Norbord Reports Second Quarter 2019 Results; Declares Quarterly Dividend

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Q2 2019 HIGHLIGHTS

  • Adjusted EBITDA of $36 million
  • Loss of $0.17 per diluted share; Adjusted loss of $0.10 per diluted share
  • European shipments up 7% year-over-year
  • Termed out 2020 senior secured notes to 2027 at 5.75% coupon, upsized principal by $110 million to bolster liquidity
  • Declared quarterly variable dividend of C $0.40 per share for shareholders of record on August 30, 2019

TORONTO, ON (August 1, 2019) – Norbord Inc. (TSX and NYSE: OSB) today reported Adjusted EBITDA of $36 million in the second quarter of 2019 compared to $42 million in the first quarter of 2019 and $273 million in the second quarter of 2018. The decrease versus both comparative periods was primarily due to lower North American oriented strand board (OSB) prices. North American operations generated Adjusted EBITDA of $18 million compared to $23 million in the prior quarter and $256 million in the same quarter last year. European operations delivered Adjusted EBITDA of $21 million, unchanged versus both the prior quarter and same quarter last year.

“US homebuilding demand continued to be held back by affordability concerns and persistent record-breaking wet weather,” said Peter Wijnbergen, Norbord’s President and CEO. “For the third quarter in a row, we took extensive downtime across our North American mills which negatively impacted our production volumes and manufacturing costs. We also made the difficult decision to indefinitely curtail our 100 Mile House, BC mill starting in August as the mill is no longer viable due to a lack of wood supply at economic prices.”

“We are starting to see signs of improvement in the US housing market. Mortgage rates are back down below 4%. Homebuilders have rebalanced new home inventories and are reporting higher levels of buyer interest and net order growth for the first time since the fall. Housing economists’ forecast for unchanged 2019 starts implies 4% growth in the second half of the year which would support higher levels of OSB demand than the first half.”

“In Europe, our panel business had another good quarter, delivering year-over-year shipments growth and a strong 16% EBITDA margin. In Germany, the global trade war is starting to negatively impact macro export activity, putting downward pressure on OSB prices from the well above average levels we have enjoyed for the past year and a half. However, we expect this to accelerate the pace of OSB substitution and continue to drive rapid consumption growth.”

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Source: Norbord

 

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