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 STAMFORD, Conn., Aug. 2 /PRNewswire/ -- Rayonier Forest Resources Company (RFR), the managing general partner of Rayonier Timberlands, L.P., (NYSE: LOG) announced preliminary second quarter and six months 1993 partnership results today. Overall, results were very strong as a result of late 1992 and early 1993 escalating timber and wood pricing that arose out of concerns over timber supply in the U.S.
 Sales for the quarter were $30.4 million, an increase of $3.5 million over the second quarter of 1992. Timber sales for the period were $30.0 million, increasing $3.8 million from the prior year, with significantly improved prices partially offset by lower harvest volumes. Timberland and land sales were $0.4 million in 1993, a decrease of $0.3 million from the second quarter of 1992.
 Partnership income of $22.3 million was $2.7 million higher than last year's second quarter. Income per publicly traded class A unit increased 11 cents to $1.19 while operating cash flow allocable to a class A unit increased 9 cents to $1.24.
 Sales for the first six months of 1993 were $61.6 million as compared to $64.0 million in the corresponding 1992 period. Timber sales for the first half of $61.1 million increased $6.4 million over the comparable 1992 period due to substantially higher prices only partially offset by lower harvest volumes. Timberland and land sales of $0.5 million were $8.8 million lower than 1992 first half results, which included a first quarter timberland sale of $8.6 million to the Quinault Indian Nation.
 Partnership income of $45.3 million for the first half was $2.7 million lower than the corresponding 1992 period, which included $8.0 million of income from the Quinault timberland sale. Income per class A unit decreased 7 cents to $2.42 while operating cash flow allocable to a class A unit decreased 12 cents to $2.54 per unit. The prior year Quinault sale accounted for 31 cents and 32 cents of income and cash allocable, respectively, per class A unit. Excluding the effect of last year's Quinault transaction, income per publicly traded class A unit increased 24 cents and operating cash flow allocable to a class A unit increased 20 cents.
 Limited timber availability in the Northwest, due to environmental restrictions and litigation, caused contract stumpage prices to rise steadily late in 1992 and the first half of 1993. Compared to the prior year, Northwest stumpage prices were 63 percent and 42 percent higher in the second quarter and first six months, respectively.
 However, during the end of the second quarter there was downward pressure on the prices that the partnership's customers received for their export log production as exports to the Pacific Rim slowed due to rising log inventories in Japan and Korea and foreign exchange limitations in China. Demand for Northwest timber was also negatively affected in the second quarter by a marked increase in alternative global timber supplies stimulated by earlier higher prices. As a result, current contract pricing has declined. Customers also slowed their harvesting, and Northwest stumpage volumes decreased 20 percent in the second quarter and 25 percent during the first six months from the respective 1992 periods. Most of the partnership stumpage sales contracts were committed six to nine months ago, and the effect of the decline in prices under more recently awarded contracts will not be felt until the timber is subsequently harvested from partnership lands later this year or in 1994.
 In the Southeast, serious wet weather conditions and concerns over nationwide timber availability sparked a steady increase in timber prices during the first quarter. Strong demand for partnership timber continued into the second quarter but then weakened due to softness in the pulp and paper industry and improved weather conditions. Second quarter pine prices increased 22 percent from last year, while prices for the first six months rose 27 percent over last year. Southeast pine volumes fell 3 percent in the second quarter and 9 percent for the six months to date versus the same periods in 1992 generally reflective of softness in user markets.
 At the end of the first half, 50 percent of the projected total year's harvest in the Northwest and 58 percent of the projected pine harvest in the Southeast, representing a combined 55 percent of the current projection of this year's harvest, had been cut. The comparable first half harvest percentages for 1992 based upon the final full year harvest were 51 percent, 68 percent, and 60 percent, respectively.
 Although timber demand and pricing have declined somewhat from the intense activity earlier this year, bid prices received on new contracts issued in the quarter remained higher than last year in both regions. In the Northwest, where approximately 21 percent of this year's current harvest plan volume was awarded during the second quarter, bid prices exceeded last year's second quarter level by 141 percent. Contracts equaling approximately 8 percent of this year's Southeast expected harvest were awarded during the second quarter at bid prices 20 percent above the prior year. Expiration dates on most of these contracts extend into 1994. Contract terms allow for harvesting over various time periods and volume currently under contract may not be fully cut out within this fiscal year, especially if customers' log prices continue to fall.
 ITT Rayonier Inc., the forest products subsidiary of ITT Corporation, owns 74.7 percent of the 20 million outstanding class A units of Rayonier Timberlands, L.P. The balance is publicly traded on the NYSE.
 Preliminary Financial Highlights
 Second Quarter 1993
 (Thousands of dollars, except per unit data, unaudited)
 Quarter ended June 30 1993 1992
 Sales $30,372 $26,866
 Partnership income 22,322 19,670
 Income per publicly traded
 class A unit $1.19 $1.08
 Operating cash flow allocable
 to a publicly traded class A unit 1.24 1.15
 Six months ended June 30 1993 1992
 Sales $61,581 $64,024
 Partnership income 45,336 47,995
 Income per publicly traded
 class A unit $2.42 $2.49
 Operating cash flow allocable
 to a publicly traded class A unit 2.54 2.66
 Rayonier Timberlands, L.P. grows and sells timber on 794,000 acres in the Southeast U.S. and on 369,000 acres in the Northwest U.S. The class A units are listed on the New York Stock Exchange and trade under the symbol LOG.
 -0- 8/2/93
 /CONTACT: Martin Arnold of Rayonier Forest Resources Company, 203-964-4621/

CO: Rayonier Forest Resources Company ST: Connecticut IN: PAP SU: ERN

LD-OS -- NY114 -- 8567 08/02/93 17:25 EDT
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Publication:PR Newswire
Date:Aug 2, 1993

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