Catchmark Timber (NYSE:CTT) shares have dropped nearly 18% today as the lumber REIT announced a dividend cut amidst a separate operational announcement.

CTT announced it was cashing out of its joint venture with TexMark Timber Treasury, L.P. (Triple T), receiving a $40M payment that will go towards paying down debt. The company reaffirmed adjusted EBITDA guidance for 2021, saying results would come in on the high end of that range.

But in the same release, CTT said that due to the loss of the asset management fee, it would be cutting the dividend to $.3/share annually, or $.075/quarter, starting in Q4, from the previous $.54/$.135 level.

“We believe the right-sizing of Catchmark’s annualized dividend rate is a prudent decision that will enable the company to prioritize investing in the growth of its core portfolio which will ultimately enhance earnings growth and net asset value over time. In addition, the anticipated annualized dividend rate for 2022 should enable us to maintain our historical payout ratio of 75% to 85% of cash available for distribution,” said Douglas D. Rubenstein, Chairman of the Board for Catchmark.

Catchmark had a strong Q2 earnings report off of high lumber prices. Shares are now up 6.5% for the year, as the sell-off wipes out much of the stock’s gains.

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