Norbord loses $30M in Q4, forecasts dark 2009

Norbord Inc. said Friday that it lost money for the ninth straight quarter in the final three months of 2008 as the particleboard maker continued to suffer from the global construction slump.

Toronto-based Norbord, one of the world's largest producers of oriented strand board, a plywood substitute, lost $30 million, or 19 cents a share, in the October-to-December quarter, compared with a loss of $13 million, or nine cents a share, for the same period one year earlier.

Norbord said the decline in the U.S. housing market was an early indicator of the current global financial crisis since the industry is at the epicentre of North America's recession.

"The past year has been the most difficult in Norbord's history," said Barrie Shineton, Norbord's president and chief executive officer.

"The issues have been well-documented — poor demand for our core products, high input costs, and a breakdown in the financial markets resulted in a lack of available credit for both individuals and corporations," he said.

Three-month stock chart for Norbord Inc.

Norbord's fourth-quarter loss boosted the company's red ink for the year to $116 million, or 77 cents a share. The annual loss was more than twice the $45 million in negative earnings Norbord posted in 2007.

Norbord last broke into the profit column in the third quarter of 2006 when it made $7 million.

To deal with any potential funding shortfall, Norbord said that in the quarter it issued 110 million common shares plus 55 million in warrants which raised $240 million. The rights sale also made Brookfield Asset Management Inc. a 75 per cent shareholder in Norbord.

Housing slump

Norbord said the U.S. housing market has basically vaporized with only 900,000 housing starts in 2008, down 50 per cent from 2006's level.

The company, which relies heavily upon the global house market for its business, said 2009 will not see much — if any improvement — in this sector.

"We don't expect any recovery in the housing markets in North America or Europe during 2009," Norbord said in a news release announcing its fourth-quarter results.

In anticipation of a tough year, Norbord has already cut jobs and chopped its capital spending program by $76 million to a mere $25 million for 2009.

Finance Minister Jim Flaherty is eyeing companies, such as Norbord, and industries, such as the housing sector, as beneficiaries from his Jan. 27 budget.

In that document, Ottawa extended tax relief to those consumers who renovate their homes, a policy the Conservative government hopes will boost Canada's construction sector.