Rayonier Inc. has closed or scheduled timberland sales totaling $495 million, encompassing approximately 200,000 acres in Oklahoma and Washington, as part of its broader strategy to streamline assets, improve cash flow, and reduce leverage. The disposals, part of a $1 billion initiative announced last November, have enabled Rayonier to capitalize on valuation differences between public and private timberland assets, especially in a high-interest rate environment. These recent sales are anticipated to decrease the company’s net debt-to-EBITDA ratio to 2.8x, strengthening its balance sheet and enabling more flexible capital deployment.
Alongside the asset sales, Rayonier reported third-quarter net income of $28.8 million, or $0.19 per share, on revenues of $195 million, an increase from last year’s $19.2 million, or $0.13 per share, on revenues of $201.6 million. Excluding legal settlements and pension costs, the company’s pro forma net income was $18.1 million, or $0.12 per share. Adjusted EBITDA was $71.8 million, down from $78.9 million the previous year, primarily due to slower performance in the New Zealand Timber segment.
The Southern Timber segment remained resilient with Adjusted EBITDA of $37.9 million, sustained by higher non-timber revenue despite a 13% decline in harvest volumes. Rayonier’s Pacific Northwest Timber segment saw a 12% improvement in Adjusted EBITDA to $8.7 million, fueled by a 10% rise in harvest volumes. In contrast, the New Zealand Timber segment faced a 38% drop in Adjusted EBITDA, totaling $14.6 million, attributed to reduced carbon credit sales and higher shipping expenses, which reflect broader global inflationary pressures on logistics and export markets.
Year-to-date, the company reported $173.8 million in operating cash flow and $105.7 million in cash available for distribution (CAD), supporting debt reduction and returns to shareholders. Already, $90 million from the timberland sales has gone toward reducing unhedged floating-rate debt, with remaining proceeds set aside for further debt reduction, shareholder distributions, and capital projects. As a result, Rayonier anticipates a special shareholder distribution, with details to follow by year-end.
The company revised its 2024 full-year guidance to account for recent sales, anticipating net income of $343–$359 million, EPS of $2.30–$2.40, and Adjusted EBITDA of $275–$290 million. Lower expected harvest volumes in Oklahoma and Washington, along with weather-related impacts in the Southern Timber segment, influenced this outlook. CEO Mark McHugh reaffirmed that the sales align with Rayonier’s goals to concentrate on high-growth regions, citing improved capital structure and financial stability in response to the current economic landscape.
McHugh noted that Rayonier has completed or announced nearly 75% of its $1 billion disposition target, with proceeds aimed at strengthening competitive positioning and capital allocation flexibility. He added, "Our efforts to streamline our asset base and capitalize on timberland value discrepancies have positioned us well in this environment."
Rayonier's Real Estate segment is also expected to close several substantial transactions in the fourth quarter, contributing to full-year EBITDA targets and further supporting shareholder returns amid persistent economic headwinds.
