BMO analysis: Rayonier 4th quarter

Wednesday 20 Feb 2019

New Zealand (NZ). Above BMO target. Adjusted EBITDA $19.3mm; BMO $17.7mm; 3Q18 $24.0mm, 4Q17 $23.0mm. Q4 harvest volumes 6% above BMO and +1% y/y. Export log prices were essentially flat q/q. Domestic log price -1% q/q. FX was a $1.5mm drag on Q4 EBITDA.

2019 Outlook? Adjusted EBITDA $270-290mm, below 2018's $338mm. BMO currently at $308mm for FY19; Consensus at $302mm. Y/Y EBITDA decline in R/E. Puts & takes: Southern Timber: Harvests 6.2-6.3mm tons, +10% from 2018's 5.7mm tons. Adjusted EBITDA $111-115mm, up modestly from FY18's $103mm. BMO currently at $109mm. PNW: 1.3-1.4mm tons (FY18 1.3mm tons) and adjusted EBITDA $30-34mm, versus $41mm in 2018. BMO currently at $39mm. NZ: 2.7- 2.8mm harvests (FY18 = 2.7mm) and adjusted EBITDA of $83-89mm versus $91mm in 2018. BMO currently at $88mm. R/E: $67-72mm EBITDA versus $123mm in FY18. BMO currently at $86mm.

Source: BMO Capital Markets

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