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LP posts operating loss in OSB division in Q1 2019

17.05.2019 − 

In the first quarter, the losses suffered in sales revenue and results by the OSB division of Louisiana-Pacific Corp. continued undiminished. As in the preceding quarters, this development is attributable above all to the 29 % lower OSB prices than a year earlier. In the OSB division, the reduction in standard panels (-35 %) turned out to be more pronounced again than in higher-quality assortments (-25 %), which are meanwhile covered by the “Structural Solutions” division. Whereas the volume of sales of standard boards fell by 7 % to 571m sqft (3/8” basis), Structural Solutions’ deliveries were 2 % higher than a year earlier at 390m sqft. The division’s sales revenue consequently decreased by a third to 208m US$.

In the “Siding” division, and as had been the case in the previous quarters, growth was registered in the sales volume (+8 %) as well as prices (+5 %) in by far the most important product segment of “SmartSide” strand sidings. Revenue generated from sales of OSB fell by 83 %, however. Besides the 49 % lower OSB prices in the Siding division, this was also contributed to by the lower volume of sales arising from the switch underway at the Canadian OSB works in Dawson Creek, British Columbia, since November. The start-up took place on schedule towards the end of the first quarter. The first sidings produced in Dawson Creek have also been delivered in the meantime.

Owing to the positive 4 % development in the siding activities, the division’s sales revenue rose to 236m US$. The key performance figures, on the other hand, failed to match those of year earlier due to the costs involved in the Dawson Creek conversion. Adjusted EBITDA fell by 7 % to 42m US$ and the operating result decreased 8 % to 33m US$.

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