TORONTO — Norbord Inc. beat expectations as it swung to an US$18-million profit in the second quarter despite a six-per-cent drop in revenues.
The Toronto-based forest products company, which reports in U.S. dollars, says it earned 22 cents per share, down from a loss of 17 cents per share of $14 million a year earlier.
Excluding one-time items including a $16-million asset impairment related to idle production assets at the Grande Prairie, Alta., mill, Norbord earned $31 million or 38 cents per share, compared with a loss of $8 million or 10 cents per share in the prior year’s quarter.
It attributed the gains to higher realized North American oriented strand board prices and lower manufacturing costs, partially offset by lower shipment volumes.
Revenues for the three months ended June 30 were $421 million, down from $447 million in the second quarter of 2019.
Norbord was expected to post eight cents per share in adjusted profits on nearly $398 million of revenues, according to financial data firm Refinitiv.
“The second quarter of 2020 started slowly as it overlapped with the significant pullback in economic activity that occurred during the early stages of the COVID-19 pandemic. However, we ultimately saw improving demand through the quarter that led to better than expected results,” said CEO Peter Wijnbergen.
He said customer demand has continued to increase in the third quarter beyond expectations despite ongoing concern about the impact of COVID-19 on the broader economy.
A limited restart in August of Line 1 at its two-line OSB mill in Cordele, Ga., will provide additional volume to customers in the near term.
“Though these recent developments give us reason for optimism, it is unclear whether the worst of the pandemic is behind us, therefore we will maintain our approach of planning for the worst but being prepared for better.”
This report by The Canadian Press was first published Aug. 5, 2020.
Companies in this story: (TSX:OSB)
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