Norbord reports 2020 Q1 earnings and COVID-19 response
Norbord Inc. today reported Adjusted EBITDA of $75 million for the first quarter of 2020 compared to $27 million in the fourth quarter of 2019 and $42 million in the first quarter of 2019. The quarter-over-quarter increase was primarily driven by higher realized North American oriented strand board (OSB) prices and shipments while the year-over-year increase was driven by higher realized North American OSB prices and lower raw material and energy prices, partially offset by lower shipments. North American operations generated Adjusted EBITDA of $68 million compared to $20 million in the fourth quarter of 2019 and $23 million in the first quarter of 2019, and European operations delivered Adjusted EBITDA of $10 million compared to $11 million in the fourth quarter of 2019 and $21 million in the first quarter of 2019.
“The first quarter of this year was off to a strong start, as the improved housing activity in late 2019 carried into 2020. In fact, our Adjusted EBITDA almost doubled from year-ago levels and was our best result in six quarters,” said Peter Wijnbergen, Norbord’s President & CEO. “The quarter would have been even better but for the effects of the COVID-19 pandemic, which began to impact demand from a number of our customers towards the end of March. In spite of the immediate challenges presented by COVID-19, I am pleased with our company’s ability to respond appropriately and adapt quickly. Our employees have demonstrated resilience in the face of uncertainty and changing workplace conditions, as well as flexibility to continue meeting the needs of our customers. No one knows how this pandemic will ultimately unfold, but the team at Norbord has been working diligently to build contingency plans and has taken decisive actions to retain operating flexibility, preserve jobs for as many employees as practicable, and ensure we are prepared for a return to growth when market conditions improve. Most importantly, we are doing all this while keeping the health and safety of our employees front and centre as our top priority.”
Norbord recorded Adjusted earnings of $21 million or $0.26 per share (basic and diluted) versus an Adjusted loss of $11 million or $0.13 per share (basic and diluted) in the fourth quarter of 2019 and an Adjusted loss of $2 million or $0.02 per share (basic and diluted) in the first quarter of 2019. Adjusted earnings (loss) exclude non-recurring or other items and use a normalized income tax rate.
COVID-19 Response – Workplace Health and Safety
In February, the Company formed a COVID-19 Response Team to closely and continuously monitor developments and began introducing policies and recommending actions to stay ahead of the effects of the coronavirus.
At Norbord’s mills, considerable precautions were established to ensure the continued health and safety of employees, their families and the communities in which the Company operates. Specifically, procedures were implemented to ensure adequate personal protective equipment was available and utilized and cleaning techniques were enhanced across all mills. Rotating schedules were developed to limit cross-shift contact and employees were restricted to certain areas of the mills, with staggered start times and lunch breaks to limit close interactions. Where necessary for employees to interact with each other, procedures were established to ensure physical distancing. Cumulatively, these steps have enabled all Norbord mills to remain open.
Safety performance this quarter showed a notable 32 per cent improvement over the same quarter last year, reflecting the impact of the company-wide “Stronger Together” safety initiative launched in 2019 and the continued focus by all employees during a period in which many workplace changes had to be introduced.
Read the full report here.