Strong OSB demand buoys Norbord results30 January 2014
Panel producer Norbord has reported bumper profits on the back of improved OSB prices and higher shipment volumes.
It is also considering an expansion of its European OSB capacity as its sees OSB consumption in Europe increasing by 50% over the next decade.
Toronto-based Norbord posted full-year earnings before interest, tax, depreciation and amortisation (EBITDA) of US$287m (2012: US$188m), as the US housing industry gained further traction leading to increased OSB demand, while a strong rebound in the UK housing sector boosted the company's European operations.
Norbord said OSB prices were lower in the fourth quarter, after reaching their highest level in nine years earlier in 2013. The North Central benchmark OSB prices peaked at US$430 per thousand ft2 and finished the year at US$228, averaging at US$315.
"European panel prices remained on a positive trend, with OSB and particleboard prices increasing 8% and 7% respectively in 2013," Norbord said. "MDF prices improved 4%."
North American OSB shipments were up 7% in 2013. The Jefferson mill in Texas was restarted in mid-2013 and achieved full capacity by the fourth quarter, while the curtailed Huguley mill in Alabama will have its press line rebuilt for a restart in mid-2015.
In Europe, all of Norbord's panel mills (three in the UK and one in Belgium) continued to run on full operating schedules and at 95% capacity. The division recorded earnings (EBITDA) of US$46m in 2013 (2012: US$39m), with shipments flat year-over-year.
"I remain positive about the unfolding housing recoveries in all our core markets," said Peter Wijnbergen, Norbord's president and CEO.
"In North America, we expect new home construction activity to support further OSB demand growth, keeping pace with the additional capacity that was brought back on line in 2013. Meanwhile, our European business is poised for another year of improved earnings."