Gypsum industry news

US: Eagle Materials recorded consolidated net sales of US$1.62bn in its 2021 financial year, up by 16% year-on-year from US$1.40bn. Its net earnings quadrupled to US$339m from US$70.9m. Its gypsum wallboard sales volumes increased by 6% to 265Mm² from 265Mm². The building materials producer increased its wallboard prices during the second half of the year due to improved demand outlook for single-family construction activity in the US and increasing demand for our products.

President and chief executive officer Michael Haack said, “Across all measures, fiscal 2021 was extraordinary for Eagle as we met and overcame challenges that were inconceivable just a year earlier. The resilience of our business model, our financial discipline and our team’s operational and strategic execution allowed us to deliver record financial results, integrate the largest acquisition in the company’s history and further streamline our business portfolio by divesting several non-core businesses, all while achieving industry leading safety performance. Our strong operating cash flow enabled us to reduce leverage to under 1.5 times net debt-to-earnings before interest taxation depreciation and amortisation (EBITDA), providing us with significant liquidity and increased financial flexibility.” He continued “As we begin our new fiscal year, Eagle is well-positioned, both geographically and financially, with ample raw material reserves to capitalise on the underlying demand fundamentals that are expected to support steady and sustainable construction activity growth over the near and long-term. We remain confident in Eagle’s prospects for continued growth and sustainable value creation for all shareholders.”

US: Eagle Materials’ nine-month gypsum wallboard sales rose by 5% year-on-year to US$120m in the period ending on 31 December 2020 from US$114m. Volumes increased by 7% to 200Mm² from 187Mm². Group sales rose by 16% to US$1.28bn from US$1.10bn. Net earnings were US$273m, compared to a loss of US$1.54m in the first nine months of its 2020 financial year.

President and chief executive officer Michael Haack praised the performance in the quarter which ended on 31 December 2020, saying, “Despite continued pandemic-related economic uncertainty, our wallboard shipments were up by 9%, a third quarter record for American Gypsum. We continued to generate strong operating cash flow, which significantly improved our balance sheet and liquidity position providing us with increased financial flexibility.” He added, “As we continue to navigate the Covid-19 environment, I want to thank our team for their exceptional work under extraordinary circumstances, delivering strong results and keeping our strategic projects on schedule. We continue to closely monitor the disruptions caused by the Covid-19 pandemic and their possible impact on our business in current and future periods. We also continue to enforce strict health and safety protocols to protect our employees, customers and business partners, and we will continue to manage our cash flow prudently and protect our balance sheet.”

US: Eagle Materials recorded sales of US$875m in the six months between 1 April 2020 and 30 September 2020, the first half of its 2020 financial year, up by 16% year-on-year from US$756m in the first half of the 2019 financial year. Gypsum wallboard sales were 132Mm², up by 6% from 125Mm², while net earnings rose by 70% to US$192m from US$113m.

President and chief executive officer (CEO) Michael Haack said, “We are pleased to have delivered another quarter of record revenue and net earnings growth while further strengthening our balance sheet. Our end markets remain resilient as Covid-19-related uncertainty persists.” He added that, “the housing market continued its strong rebound” and that wallboard shipments rose by 6% in the second quarter. Good operating cash flow and a tax refund helped the company increase its earnings ‘significantly’ in the reporting period.

US: Eagle Materials’ sales from its Light Materials division rose slightly to US$153m in the first quarter of its financial year to 30 June 2020. Gypsum wallboard sales revenue growth offset declines in paperboard sales. However, earnings fell by 8% to US$44m. Gypsum wallboard sales grew by 7% to 65Mm2. Overall, the group’s revenue and earnings rose.

“While we are very pleased with our first-quarter performance, we recognise a high level of uncertainty persists in our markets and the overall economy: despite the decline in jobless claims from the March peak, total unemployment remains historically high; state and local governments face ongoing revenue pressure, which could have the potential to constrain infrastructure budgets; and, in some geographic areas important to our business, Covid-19 case numbers continue to escalate,” said Michael Haack, president and chief executive officer (CEO).
The group announced plans in May 2019 to split its Heavy Materials and Light Materials divisions into two independent businesses. However, it says the timing remains ‘uncertain.’

