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Norbord posts an operating loss for last year

24.02.2020 − 

Lower sales volumes and falling prices in North America and decreases in the price of OSB in Europe have slashed the trend in revenues and earnings booked by Norbord in 2019. North American OSB sales fell 5.2% to 6.145 billion sqft (3/8’’ basis) or 5.438 million m³. The dive was much stronger towards the year’s end in the wake of divestments carried out mainly starting in the third quarter; fourth-quarter sales slipped 17% in a year-on-year comparison and as much as 19% compared with the previous three-month period. Norbord’s European mills saw their sales end up marginally higher than in 2018 last year at 1.831 billion sqft or 1.620 million m³. The company attributed this improvement to factors including shifts in its product mix. Benchmark prices listed in Norbord’s financial report, which was released on 5 February, plunged to an average of US$210 per 1,000 sqft in the North Central region. The South East and Western Canada regions suffered similar decreases to US$187 and US$166 respectively. European OSB prices declined to €274 per m³, Norbord said.

North American revenues tumbled as much as 35.1% to US$1.237bn. Adjusted EBITDA was put at US$85m and total EBITDA at US$70m. European revenues reached US$494m. EBITDA stood at US$64m on an adjusted and unadjusted basis. Group revenues thus deteriorated by 28.6% to US$1.731bn. Adjusted EBITDA, which reached a record high of US$724m in 2018, plummeted to US$138m. The corresponding margin deteriorated to 8.0 %. The group even booked an operating loss of -US$16m. This figure includes a value adjustment of US$10m for the mid-November shutdown of line 1 at its OSB mill in Cordele, Georgia. The previous year’s figure included an US$80m value adjustment for its mill in 100 Mile House, British Columbia, which scaled back operations at that time and closed indefinitely in August 2019. The group also slipped into negative territory with a net loss of -US$42m; an adjusted net loss of -US$30m was also reported.

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