Losses narrow at Norbord

Norbord, the Ontario, Canada-based manufacturer of oriented strand board (OSB), reported sales of $196 million for its fourth fiscal quarter, up from $191 million a year ago. (All figures are in U.S. dollars.) The company noted that both its North American and European operations generated improved results in the fourth quarter, which ended on Dec. 31.

But a depressed building materials market and a decline in manufacturing affected profits, resulting in a fourth-quarter loss of $11 million. This compares with a loss of $30 million in the corresponding period of 2008. Norbord attributed the improvement to curtailed production and reduced overhead costs.

For the full year, the company's losses narrowed to $58 million from a loss of $115 million the prior year. Net sales for the year declined to $718 million from $943 million in the preceding year.

In a prepared statement, Barrie Shineton, Norbord’s president and CEO, said: "As expected, markets for our building material products were weak again this year as the historic collapse in both U.S. and U.K. housing activity and the fallout from the global financial market breakdown continued through most of 2009."

Norbord said it closed two of its OSB mills for an indefinite period of time and reduced production at six other mills to conserve cash. Accordingly, the company has curtailed 40% of its OSB capacity in North America and 20% of panel capacity in Europe throughout the year. The company noted that the full benefit of its decision to indefinitely curtail two OSB mills will have a positive impact on 2010 results.

Looking ahead, Norbord anticipates a more positive building materials market outlook, particularly in Europe, the financial release said.

Norbord produces OSB, particleboard, medium density fiberboard (MDF) and panelized products.