Norbord posts lower quarterly earnings1 November 2019
Global wood-based panels producer Norbord has posted significantly lower earnings than a year ago due mainly to the drop off of North American OSB prices.
Norbord’s group earnings before interest, tax, depreciation and amortisation (EBITDA) were US$33m in Q3, compared to US$211m a year ago. It was also down from US$36m in Q2, driven by lower panel prices and shipments in Europe.
North American operations generated adjusted EBITDA of US$24m (Q3 2018: US$190m), while European operations delivered adjusted EBITDA of US$11m, (Q3, 2018: US$23m).
Peter Wijnbergen, Norbord’s President and CEO said improving North American housing fundamentals had yet to translate into a significant recovery in OSB markets.
“We took extensive downtime across our North American mills for the fourth straight quarter to ensure Norbord continues to match production to demand.
"In addition to the indefinite curtailment of our 100 Mile House, British Columbia mill in August, we made the difficult decision to indefinitely curtail Line 1 of our Cordele, Georgia mill effective mid-November.”
Norbord’s European panels business was challenged by continued slowing of industrial demand in Germany, where the effects of the global trade war are being felt on that export-oriented economy.
“As a result, panel prices have rolled over from the well above-average levels experienced the past couple of years,” added Mr Wijnbergen.
“However, we expect this softening of prices to help stimulate the pace of OSB substitution and continue to drive strong consumption growth in residential construction markets.”
In Europe, Norbord’s shipments were down 7% versus the prior quarter and 6% year-over-year due to the typical seasonal demand slowdown during the European summer holiday season and continued slowing of German industrial production.
The European mills produced at 84% of stated capacity in the quarter.