PotlatchDeltic (PCH) Q3 2024 earnings summary

Executive summary

• Q3 2024 adjusted EBITDA was $45.9 million (18% margin), down sharply from Q2 due to the absence of a large land sale, with Timberlands stable, Wood Products pressured by lower lumber prices and Waldo sawmill costs, and Real Estate supported by strong lot sales.

• Q3 2024 net income was $3.3 million ($0.04 per share) on $255.1 million revenue, down from $23.7 million in Q3 2023, mainly due to weak lumber prices and Waldo sawmill downtime.

• Waldo, Arkansas sawmill modernization was completed on time and budget, with ramp-up underway and expected to add $25 million in annual adjusted EBITDA at full capacity.

• Share repurchases totaled $27 million year-to-date, with $98 million remaining authorized; liquidity at quarter-end was $460 million, including $161 million in cash.

• Dividend yield was 4.0%, with $142 million annual dividend run rate and $0.45 per share paid in Q3.

Financial highlights

• Q3 2024 adjusted EBITDA was $45.9 million, down from $103 million in Q2 and $56.3 million in Q3 2023; net income was $3.3 million, EPS $0.04.

• Q3 2024 revenue was $255.1 million, down $10.4 million year-over-year; operating income was $7.2 million, down from $36.2 million in Q3 2023.

• Average lumber price realization fell 5% sequentially to $402/mbf; lumber shipments dropped 19 million board feet to 267 MMBF.

• Rural land sales exceeded 6,500 acres at $3,700/acre; 53 residential lots sold at a record $205,000/lot.

• Interest expense rose to $9.6 million in Q3 2024; net cash from operations was $26.5 million.

Outlook and guidance

• Q4 2024 adjusted EBITDA expected to be comparable to Q3, with higher lumber prices and improved Wood Products costs offset by lower harvest and real estate activity.

• Q4 timber harvest forecast: 1.8–1.9 million tons, 80–81% in the South; northern sawlog prices expected to rise 2–3%.

• Lumber shipments projected at 275–285 million board feet in Q4, with average prices up 8% over Q3.

• Rural land sales guidance: 5,500 acres at $2,900–$2,950/acre; 40 residential lots expected to close.

• 2024 capital expenditures expected at $100–$110 million, including Waldo Modernization Project.