US: Eagle Materials Inc. has announced that Mary Ricciardello has been appointed to the company’s Board of Directors. Ricciardello also serves as a director on the boards of Devon Energy and Noble Corporation, serving as the Audit Committee Chairperson on both boards. Her previous board service includes seven years on the board of US Concrete. Ricciardello enjoyed a distinguished career at Reliant Energy, where she served in key roles, including that of Chief Accounting Officer.

Mike Nicolais, Eagle’s Board chair, commented, “We are extremely pleased to have Mary join our Board. Mary is a proven leader and will be a great complement to the strong leaders on our board today. The addition of Mary to the board is also timely in that it provides additional flexibility in light of prospective Board needs as we plan for the separation of Eagle Materials into two publicly traded companies.”

US: Eagle Materials will call its Light Materials business the American Gypsum Company when it is spun-off in the summer of 2020. It has appointed Dave Powers, former Eagle Materials chief executive officer (CEO), will become the chairman of American Gypsum. Craig Kesler, current chief financial officer (CFO) of Eagle Materials, will become the president and CEO of American Gypsum.

The Light Materials business will continue as a producer of gypsum wallboard and recycled paperboard. It includes an integrated paperboard mill that supplies wallboard plants with facing paper as well as raw material reserves.

US: The Bureau of Land Management (BLM) will be receiving public comment until 6 Feb 2020 on Eagle Materials' proposed 100 acre expansion of its 830 acre mine near Gypsum in Eagle County, Colorado. The mine supplies gypsum to its 67Mm2-capacity Eagle Materials gypsum wallboard plant in gypsum. BLM Colorado River Valley field manager Larry Sandoval said, “Responsible mineral development is part of BLM’s multiple-use mission,” according to RealVail newspaper.

US: Eagle Materials has reported financial results for the second quarter of its 2020 fiscal year, a period that ended on 30 September 2019. Its overall revenue was US$414.5m for the period, a 9% year-on-year improvement.

Gypsum wallboard and paperboard revenue declined slightly from the prior year, as improved sales volume was offset by lower pricing. Gypsum Wallboard sales volume reached 63.3Mm3 (681Mft2), a rise of around 8% year-on-year, while the average Gypsum Wallboard net sales price declined by 10% to US$13.78Mm2 (US$148.16/Mft2).
Paperboard sales volume for the quarter also increased, up by 9% to a record 86,000t. The average paperboard net sales price was US$475.98/t, down by 6% from the prior year, consistent with the pricing provisions in our long-term sales agreements.
Operating earnings were US$48.6m in the sector, a decline of 11%, reflecting improved wallboard and paperboard sales volume offset by lower net sales prices. Operating costs during the quarter declined primarily due to lower recycled fibre costs.

US: Eagle Materials’ revenue from its gypsum wallboard business fell by 11% year-on-year to US$127m in the first quarter of its financial year to 30 June 2019 from US$142m in the same period in 2018. Its earnings dropped by 25% to US$37.9m from US$50.5m. Wallboard sales volumes decreased by 7% to 61Mm² from 66Mm². It attributed the loss of revenue on lower volumes and poor pricing although it said that buying activity around a price increase in July 2019 suggested that the market was ‘healthy.’

US: Eagle Materials has approved a plan to spin off its heavy materials and light materials businesses into two publicly traded entities, bowing to pressure from hedge fund Sachem Head Capital Management.

Sachem, which disclosed a 9% stake in Eagle Materials in March 2019, had earlier urged Eagle to separate its cement and wallboard businesses. After the split, Eagle’s heavy materials business will operate as a cement company, and the light materials business will continue to make gypsum wallboard and recycled paperboard.

“We believe that by pursuing the actions announced today the Eagle board is taking significant steps to unlock the company’s inherent value,” said Sachem Managing Partner Scott Ferguson, also commenting on planned changes to Eagle’s oil and gas proppants businesses.

The separation will be by a tax-free spin-off to Eagle shareholders and is expected to be completed in the first half of 2020. Both the new companies will have their headquarters in Dallas, Texas.