POULSBO, Wash. - Overall average log price realizations improved slightly compared to the previous quarter, with lower-valued species mix masking improvements in the markets for Douglas-fir and whitewood sawlogs, according to Pope Resources, a leader in the timber industry. Pope Resources (NASDAQ: POPE) reported net income of $3.4 million, on revenue of $17.3 million for the quarter ended March 31, 2017. This compares to net loss attributable to unitholders of $1 million on revenue of $11.1 million for the first quarter of 2016.
"Our overall average log price realizations improved slightly compared to the previous quarter, with lower-valued species mix masking improvements in the markets for Douglas-fir and whitewood sawlogs," said Tom Ringo, Pope president and CEO. "We trace this improvement in log markets to reductions in log supply caused by unusual amounts of rain and snow in our Pacific Northwest operating region, combined with incremental demand due to market expectations of pending duties on Canadian lumber imports."
Cash provided by operations for the quarter ending March 31 was $2.7 million, compared to cash used in operations of $2 million for the first quarter of 2016.
In January, ORM Timber Fund II, Inc. (Fund II), a Pope-owned company that managed Pope's timber portfolios, sold a 6,500-acre parcel of timberland for $26.5 million, recognizing a gain on sale of $12.5 million, with $2.5 million of the gain attributable to Pope Resources' unitholders based upon the partnership's 20 percent interest in Fund II.
Harvest volume was 27.3 MMBF in Q1 2017 compared to 15.6 MMBF in Q1 2016, a 75% increase. These harvest volume figures do not include timber deed sales of 0.3 MMBF in Q1 2017 sold by ORM. The harvest volume and log price realization metrics cited below also exclude these timber deed sales, except as noted otherwise.
Average realized log price per thousand board feet (MBF) was $596 in Q1 2017 compared to $591 per MBF in Q1 2016, a 1% increase.
As a percentage of total harvest, volume sold to domestic markets in Q1 2017 decreased to 59% from 60% in Q1 2016, while the mix of volume sold to export markets was 22% in Q1 2017 compared to 18% in Q1 2016. Hardwood, cedar and pulpwood log sales make up the balance of harvest volume.
Fund II recognized a gain of $12.5 million on the sale of one of its tree farms in January 2017.
The Partnership acquired 1,648 acres of timberland in western Washington for $5 million.