LP continues to make loss

OSB and engineered wood product divisions operated by Louisiana-Pacific (LP) continued to make losses in the third quarter.

LP’s considerable OSB manufacturing business recorded an operating loss of US$16m (2010: US$5m loss) from flat sales of US$139m.

Prices decreased 7%, resulting in a US$9m drop in profitability, while sales volumes rose 5%.

Seven OSB facilities are currently being operated by LP, with three other factories indefinitely curtailed due to market conditions.

LP’s engineered wood products division, comprising I-joists, LVL and LSL saw sales rise 44% to US$55m, with operating losses decreasing to US$3m from US$5m a year ago.

The improved results were driven by increased sales volumes, primarily on export sales and improved operations at the LSL facility.

“During the third quarter, LP was required, due to accounting rules, to record a US$62m impairment on our Houston LSL facility,” said CEO Rick Frost.

But he said LP was very committed to LSL as a product and saw significant opportunities for it in the future.

LP’s siding division recorded a US$12m operating profit.

The group said the base US economy was fairly flat, despite some recent good news in housing starts and remodelling activity.

For the nine months ended September 30, LP’s losses extended to US$115m from US$30m a year earlier.