Gypsum industry news

US: Eagle Materials’ sales revenue from gypsum wallboard rose in the first half of its financial year to 30 September 2018 due to higher prices. Its revenue from wallboard grew by 9% year-on-year to US$272m from US$250m. Its wallboard sales volumes increased by 3% to 124Mm² from 121Mm². The building materials producer said that Hurricane Florence had disrupted its southeastern markets reducing salese in the second quarter. Overall, the company’s sales across all businesses rose.

US: USG’s operating profit fell by 30% year-on-year to US$190m in the first nine months of 2018 from US$270m in the same period in 2017. The building materials company blamed this on rising costs in the third quarter, arising from transport costs and non-production costs linked to its Customer-First strategy. Despite this, net sales rose by 6% to US$2.52bn from US$2.37bn.

The company is currently being acquired by Germany’s Knauf. The takeover is expected to complete in early 2019. In its third quarter financial report USG said that Boral had started proceedings in late August 2018 to determine the value of the USG Boral joint venture. This process could lead to Boral exercising its right to purchase USG’s 50% interest in USG Boral.

China: Beijing New Building Materials’ (BNBM) operating revenue rose by 17% year-on-year to US$1.37bn in the first nine months of 2018. Its net profit grew by 31% to US$293m. However, both revenue and profit fell in the third quarter of 2018.

France: Saint-Gobain’s Interior Solutions division’s net sales grew by 4.2% year-on-year to Euro5.33bn in the first nine months of 2018 from Euro5.11bn in the same period in 2017. The group said that division performance in the third quarter of 2018 was driven by pricing. Western Europe progressed slightly despite lower volumes in the UK. In North America, the acceleration in price increases in the quarter reduced sales volumes. Asia and emerging countries reported good growth. Overall, the group’s sales rose by 1.8% to Euro31.1bn from Euro30.6bn.

“Saint-Gobain continues along its growth trajectory despite a tough comparison basis in the third quarter of 2017. Our focus on increasing prices – critical in an inflationary environment – continues to pay off. The industrial issues that had weighed on our profitability in the first half of the year are largely behind us,” said Pierre-André de Chalendar, chairman and chief executive officer (CEO) of Saint-Gobain.

Australia: USG Boral’s earnings have been hit by competition in Indonesia, Thailand and Vietnam, higher input costs including paper and a one-off cost. Earnings before interest, taxation, depreciation and amortisation (EBTIDA) were negatively affected by a one-off cost of US$8m associated with a three-month closure of the port of Thevenard in South Australia and an unfavourable operational reserve adjustment in India. Its EBITDA fell by 6% year-on-year to US$196m in the financial year to 30 June 2018 from US$207m in the same period in 2017.

However, despite this its sales revenue rose by 7% to US$1.15bn from US$1.08bn. This was attributed to continued adoption of its Sheetrock products and technical board in Australia, Korea, China and Thailand. Overall board volumes increased by 3% year-on-year and technical board, which represents 20% of volumes, grew by 20%. Gypsum wallboard volumes grew in Australia and China, and ‘strong’ price gains were achieved in South Korea and China.

“This long-term growth business has delivered impressive and uninterrupted year on year growth since the formation of the joint-venture in 2014, with FY2018 being a consolidation year. Australia, Korea and China delivered strong top line growth in FY2018, offsetting pressures in countries such as Indonesia, Thailand and Vietnam and some unexpected one-off cost impacts,” said chief executive officer and managing director Mike Kane. He added that the company is currently considering an expanded joint-venture with Germany’s Knauf in relation to its proposed acquisition of USG. However, Boral is also considering a return to 100% Boral ownership.

China: China National Building Material’s (CNBM) gypsum wallboard sales rose by 1.5% year-on-year to 866Mm² in the first half of 2018 from 853Mm² in the same period in 2017. Its wallboard production remained stable at 874Mm². Average wallboard prices at both of its New Materials division subsidiaries also increased.

The group’s sales revenue from its New Materials division rose by 10.3% to US$1.66bn from US$1.5bn. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 30% to US$452m from US$346m. Overall, group sales revenue rose by 22% to US$14bn from US$11.5bn.

The company said that its BNBM subsidiary set up a company, Tanzanian Company Limited, in Tanzania and that BNBM refocused Wanjia Building Materials for the global market

CNBM’s subsidiaries that produce gypsum wallboard include BNBM and Taishan Gypsum.

US: Continental Building Products’ net sales in the second quarter of 2018 have risen due to higher gypsum wallboard sales volumes driven by ‘strong’ demand. The company reported an 11.6% increase year-on-year on wallboard volumes to 67Mm² from 60Mm². Its net sales rose by 6% to US$256m in the first half of 2018 from US$241m in the same period of 2017. Its net income rose by 44% to US$35.5m from US$24.6m.

France: Saint-Gobain’s sales rose by 1.9% year-on-year to Euro20.8bn in the first half of 2019 from Euro20.4bn in the same period in 2017. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell very slightly to Euro2.07bn.

"The second quarter marks a return to supportive trends in all our main markets. After a disappointing first quarter, affected by harsh winter weather in Europe, which weighed on results, the second quarter was far more encouraging in terms of volumes and prices. The group succeeded in further raising sales prices amid continued raw material and energy cost inflation. Despite a combination of temporary one-off factors, our first-half results progressed once again,” said Pierre-André de Chalendar, chairman and chief executive officer (CEO) of Saint-Gobain.

The group’s Interior Solutions division, including gypsum wallboard and insulation production, reported 7.1% organic growth, with rising sales prices in the period although raw material and energy costs inflated. The group noted that although its operating margin was held back by weather conditions in Europe in the first quarter and by the on-going shift from synthetic to natural gypsum, it benefited over the half-year period from a positive price-cost spread in terms of raw materials and energy.

US: USG has blamed falling operating profits on costs relating to its ‘Customer-First’ strategy and rising general costs, including those from transportation. Its operating profit fell by 32% year-on-year to US$121m in the first half of 2018 from US$179m in the same period in 2017. Its net sales rose by 6% to US$1.67bn from US$1.58bn.

For its wallboard and surfaces business the company said that its wallboard price increased by 2% from the second quarter of 2017 due mostly to a price increase in January 2018. Wallboard sales volumes increased by 2% compared to the second quarter of 2017. However, wallboard costs were US$12m higher than the previous year primarily due to rising input and transportation costs.

The building materials producer confirmed that its merger with Germany’s Knauf is expected to complete in early 2019, subject to shareholder and regulatory approval.

France: Saint-Gobain’s Interior Solutions division has grown its sales in Asia and emerging countries in the first quarter of 2018. Its sales rose by 2.4% year-on-year to Euro1.75bn in the first quarter of 2018 from Euro1.71bn in the same period of 2017. The group reported that trading in Western Europe was partly affected by weather conditions, although the underlying growth trends were good, except in the UK. North America posted growth, led by prices. Overall, the group’s sales fell slightly to Euro9.76bn due to poor weather and reduced working days.