April 28, 2011 / 10:47 AM / 7 years ago

UPDATE 2-Norbord Q1 loss wider-than-expected on slow housing recovery

* Expects U.S. housing activity to pick up in H2

* Sees European panels business remaining strong

* Q1 loss/shr $0.05 vs est loss/shr $0.02

* Q1 revenue up 28 pct at $253 mln (Adds details on 2011 capital budget, U.S. housing activity, company’s European operations)

April 28 (Reuters) - Canadian wood panels-maker Norbord Inc posted a wider-than-expected quarterly loss due to a slow recovery in U.S. housing activity, which it expects will pick up in the second half of the year.

Toronto-based Norbord, which makes oriented strand board (OSB) for residential and commercial construction, said its 2011 capital budget would be higher than last year’s $25 million.

OSBs are similar to plywood, but are cheaper and commonly used to sheath roofs, walls and floors.

The weak results come a day after Canadian peer Tembec Inc posted results below market estimates and said its forest-products business would remain weak until U.S. housing activity strengthens. [ID:nL3E7FR3AK]

Norbord said actual first-quarter U.S. housing starts were 10 percent lower than last year, and North Central benchmark OSB prices fell $14 to average $198 in the first quarter.

U.S. housing starts and permits for future home construction rose 7.2 percent in March, snapping back from the prior month’s winter depressed levels. [ID:nCAT005413]

Revenue at Norbord, which also manufactures plywood and a range of other engineered wood products, rose 28 percent helped by a strong demand for wood panels in Europe.

The company expects its European operations, which almost tripled its EBITDA to $11 million in the quarter, to continue to flourish.

“Our UK-based business is benefit ting from a currency advantage that is positively impacting both domestic markets and export opportunities,” Norbord said.

January-March loss narrowed to $2 million, or 5 cents a share, from $7 million, or 16 cents a share, a year ago.

Analysts on an average were expecting a loss of 2 cents a share on revenue of $232 million, according to Thomson Reuters I/B/E/S.

Shares of the Toronto-based company closed at C$13.23 on Wednesday on the Toronto Stock Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Roshni Menon)

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