Rayonier Q1 2025 slides reveal sharp decline in earnings, adjusted EBITDA down 39%

Rayonier Inc . (NYSE:RYN) released its first quarter 2025 financial supplement on May 1, revealing a significant year-over-year decline in performance across key metrics. The timberland real estate investment trust (REIT) reported a net loss of $3.4 million for the quarter, compared to net income of $1.4 million in the same period last year.

Quarterly Performance Highlights

The company’s Q1 2025 results showed considerable weakness compared to the prior year period. Sales decreased to $82.9 million, down 27% from $113.7 million in Q1 2024. Operating income plummeted to just $0.1 million from $8.6 million a year earlier, while Adjusted EBITDA fell 39% to $27.1 million from $44.6 million.

Cash Available for Distribution (CAD), a key metric for REITs, declined to $20.3 million in Q1 2025 from $31.1 million in Q1 2024, representing a 35% decrease. On a per-share basis, CAD dropped to $0.13 from $0.21 in the prior-year period.

As shown in the following financial highlights table:

The variance analysis between Q1 2024 and Q1 2025 reveals the factors behind the decline in performance across Rayonier’s business segments:

Segment Performance Analysis

Rayonier’s Southern Timber segment, which typically serves as the company’s core earnings driver, reported sales of $50.9 million and operating income of $10.1 million in Q1 2025. The segment generated Adjusted EBITDA of $27.0 million, representing the largest contribution to the company’s overall results.

The detailed performance metrics for the Southern Timber segment are illustrated below:

Meanwhile, the Pacific Northwest Timber segment delivered $21.4 million in sales with operating income of $0.7 million and Adjusted EBITDA of $6.4 million in Q1 2025. This segment’s performance reflects the challenging market conditions in the region.

The Real Estate segment faced difficulties in the quarter, recording gross sales of $10.2 million across 1,031 acres at a weighted average price of $8,308 per acre. The segment reported an operating loss of $1.0 million, though it still contributed $2.0 million in Adjusted EBITDA.

Strategic Initiatives & Guidance

Rayonier has revised its 2025 financial guidance, reflecting both current performance and strategic changes. The company’s updated outlook provides insight into expected timber volumes, segment performance, and financial metrics for the remainder of the year.

The revised guidance details are shown in the following table:

A significant strategic development for Rayonier involves the sale of its New Zealand joint venture. The company has provided pro forma financial guidance that illustrates the impact of this transaction on its 2025 outlook, particularly for Adjusted EBITDA and Cash Available for Distribution.

As shown in the pro forma guidance table:

This transaction appears to be part of Rayonier’s broader capital structure realignment plan, which was mentioned in the company’s Q3 2024 earnings call. During that call, the company had announced timberland dispositions totaling 200,000 acres for $495 million, which were expected to increase pro forma CAD per share and reduce leverage.

Financial Position & Dividend Analysis

Rayonier maintained its debt level at $1,050.0 million as of March 31, 2025, unchanged from December 31, 2024. However, the company’s cash position decreased to $216.2 million from $303.1 million over the same period. The net debt to enterprise value ratio remained steady at 16%.

A concerning trend for investors is that Rayonier’s quarterly dividend of $0.27 per share now exceeds its Cash Available for Distribution of $0.13 per share. This imbalance raises questions about the sustainability of the current dividend level if performance does not improve in coming quarters.

The company’s liquidity position and CAD calculation are detailed in the following table:

Rayonier has maintained dividend payments for over 30 consecutive years, making any potential adjustment to its dividend policy a significant consideration for income-focused investors. The current dividend yield stands at approximately 4.4% based on the April 30, 2025 closing price of $24.46.

As Rayonier navigates these challenging conditions, investors will be watching closely to see if the company can reverse the negative performance trends and address the gap between its dividend payments and cash available for distribution. The impact of strategic initiatives, including the New Zealand joint venture sale, will be crucial in determining the company’s financial trajectory for the remainder of 2025.

Full presentation:

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