CANADA – Norbord Inc., one of the worlds largest OSB panel manufacturers, reported Adjusted EBITDA of USD 42 million in the first quarter of 2019 compared to USD 70 million in the fourth quarter of 2018 and to USD 170 million in the first quarter of 2018.

The decrease versus both comparative periods was primarily due to lower North American oriented strand board (OSB) prices.

North American operations generated Adjusted EBITDA of USD 23 million compared to USD 50 million in the prior quarter and USD 156 million in the same quarter last year. European operations delivered Adjusted EBITDA of USD 21 million compared to USD 24 million in the prior quarter and USD 18 million in the same quarter last year.

“The pace of US housing construction began to decelerate in the second half of last year and this trend carried over into the first quarter,” said Peter Wijnbergen, Norbord’s President and CEO. “Further, the seasonally slowest time of year was exacerbated by unusually wet weather in many of our North American operating regions. Combined, these factors led to very disappointing market conditions and prompted us to take extensive downtime across our North American mills. This negatively impacted our production volumes and manufacturing costs.”

“US housing demand has clearly pulled back in the last nine months and the market has yet to recover in terms of volume. We remain of the view that this is a pause rather than a directional shift. US housing fundamentals remain supportive and we have already seen some of the negative trends that caused the housing pullback reverse. Mortgage rates have improved, home builders are starting to offer more entry level homes to help first-time buyers, and home builder sentiment is improving. Although the pick-up in demand that typically coincides with the spring building season has been late in coming, housing demand is setting up for a stronger second half.”

In Europe Norbord reported another good quarter for their panel business, delivering 17% more Adjusted EBITDA year over year due to continued strong OSB demand in key markets and the ramp-up of their modernized and expanded Inverness, Scotland mill. The second-phase of investment at Inverness is now underway and will help Norbord serve growing customer demand for several years to come.