Norbord Reports Third Quarter 2017 Results

Norbord Inc. (TSX and NYSE:  OSB) today reported Adjusted EBITDA of $200 million for the third quarter of 2017 versus $115 million in the third quarter of 2016 and $165 million in the second quarter of 2017. The improvement is primarily due to higher North American oriented strand board (OSB) prices and shipment volumes. North American operations generated Adjusted EBITDA of $184 million compared to $106 million in the same quarter last year and $157 million in the prior quarter. European operations delivered Adjusted EBITDA of $14 million versus $10 million in the same quarter last year and $9 million in the prior quarter.

“Our third quarter performance continued to accelerate and we delivered our best Adjusted EBITDA result in 13 years,” said Peter Wijnbergen, Norbord’s President and CEO. “In North America, our shipment volumes increased 5% and benchmark OSB prices were 36% higher year-over-year due to already strong OSB demand that was pushed even further by the hurricanes in the US south. In Europe, our financial performance is back on track as improved panel prices outpaced the currency translation headwind from the weaker Pound Sterling and the negative impact of higher resin prices.”

“I am pleased to report that our Huguley, Alabama mill and the new line at our Inverness, Scotland mill both produced first board in September and started production in October. Once fully ramped up, this additional capacity will help us fulfill contract requirements for next year and serve rapidly growing customer demand in both our North American and European markets.”

Norbord recorded Adjusted earnings of $121 million or $1.39 per diluted share ($1.40 per basic share) in the third quarter of 2017 versus $58 million or $0.67 per diluted share ($0.68 per basic share) in the third quarter of 2016 and $95 million or $1.10 per share (basic and diluted) in the second quarter of 2017.

In North America, year-to-date US housing starts were up 3% versus the same period in 2016 with single-family starts (which use approximately three times more OSB than multi-family) up by 9%. The seasonally adjusted annualized rate (SAAR) was 1.13 million in September, 6% higher than the pace at this time last year, while the pace of housing permits (the more forward-looking indicator) was 1.22 million. Both the starts and permits SAAR numbers for September were negatively impacted by the hurricanes in Texas and Florida. The consensus forecast from US housing economists is approximately 1.21 million starts in 2017, which suggests a 3% year-over-year improvement, with the single family component at 71%, up from 67% in 2016.

North American benchmark OSB prices increased significantly in the third quarter of 2017 as new home construction activity and OSB demand continue to improve. OSB demand was pushed even further in the quarter due to hurricanes in the US south. Benchmark OSB prices increased steadily in all regions throughout the quarter and continued to reach multi-year highs, with the North Central benchmark OSB price averaging $409 per Msf (7⁄16-inch basis) for the quarter.

In Europe, Norbord’s core panel markets continued to strengthen, with double-digit year-over-year OSB demand growth in both the UK and Germany. In local currency terms, average panel prices were up 12% from the same quarter last year and 6% versus the prior quarter.
more detail at:  https://www.prnewswire.com/news-releases/norbord-reports-third-quarter-2017-results-increases-quarterly-dividend-653572933.html

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