PR Newswire
TORONTO, Feb. 3, 2017
Note: Financial references in US dollars unless otherwise indicated.
2016 HIGHLIGHTS
TORONTO, Feb. 3, 2017 /PRNewswire/ - Norbord Inc. (TSX and NYSE: OSB) today reported Adjusted EBITDA of $114 million for the fourth quarter of 2016 versus $114 million in the prior quarter and $57 million in the fourth quarter of 2015. For the full year 2016, Norbord recorded Adjusted EBITDA of $383 million compared to $122 million in 2015 on higher North American OSB prices and higher shipment volumes. North American operations generated Adjusted EBITDA of $352 million compared to $95 million in the prior year and European operations delivered Adjusted EBITDA of $41 million versus $38 million in the prior year.
"2016 was an excellent year for Norbord and we more than tripled our Adjusted EBITDA over the prior year," said Peter Wijnbergen, Norbord's President and CEO. "US housing starts continued their steady recovery, driving increased North American OSB demand and prices. The fourth quarter of 2016 marked our eighth consecutive quarter of improved results as the seasonal slowdown in construction-related demand was less pronounced than usual. Channel inventories remain lean and demand in all our core markets remains strong, setting us up well as we enter 2017."
"Norbord's mills in both North America and Europe continued to deliver strong operational results in 2016, with seven mills setting annual production records. We captured the full $45 million in targeted merger synergies, reflecting the extraordinary effort across our company to quickly integrate Norbord and Ainsworth and realize on the opportunities to reduce costs, optimize sales and logistics, and share best practices."
"In Europe, our panel business delivered its 27th consecutive quarter of stable Adjusted EBITDA in US dollar terms, despite the post-Brexit translation headwind of a weaker Pound Sterling. OSB is accelerating market share gains versus plywood, driving double-digit demand growth in our key UK and German markets. Our project to modernize and expand the Inverness, Scotland OSB mill to serve this rapidly growing customer demand is on-schedule and within budget for start-up in the second half of this year."
Norbord recorded Adjusted earnings of $55 million or $0.64 per share (basic and diluted) in the fourth quarter of 2016 versus $58 million or $0.68 per basic share ($0.67 per diluted share) in the third quarter of 2016 and $16 million or $0.19 per share (basic and diluted) in the fourth quarter of 2015. For the full year 2016, the Company recorded Adjusted earnings of $175 million or $2.04 per basic ($2.03 per diluted share) compared to an Adjusted loss of $14 million or $0.17 per share (basic and diluted) in 2015 that included a number of one-time merger-related expenses. Adjusted earnings/losses exclude non-recurring items and use a normalized income tax rate:
$ millions | Q4-2016 | Q3-2016 | Q4-2015 | 2016 | 2015 | |
Earnings (loss) | 61 | 55 | 13 | 183 | (56) | |
Adjusted for: | | | | | | |
| Gain on asset exchange | (16) | - | - | (16) | - |
| Merger transaction costs | - | - | - | - | 8 |
| Costs to achieve merger synergies | 1 | 4 | 3 | 8 | 7 |
| Costs related to High Level fire | - | - | - | 1 | - |
| Cost on early debt extinguishment | - | - | - | - | 25 |
| Revaluation loss on Ainsworth notes | - | - | - | - | 24 |
| Reported income tax expense (recovery) | 29 | 19 | 6 | 61 | (27) |
Adjusted pre-tax earnings (loss) | 75 | 78 | 22 | 237 | (19) | |
| Income tax (expense) recovery at statutory rate | (20) | (20) | (6) | (62) | 5 |
Adjusted earnings (loss) | 55 | 58 | 16 | 175 | (14) |
Market Conditions
In North America, US housing starts were approximately 1.17 million in 2016, up 5% from 1.11 million in 2015, and the December seasonally-adjusted annualized pace of permits, the more forward-looking indicator, was 1.21 million. Single family starts, which use approximately three times more OSB than multifamily, increased by 9% in 2016. US housing economists are forecasting 2017 starts of approximately 1.25 million, a further 7% year-over-year improvement.
According to APA–The Engineered Wood Association, North American OSB production, which represents demand on the industry's mills, increased by 7% in 2016 to approximately 21.8 Bsf (3⁄8-inch basis), or 88% of the industry's operating capacity. This compares to an estimated operating rate of 83% in 2015.
North American benchmark OSB prices improved significantly as the year progressed as new home construction activity and OSB demand continued to increase. The North Central price ranged from a low of $213 per Msf (7/16-inch basis) in February to a high of $310 in the summer, averaging $269 for 2016, up 29% from $209 in 2015. The table below summarizes benchmark OSB prices ($ per Msf, 7/16-inch basis) by region for the relevant periods:
North American | % of Norbord's | Q4-2016 | Q3-2016 | Q4-2015 | 2016 | 2015 |
North Central | 16% | 285 | 301 | 242 | 269 | 209 Werbung Mehr Nachrichten zur Norbord Aktie kostenlos abonnieren
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