Gypsum industry news

Canada: Gypsum revenues grew at Superior Plus in the fourth quarter of 2015. Revenue for its Construction Products Distribution division grew by 11% year-on-year to US$244m from US$220m in the previous period in 2014. It attributed the growth to improved US sales volumes as a result of on-going improvements in the US residential construction sector, an increase in average selling prices and currency effects. Canadian revenues fell slightly year-on-year for the quarter.

Overall Superior Plus reported an increase in its gross profit of 11% year-on-year to US$241m for the fourth quarter from US$248m in the previous year. However, its revenue fell by 15% to US$814m from US$957m. The company operates a diverse portfolio of businesses in construction products distribution, propane distribution, speciality chemical supplies and energy services.

New Zealand: Fletcher Building has reported that its net profit rose by 51% year-on-year to US$114m in the half year that ended on 31 December 2015 from US$75.6m in the same period in 2014. Its sales rose by 2.5% to US$2.94bn from US$2.87bn. It attributed this to growth in its building products and distribution businesses making up for weaker earnings from Formica and New Zealand housing developments.

Fletcher Building reported that gypsum wallboard volumes via its Building Products division rose by 9% in the half year. Volumes of performance board rose by 12%. Sales volumes of insulation rose by 12% in New Zealand and 9% in Australia. It noted that its market share has also improved in both insulation markets due to competitive pricing following the strengthening of the US Dollar.

Australia: Boral's profit after tax has grown by 23% year-on-year to US$97.2m in the first half of its 2016 financial year. It reported a profit of US$80m for the same period in its 2015 period. It attributed the growth to a strong residential market and growth in New South Wales (NSW) with cost cutting, price rises and slightly higher property earnings for its construction materials and cement business. Overall revenue fell by 4% year-on-year to US$1.6bn.

"The success of the first half is underpinned by a very strong residential construction market in NSW, a solid performance in South-East Queensland, further recovery in the US and a successful growth strategy in the gypsum business in Australia and Asia," said Boral CEO and Managing Director Mike Kane.

Boral's gypsum business reported a 13% rise in revenue to US$505m. This was attributed to increased penetration of Sheetrock brand wallboard, resulting in higher overall pricing, and stronger non-board sales. Strong volume growth in Australia was offset by contraction in key Asian markets and a reversal of a short-term market share gain in South Korea.

US: USG Corporation has grown its gypsum business operating profit by 65% year-on-year to US$316m in 2015 from US$192m in 2014. The company attributed the results to price rises.

"We finished 2015 on a strong note by achieving impressive margin expansion in our Gypsum and Ceilings businesses. Improved pricing in both businesses, coupled with our cost discipline, drove this increased performance," said James S Metcalf, Chairman, President and CEO.

Net sales for its gypsum business rose by 5% year-on-year to US$2bn from US$1.9bn. Notably, sales dropped by 4% to US$187m in its Mexico and Latin America region although profits rose in the saUSHme period.

As a whole, the company reported sales of US$3.78bn in 2015, a slight rise from 2014. Operating profit more than doubled to US$381m from US$162m. Its USG Boral business reported that its net sales rose by 7.6% to US$1bn. Its operating profit rose by 30.5% to US$125m.

US: Eagle Materials has reported that its operating earnings from its Gypsum Wallboard and Paperboard business fell by 8% year-on-year to US$45.2m in the third quarter of 2015. The decline was attributed to lower gypsum wallboard and paperboard sales volumes.

Gypsum wallboard and paperboard revenues fell by 9% year-on-year to US$132m. Wallboard sales volumes fell by 7% year-on-year to 53Mm2. Third quarter gypsum wallboard sales volumes did not benefit from pre-buying activity in advance of a price increase, as had been the case in the prior year's third quarter, due to a shift in the timing of our announced wallboard price increase for 2016 from 1 January 2016 to 31 March 2016. Paperboard sales volumes fell by 8% year-on-year to 71,000t, 8% lower than the same quarter a year ago.

Saudi Arabia: National Gypsum has reported that net profit for the fourth quarter of 2015 fell by 66% to US$282,000 from US$828,000in the same period in 2014. Operational profit fell to US$773,000 from US$1.27m.

Net profit for the year in 2015 remained static at US$5.78m compared to US$5.79m in 2014. Operational profit fell by 36% year-on-year to US$3.47m from US$5.41m.

India: With glass reinforced gypsum panels manufactured by FACT-RCF Building Products Limited (FRBL) growing popular, the joint venture company's turnover is expected to surpass US$2.95m during its current financial year.

