Norbord posts mixed results for 2014
Jan. 28, 2015 – The slower-than-anticipated recovery of the U.S. housing market has significantly impacted Norbord’s 2014 financial results.
Norbord Inc. reported adjusted EBITDA of $90 million in 2014 compared to $287 million in 2013 on 31% lower North American benchmark oriented strand board (OSB) prices. North American operations generated adjusted EBITDA of $54 million versus $255 million in the prior year and European operations delivered adjusted EBITDA of $47 million versus $46 million in the prior year. In the fourth quarter of 2014, Norbord recorded adjusted EBITDA of $15 million, unchanged from the previous quarter and $14 million lower than the fourth quarter of 2013.
"US housing continues to recover, albeit at a more gradual pace than originally anticipated. This put pressure on the North American OSB market, which in turn impacted our financial results," said Peter Wijnbergen, Norbord's President and CEO. "However, Norbord's mills in both North America and Europe delivered excellent operational results this year, with six mills setting annual production records. We achieved $24 million in Margin Improvement gains, reflecting the ongoing effort across our company to reduce manufacturing costs and increase productivity. Our European panel business also had another strong year in the face of an increasingly challenging macroeconomic environment."
Norbord generated earnings of $26 million or $0.49 per share ($0.48 per share diluted) for the full year 2014 compared to $149 million or $2.92 per share ($2.79 per share diluted) in 2013. The Company recorded earnings of $3 million or $0.06 per share (basic and diluted) in the fourth quarter of 2014 versus $2 million or $0.04 per share (basic and diluted) in the same quarter of 2013.
"Looking ahead, I remain positive about the unfolding housing recoveries in all our core markets. Customer feedback suggests the North American OSB supply chain is lean, which should support improving demand as we head into the spring building season. I am confident our European business will deliver continued strong results, in spite of the pressure in Continental OSB markets, as OSB substitution is accelerating and the economy in our largest market, the UK, is outperforming the rest of Europe."