TORONTO – Norbord Inc. (TSX:NBD) has approved a new variable quarterly dividend targeted at 60 cents per share, its first quarterly payout in more than four years and its stock responded by rising more than four per cent.
The Toronto-based producer of wood-based panels said it expects to have strong free cash flow, helped by a recovering U.S. housing market.
“Norbord now has strong liquidity and is deleveraging quickly with our net debt to total capitalization moving towards the bottom of our target range,” chief executive Barrie Shineton said Tuesday.
“We expect to continue delivering significant free cash flow in the near term as the U.S. housing recovery supports increasing demand for OSB (oriented strand board),” Shineton said in a news release.
Under the new dividend policy, the dividend will be payable on June 21 to shareholders of record on June 1.
On the Toronto Stock Exchange, Norbord shares were up $1.35, or 4.21 per cent, at $33.45 in trading near midday on Tuesday.
Norbord’s dividend announcement came as the company reported a first-quarter net profit of $67 million and earnings per share diluted of $1.25 on total sales of $365 million.
That compared with to break-even in the first quarter of 2012. Sales in the first quarter of 2012 were $253 million.
“Our strong first quarter results reflect a broad-based US housing recovery that is accelerating,” Shineton said.