US engineered wood and panels giant Louisiana-Pacific (LP) says the building materials market is continuing to strengthen despite recording a US$23m loss in the first quarter (2009: US$31m).
The company’s core OSB manufacturing division saw its operating losses narrow to US$5m (2009: US$24m), while sales rose 62% to US$117m. Volumes rose 34% and prices increased by 26%.
But a growth in Canadian dollar-denominated manufacturing costs offset the improvement.
LP’s siding division’s operating profits rose to US$9m from US$2m a year ago, with sales up 20% to US$75m, primarily due to an improved housing market.
The engineered wood business (LVL, I-joists and LSL) reported reduced operating losses of US$7m (2009: US$9m loss), with sales up 63% to US$49m. Higher sales were driven by bigger volumes as customers purchased products to meet demand, as well as to restock inventories depleted in the prior year.
“The market for building materials is better than we expected and this strength is continuing into the second quarter,” said chief executive officer Rick Frost.
“It appears the housing market is recovering, but I also feel that the various government stimulus programmes, particularly the homebuyer tax credit, have given homebuilding an extra boost.
“I expect that we will still experience a bumpy recovery, as foreclosures are likely to rise and the unemployment outlook remains uncertain – both key factors in a housing recovery.”
