Slower US housing recovery dents Norbord group profits
10 November 2014A slower than forecast recovery in the North American housing sector reduced Norbord’s earnings in the third quarter but the panel manufacturer remains optimistic for prospects in 2015.
The company reported earnings before interest, tax, depreciation and amortisation (EBITDA) of US$15m, compared to US$33m in the second quarter and US$45m a year ago. North American operations generated EBITDA of US$7m in Q3 (2013 Q3: US$36m), while European operations generated EBITDA of US$11m (2013 Q3: US$12m).
“In response to challenging North American OSB market conditions, we moved most of our annual maintenance shuts forward to the third quarter and curtailed additional production at several mills,” said Peter Wijnbergen, Norbord president and CEO.
He said he expected North American OSB pricing to continue to move sideways with the slower demand experienced at the end of the year. “However, I remain optimistic that our OSB sales will improve next year as the US housing recovery continues to unfold.”
US housing analysts had predicted 2014 housing starts of up to 1.2 million, but the latest forecast is just below 1 million, which is still 8% up on a year ago.
Norbord’s performance in Europe, where it has mills in the UK and Belgium, remained strong in Q3, with year-to-date shipments up 6% as a result of growth in the core UK, German and Benelux markets.
Norbord reported growth in its European particleboard prices, while MDF prices held firm.
OSB prices have been under pressure as eastern European supply is redirected towards the west due to the conflict in Ukraine.
