Rayonier Reports Separation Plans, Strong Quarterly Results
Rayonier Inc. unveiled plans to separate its performance fibers business from its forest resources and real estate operations into two publicly traded companies this year. "With an improving U.S. housing market, strong timber export markets, and the successful expansion of our cellulose specialties capacity, we concluded that now is the optimal time to pursue the separation of these two nonintegrated businesses," Chief Executive Paul Boynton said.
Shares jumped in early trading; as of Friday, the stock was down 24% over the past 12 months.
The as-yet-unnamed performance fibers company recorded revenue of more than $1 billion last year, and has about 675,000 metric tons of cellulose specialties capacity between its Florida and Georgia facilities.
Cellulose specialties are used in dissolving chemical applications that require a highly purified form to produce cellulose acetate and ethers, the company said. Rayonier said its products are used in a wide variety of end uses, including cigarette filters, cosmetics and explosives.
Rayonier recently expanded its performance fibers production capacity at its Jesup, Ga., mill by 190,000 metric tons, and expects to sell an additional 30,000 to 50,000 metric tons of cellulose specialties this year.
The remaining businesses will remain under Rayonier's name, with 2.6 million acres of timberlands, including 200,000 acres ready for real estate development in coastal Florida and Georgia. The forest resources business posted $382 million in sales last year, while its real estate arm earned $149 million in sales.
Rayonier's real-estate business obtains land-use entitlements and then seeks to improve their sales values.
Also on Monday, Rayonier reported better-than-expected fourth-quarter earnings and revenue. The company posted earnings of $80 million, or 62 cents a share, compared with $76 million, or 59 cents a share a year earlier. Revenue rose 35% to $520.2 million.
Analysts polled by Thomson Reuters recently expected per-share earnings of 49 cents on revenue of $396 million.
By Everdeen Mason
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