PotlatchDeltic Reports Strong Q3, Advances Rayonier Merger
PotlatchDeltic Corporation (PCH) has reported a strong third quarter, ending with $388 million in liquidity and successfully refinancing $100 million of debt. The company also made significant progress towards its planned merger with Rayonier, with shareholders set to receive 46% and 54% of the new entity respectively.
PCH's real estate segment performed exceptionally well, with two major transactions in Georgia generating $39 million in revenue. The company reported total adjusted EBITDA of $89 million for the quarter. The proposed merger is expected to bring substantial strategic and financial benefits, with synergies of $40 million anticipated through cost optimization.
PotlatchDeltic has made strides in natural climate solutions, securing solar option agreements for 34,000 acres and a lithium mineral lease covering 4,200 acres. The combined entity, set to emerge in early 2026, will control nearly 4.2 million acres of timberlands across 11 states. Despite analyst concerns about lumber pricing and real estate sustainability, management remains confident in the merger's potential and real estate demand.
The timberlands segment met its planned Q3 harvest volume of 1.9 million tons. However, the Wood Products segment posted an EBITDA loss of $2 million due to weak lumber prices. The company expects adjusted EBITDA in the fourth quarter to be lower than the third quarter results.
PotlatchDeltic's strong liquidity and successful debt refinancing, coupled with progress in the Rayonier merger and natural climate solutions, indicate a robust quarter. Despite challenges in lumber pricing and real estate sustainability, the company's confidence in the merger's strategic benefits and real estate demand persists. As the fourth quarter approaches, PotlatchDeltic anticipates lower adjusted EBITDA than the previous quarter.
