for disconnect

Rayonier (RYN) 4 May 232023 Q1 Earnings call transcript