Monday, May 2, 2016
Norbord Inc. (TSX and NYSE: OSB) reported Adjusted EBITDA of $61 million for the first quarter of 2016 versus $16 million in the first quarter of 2015 and $57 million in the fourth quarter of 2015. The year-over-year improvement is primarily due to higher North American oriented strand board (OSB) prices and shipment volumes as well as lower resin prices and the weaker Canadian dollar. North American operations generated Adjusted EBITDA of $53 million in the quarter compared to $11 million in the same quarter last year and $51 million in the prior quarter. European operations delivered Adjusted EBITDA of $10 million, $3 million higher than the same quarter last year and in line with the prior quarter.
“Our first quarter Adjusted EBITDA result is almost a four-fold increase from a year ago. I’m also encouraged by the sequential improvement despite the seasonally lower North American benchmark OSB prices,” said Peter Wijnbergen, Norbord’s President and CEO. “Our mills in both North America and Europe continued to deliver strong operational results, generating $9 million in Margin Improvement Program gains. In the 12 months since our merger with Ainsworth, we have captured $32 million in annualized synergies and remain on track to deliver our full $45 million target by the end of 2016.”
Peter continues: “The pace of US housing starts is 14% higher than this time last year and single-family building activity is up even more. North American OSB demand continues to grow, sales to all our key customer segments are improving and our order files are strong. Benchmark OSB prices are currently up 16% since their February low as the seasonal pick-up in demand begins to materialize.”
“In Europe, our panel business delivered another solid quarter with $10 million of Adjusted EBITDA, reflecting sales growth and record utilization at our mills. OSB prices continued to rise on the continent and are now starting to turn up in the UK. Work is underway on our $135 million capital investment to modernize and expand our Inverness, Scotland OSB mill, with construction commencing this quarter.” He concluded.
Norbord recorded Adjusted earnings of $20 million or $0.23 per share (basic and diluted) in the current quarter compared to an Adjusted loss of $14 million or $0.16 per share in the same quarter last year and Adjusted earnings of $16 million or $0.19 per share in the prior quarter.