Norbord Q2 Operating Results Take a Hit, Lower OSB Prices Blamed

SEATTLE (Scrap Monster): Norbord Inc.- the world's largest oriented strand board (OSB) producer reported adjusted EBITDA of $36 million in Q2 this year, as compared with $273 million during the corresponding quarter a year before. The drop was mainly attributed to lower OSB prices in North America during the comparable periods.

According to company press release, the adjusted EBITDA generated by North American operations recorded sharp decline from $256 million to $18 million over the year. Meantime, European operations reported adjusted EBITDA of $21 million, unchanged from the year-ago quarter.

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The U.S. housing demand continued to be negatively impacted, with year-to-date U.S. housing starts down by 4% over the previous year. The softening demand from homebuilding led to decline in North American benchmark OSB prices across all regions. Year-to-date OSB shipments were down 5%, in line with slowdown in U.S. homebuilding demand. In Europe, the company’s shipments surged higher by 7% in Q2 this year, compared to Q2 last year. The panels business delivered strong shipments growth and strong EBITDA.

Peter Wijnbergen, President and CEO, Norbord said that the extensive downtimes at mills across North American region have negatively impacted its production volumes and manufacturing costs. The initial signs of improvement in U.S. housing market suggest higher levels of OSB demand during the second half of the year, he added.