The growth is significant given that the company's turnover was less than US$73,950 two years ago. During the previous financial year, turnover touched US$369,754, according to C P Dinesh, Managing Director of FRBL.

The sale of gypsum panels during the first nine months of its current fiscal year brought in US$665,233. About 100,000ft²/yr of panels is expected to be sold during the year. Dinesh said that gypsum panels had become acceptable in the country as an alternative to conventional building materials due to their environment friendliness and cost-efficiency.

Vietnam: Gypsum and Cement JSC (TXM) has posted a US$27,501 net loss in the third quarter of 2015, compared to a US$82,861 net profit in the same period of 2014. The company generated US$6.72m net revenue in the period, down by 16% year-on-year. TXM attributed its loss to the depreciation of the Vietnamese Dong compared to the US Dollar, increases in management costs and a fall in financial income. In the first nine months of 2015, TXM made a US$134,370 net profit on a US$19.5m net revenue, down by 42% and 10% year-on-year, respectively.

US: Eagle Materials has reported its financial results for the second quarter of its 2016 fiscal year, which ended on 30 September 2015. Its revenue grew by 16% year-on-year to US$329m and its net earnings fell by 41% to US$29.8m, reduced by US$26.2m post-tax due to non-routine items related to the oil and gas proppants segment. Eagle Materials' adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 14% to US$110m.

Eagle's construction products and building materials businesses continued to perform well during the second quarter of 2016, with the Cement and Paperboard businesses reporting record quarterly operating earnings and the wallboard, concrete and aggregates businesses reporting year-on-year improvements. Demand for building materials and construction products remains strong in each of its regional markets. Cash flow from operations improved by 12% and was used to fund the Skyway acquisition, make capital improvements, pay dividends, reduce debt and repurchase shares.

The decline in oil prices during the summer adversely impacted US oil and gas drilling activity, leading to further reductions in demand and pricing for proppants. As a result, it recorded impairments to several intangible assets originally booked in connection with its acquisition of CRS Proppants and revalued downward certain raw sand inventory values. The impairments and inventory revaluation charges totalled approximately US$37.8m pre-tax.

Gypsum Wallboard and Paperboard reported second quarter 2016 operating earnings of US$48.1m, up by 7% year-on-year. Improved Gypsum Wallboard and Paperboard sales volumes were the primary drivers of the quarterly earnings increase. Gypsum Wallboard and Paperboard revenues for the second quarter grew by 8% to US$143m. The revenue increase reflects higher Gypsum Wallboard and Paperboard sales volumes slightly offset by a 1% decline in the average Gypsum Wallboard net sales price. Gypsum Wallboard sales volume for the quarter grew by 9% to 619Mft².

US: USG Corporation has reported that, on a consolidated basis in the third quarter of 2015, its net sales were US$972m, consistent with the third quarter of 2014.

On an adjusted basis, USG's net sales increased by US$20m or 2%. Operating profit improved by US$80m to US$102m. USG's adjusted operating profit was US$115m in the third quarter of 2015, an US$8m increase from the third quarter of 2014. USG generated US$76m in net income in the third quarter of 2015, compared to a net loss of US$12m in the third quarter of 2014. On an adjusted basis, net income of US$76m increased by US$14m from the third quarter of 2014. Foreign currency unfavourably impacted consolidated net income by US$8m in the third quarter of 2015. Adjusted results exclude results from Gypsum Transportation Limited (GTL) a shipping operation which USG has exited, litigation settlement charges and impairment charges were all recorded in the third quarter of 2014.

USG's gypsum segment generated US$89m of operating profit in the third quarter of 2015. On an adjusted basis, operating profit of US$89m improved by US$4m over the third quarter of 2014, led by the US gypsum business. Wallboard provided US$7m of improved operating profit, while the surfaces and substrates businesses contributed US$6m in incremental profit. These improvements were offset by US$5m of increased selling, general and administrative spending due to the timing of projects and costs incurred, as well as a US$4m unfavourable foreign currency impact.

The USG Boral business generated US$12m of equity income in the third quarter of 2015, consistent with the amount earned in the third quarter of 2014. On a currency-neutral basis, the USG Boral business earned US$15m of equity income, a US$3m improvement over the 2014 quarter.

"We saw margin expansion in our gypsum, distribution and USG Boral businesses, notwithstanding softer than expected demand," said James S Metcalf, Chairman, President, and CEO. "In the third quarter we saw improvements in wallboard, strong contributions from our surfaces and substrates businesses, organic margin growth in distribution and continued expansion in USG Boral. With our focus on controlling costs, we are well positioned to take advantage of an improving demand environment going forward."