Friday, February 12, 2021
Norbord Inc., a wholly-owned subsidiary of West Fraser Timber Co. Ltd. effective February 1, 2021, has reported Adjusted EBITDA of $865 million for the full-year 2020 compared to $138 million in 2019. The improvement was due to significantly higher realized North American oriented strand board (OSB) prices, productivity improvements and lower raw material prices, partially offset by higher mill profit share costs attributed to higher earnings, lower shipment volumes and higher raw material usages. North American operations generated Adjusted EBITDA of $832 million compared to $85 million in the prior year and European operations delivered Adjusted EBITDA of $48 million compared to $64 million in the prior year.
For the fourth quarter of 2020, Norbord reported Adjusted EBITDA of $384 million compared to $322 million in the third quarter of 2020 and $27 million in the fourth quarter of 2019. The quarter-over-quarter increase was primarily driven by higher realized North American OSB prices, partially offset by lower shipment volumes, while the year-over-year increase was due to significantly higher North American OSB prices and higher shipment volumes. North American operations generated Adjusted EBITDA of $370 million in the fourth quarter compared to $310 million in the third quarter of 2020 and $20 million in the fourth quarter of 2019, and European operations delivered Adjusted EBITDA of $20 million compared to $16 million in the prior quarter and $11 million in the same quarter last year.
“The past year was truly remarkable in many respects for Norbord,” said Peter Wijnbergen, President & CEO of Norbord and now President, Engineered Wood of West Fraser. “After adjusting our production strategy in response to the demand challenges brought about by the COVID-19 pandemic in the first half of the year, OSB demand from new home construction and repair & remodeling recovered beyond expectations and forecasts in the second half, lifting North American benchmark prices to all-time highs. In fact, the recovery of demand was so robust that we reported back-to-back record quarterly results in the third and fourth quarters. In Europe, our results were more adversely impacted by the pandemic though we saw steady improvement in the back half of the year with panel prices recovering and production ramping up at the recently commissioned Inverness, Scotland Phase 2 expansion.”
“Given all that has transpired this year, I am extremely pleased with our team’s ability to remain focused within the strict protocols required by the pandemic and significantly improve our safety performance. I am also proud that we quickly learned how to scale our production to demand while containing manufacturing costs and achieving record annual production at three of our mills during these extraordinary times. Further, we were able to release our inaugural ESG report as planned before the end of the year.”
“With customer demand exceeding our ability to supply it, we announced the intended spring 2021 resumption of OSB production at our Chambord, Quebec mill as part of our flexible operating strategy. We remain optimistic that the worst of the pandemic has passed but we also recognize that economic uncertainty remains elevated and our business is inherently cyclical, therefore we remain vigilant. We will continue to focus on the health and safety of our employees as well as our customers’ needs, and on managing the business to be resilient, flexible and sustainable.”
“As we move forward with West Fraser as one organization, I want to acknowledge my Norbord colleagues for all their commitment and hard work, especially this past year. I look forward to continuing to work together as President of Engineered Wood at West Fraser as we embark on a new and exciting next chapter in our company’s story.”