Norbord’s European mills continue to grow30 January 2012
Norbord’s European business continued to grow in 2011, with the operation’s earnings before interest, tax, depreciation and amortisation (EBITDA) up by US$7m to US$44m.
Increased panel prices offset substantially higher raw material costs for the division, which has three mills in the UK and one in Belgium. OSB prices average 8% higher, while chipboard and MDF prices grew 15% and 14% respectively.
European volumes grew by 10%, while a 3% growth was recorded in North America. Exports from the UK mills to Continental Europe increased again.
Group wide raw material costs increased by US$45m, with three-quarters of the increase attributable to the European business.
As a group, Norbord’s EBITDA more than halved to US$45m (2010: US$107m), mainly due to a 15% drop in North American OSB prices. The results show a net loss of US$11m.
The North American business generated EBITDA of US$14m, down from US$83m a year ago.
Norbord president and CEO Barrie Shineton described the annual results as “disappointing” but he was pleased that the group’s operations had performed well.
“Early indicators suggest some upside in both demand and price in North America as we move into the first quarter of 2012,” he said.
“The OSB supply chain is lean and less capacity appeared to be available at the end of the last year. And I believe our European business will continue to perform well, in spite of the evolving sovereign debt crisis that continues to dominate media headlines.”