Low OSB prices and downtime in North America hit Norbord group profits
22 August 2019Global panel producer Norbord Inc has reported adjusted EBITDA of US$36m in the second quarter of 2019 compared to US$42m in the first quarter of 2019 and US$273m in the second quarter of 2018.
The decrease versus both comparative periods was primarily due to lower North American OSB prices.
North American operations generated adjusted EBITDA of US$18m compared to US$23m in the prior quarter and US$256m in the same quarter last year.
European operations delivered adjusted EBITDA of US$21m, unchanged versus both the prior quarter and same quarter last year.
“US homebuilding demand continued to be held back by affordability concerns and persistent record-breaking wet weather,” said Peter Wijnbergen, Norbord’s President and chief executive officer.
“For the third quarter in a row, we took extensive downtime across our North American mills which negatively impacted our production volumes and manufacturing costs. But he reported signs of improvements in the US housing market.
“In Europe, our panel business had another good quarter, delivering year-over-year shipments growth and a strong 16% EBITDA margin. In Germany, the global trade war is starting to negatively impact macro export activity, putting downward pressure on OSB prices from the well above average levels we have enjoyed for the past year and a half. However, we expect this to accelerate the pace of OSB substitution and continue to drive rapid consumption growth.”
