Rayonier Q3 Results

Wednesday 10 Nov 2021

RYN's Q3 in 100 Words: Strong Quarter, Driven by Real Estate

Key Points: New Zealand (NZ). Slight Beat — the Shippers Ate the Upside. Adj. EBITDA $19.9mm; BMO at $16.6mm. 3Q harvest vols -13.8% y/y (export -11.9%, domestic -16%) driven by two-week COVID-19 shutdown. Pricing healthy at $112.65. Chinese restrictions on Aussie logs helped prices. Strong export pricing largely offset by higher shipping costs. Port & freight costs in 3Q21: 2X year-earlier levels.

Bottom Line: 3Q EPS of $0.35, ahead of BMO/consensus at $0.12/$0.14. Adj. EBITDA of $114.6mm beat BMO/consensus at $74.7mm/$78.2mm. Large R/E transactions drove upside with timberlands performance in line. New Zealand and Pacific Northwest were slightly ahead of BMO, while U.S. South was weaker on lower volumes. Allowing for Q3 labour/freight/weather challenges, timber results looked very respectable to BMO. FY21 EBITDA guidance increased $15mm to $320-330mm. NZ should weaken sharply in Q4 with softer Chinese demand/prices. Maintain Market Perform rating and $36 target price.

Source: BMO Capital Markets

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