Ainsworth Lumber (TSX:ANS) has turned the corner.
In an interview Monday, president and CEO Rick Huff said 2010 was substantially better than 2009 for the oriented strand board (OSB) manufacturer. OSB is primarily used in residential construction.
The Vancouver company entered the year as a pure OSB player, Huff said, after previously offloading its plywood and veneer plants.
That helped the manufacturer take advantage of a spike in prices that saw the average market price for 7/16” OSB jump to US$213 per thousand square feet in 2010, a 45% increase on the year before.
As a result, Ainsworth posted $329.5 million in sales for the year ended December 31, compared with $285.9 million in 2009.
The company’s net income also climbed back into positive territory in 2010, finishing the year at $9.4 million compared with a $21.6 million loss the year before.
As of December 31, Ainsworth had working capital of $134.6 million.
Huff said the Japanese market was the company’s white knight in 2010, while the U.S. housing market continued to languish.
He added that Ainsworth would focus on improving ties with its Asian customers in 2011, and that a trip to China was in the works.
Still, Huff doesn’t hold out much hope for the rejuvenation of the U.S. housing market this year.
“As a company, we’ve certainly turned the corner,” he said. “Has the housing market turned the corner? I’m not entirely sure it has. I still think there’s lots of weakness in U.S. housing markets, lots of foreclosures and those things that have to work their way through the market. I think we’ve reached the low point and come off the low point in U.S. housing starts, but I think it’s very slow improvement.”
At press time, Ainsworth shares were unchanged at $3.21.