Norbord reported Adjusted EBITDA of USD 103 million (24.4% margin vs 15.9% in 1Q2016) for 1Q2017, 68.6% higher y-o-y. The company links the year-over-year improvement primarily primarily with higher North American OSB prices and shipment volumes.
North American operations generated Adjusted EBITDA of USD 102 million compared to USD 53 million in the same quarter last year and USD 108 million in the prior quarter. European operations delivered Adjusted EBITDA of USD 6 million versus USD 10 million in both comparative quarters
Peter Wijnbergen, Norbord’s President and CEO, commented:
“We are enjoying robust market conditions in North America reflecting strong growth in US housing starts that continues to drive increasing demand for OSB. Our first quarter Adjusted EBITDA result is a significant improvement over the first quarter of last year even though we undertook maintenance activity to ensure our mills were ready for the spring home building season that is now underway. As we enter the second quarter, demand from all our key customers is strong, supply chain inventories remain at minimal levels and benchmark prices are currently 35% higher than this time last year.
In Europe, we continue to face a post-Brexit translation headwind from the weaker Pound Sterling, and this quarter included the additional impact of higher resin prices that exceeded the panel price increases we’ve seen to-date. Our key markets remain strong, with double-digit demand growth in both the UK and Germany as OSB continues to gain market share versus plywood. Our project to modernize and expand the Inverness, Scotland OSB mill to serve this rapidly growing customer demand remains on budget and on track to start up in the second half of this year.
Finally, our Board has tripled the quarterly dividend to CAD 0.30 per share. This is the first increase since we introduced our variable dividend policy four years ago and reflects the strength of our cash flow and balance sheet and our confidence in the outlook for Norbord.”
Earlier Norbord announced modernization and expansion of its OSB mill in Inverness, the UK.
The company is an international producer of wood-based panels with assets of around USD 1.8 billion, employing approximately 2,600 people at 17 plant locations in the United States, Europe and Canada. Norbord is one of the world’s largest producers of oriented strand board (OSB). In addition to OSB, Norbord manufactures particleboard, medium density fibreboard (MDF) and related value-added products.