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Better Lumber Market Drives Deltic Timber Profit Higher

2 min read

Deltic Timber Corp. of El Dorado on Wednesday announced net income of $4.2 million, or 35 cents per share, in the second quarter of 2016 compared with $800,000, or 7 cents per share, for the second quarter of 2015.

The company (NYSE: DEL) had $56.8 million in net sales in the second quarter compared with $45.7 million for the same quarter last year.

Deltic said its manufacturing and real estate segments generated more operating income, a result of an improved lumber market, the sale of more residential lots and one commercial real estate acreage sale.

Twenty-two lots in a neighborhood in the company’s Chenal Valley development were sold, as was a 10.8-acre commercial real estate site in the same development, the company said.

“The company’s financial performance for the second quarter is indicative of the potential income and cash flow that Deltic’s excellent group of operating assets can produce, even when markets are only marginally favorable,” CEO Ray Dillon said in a news release.

“In the Woodlands segment, we continue to achieve a sustainable harvest volume of our pine sawtimber; however, pine pulpwood markets remain weak,” he said.

“Our investment in a new small-log line at our Ola Mill, that will be operational in October, will allow us to better utilize small wood from our forest maintenance thinning activity in our sawmill,” he added. “In the manufacturing segment, we saw an improvement in the lumber market during the quarter, allowing us to run additional hours and sell more lumber at a higher average sales price, while maintaining our market share and balancing supply with demand.”

The operating performance at the company’s Del-Tin Fiber continued to improve. Deltic’s woodlands segment generated operating income of $4.4 million for the second quarter compared with $4.9 million for the same period in 2015.

The company harvested 203,773 tons of pine sawtimber during the quarter, an 8 percent increase from the 189,480 tons harvested in second quarter of 2015.

The average per-ton sales price for pine sawtimber was $27 for the second quarter of both 2016 and 2015.

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