TORONTO – Norbord Inc. reported Adjusted EBITDA of $165 million for the second quarter of 2017 versus $94 million in the second quarter of 2016 and $103 million in the first quarter of 2017. The improvement is primarily due to higher North American oriented strand board (OSB) prices and shipment volumes.
“Our second quarter Adjusted EBITDA result is our best since 2004,” said Peter Wijnbergen, Norbord’s president and CEO. “The improved operational performance of our North American mills resulted in lower manufacturing costs and higher shipments this quarter. OSB demand remains strong as U.S. housing starts continue to recover and benchmark OSB prices are currently at multi-year highs.”
In North America, year-to-date U.S. housing starts were up 4 per cent versus the same period in 2016, according to the company. Single-family starts, which use approximately three times more OSB than multi-family, increased by 8 per cent.
North American benchmark OSB prices improved significantly in the second quarter of 2017 as new home construction activity and OSB demand continue to improve, Norbord reports. Benchmark OSB prices declined briefly in mid-May before recovering by the end of June, and the North Central benchmark OSB price averaged $330 per Msf (7/16-inch basis) for the quarter.
The company’s North American OSB shipments increased three per cent year-over-year and seven per cent quarter-over-quarter due to increased mill productivity and fewer maintenance shuts than the first quarter. Approximately 25 per cent of Norbord’s OSB sales volume went to specialty end-uses (industrial applications and export markets), which demonstrates progress toward the company’s long-term goal of 50 per cent.
The company’s $135 million modernization and expansion of its Inverness, Scotland OSB mill remains on budget and on track to start up in the second half of 2017, with no disruption to existing production volumes in the interim.
As previously announced in June, the Quebec Minister of Forests, Wildlife and Parks has granted Norbord a wood allocation for its curtailed Chambord, Quebec mill that will take effect on April 1, 2018. The company reports that it does not currently have plans to restart Chambord, but will continue to monitor market conditions.