Operating income in the Southern Resources segment was $22 million, an increase of $7 million from the $15 million reported during the second quarter of 2011. Both sawlog and pulpwood prices were slightly higher (approximately $1 per ton) than the levels reported for the second quarter of 2011. As planned, harvest volumes in 2012 were higher than those in the same period of 2011. The company’s harvest continues to emphasize pulpwood and smaller diameter sawlogs to maximize long-term value of the forest. Pulpwood volumes were up 341,000 tons, or 21%, higher compared to the second quarter of 2011. The sawlog harvest was 406,000 tons, or 36%, higher, than the same period of 2011.
The Real Estate segment reported total revenue of $47 million and operating income of $29 million. Second quarter 2011 Real Estate segment revenue was $79 million, primarily consisting of $62 million of conservation transactions in the South. The second quarter 2011 operating income was $50 million. The 2012 sales consisted of $37 million of smaller rural land sales across the company’s holdings and the completion of a $10 million conservation easement in the state of Maine as part of its Moosehead Lake Concept Plan.
The Manufacturing segment reported $9 million of operating income for the second quarter, compared to the $5 million operating income reported for the second quarter of 2011. Profitability in each of the product lines improved on higher prices and sales volumes. Sales volumes for plywood and medium density fiberboard (MDF) increased 15 percent and 22 percent respectively. Lumber sales volume increased 2 percent and lumber prices increased approximately 4 percent. Plywood prices increased 7 percent and MDF prices improved 2 percent.
OutlookBusiness conditions in most of the company’s business segments have improved slowly over the past year. The company expects a slow pace of recovery to continue through the remainder of the year.