Due to lower short-term demand for oriented strand board (OSB), Louisiana-Pacific Corporation (LP) to reduce production by at least 100 million square feet in April. This reduction of almost a third of total OSB capacity is done through a combination of curtailments and reduced schedules.
In siding segment, the company has sufficient finished goods inventory on hand (built for 2Q 2020). For April, it intends to reduce production by roughly 50 million square feet with minimal disruption to customers.
Apart from production curtailments, LP reduced 2020 capital expenditure plans by 50% to roughly $70 million for 2020, coming to an average of $15 million per quarter (from 2Q to 4Q). Also, it is closely examining all discretionary spending to deal with the future expenses.
As of Mar 27, LP had a global cash balance of more than $480 million, a net-debt to book-capital ratio of 18% and no debt maturities before 2024. Moreover, the company believes that it is well-positioned to manage through a variety of down-side scenarios, including substantially lower revenue throughout 2020 and beyond.
Louisiana-Pacific Corporation is an American building materials manufacturer.
