Gypsum industry news

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."

Australia: Boral has recorded an increase in full-year profit, buoyed by the return to profitability of its US business for the first time since 2007, a pick-up in local demand and cost-cutting initiatives.

Australia's largest building materials provider posted a net profit of US$183m in the year to 30 June 2015, a 48.3% increase on the previous year's US$123m. Underlying profit rose by 45% to US$178m. However, Boral's total revenue over the same period fell by 15.2% to US$3.15bn.

Boral chief executive Mike Kane said that the results reflected the benefits from the company's overhaul of its business which reduced the size of its workforce and resulted in the closure of some unprofitable operations. "We've improved Boral's cost base, strengthened the balance sheet and we are managing our portfolio of businesses more efficiently," he said.

In the current 2016 fiscal year, Boral said it will focus on maintaining underlying earnings from construction, materials and cement, while property earnings remain uncertain. Building products are seen remaining broadly steady, while USGBoral will deliver further underlying improvement.

Canada: Continental Building Products has reported that its net sales, operating income and wallboard sales all grew in the second quarter of 2015.

"We produced another quarter of strong cash flow as a result of our disciplined operations, efficient cost structure and sharp focus on execution as we continue to grow our business," said Jay Bachmann, Continental Building Products' CEO. "During the quarter, each of our regions experienced stronger construction activity, enabling us to deliver solid growth in our wallboard shipments. We actively managed our costs to achieve significant operating leverage on higher sales and repurchased approximately 2% of our outstanding shares for US$20m while also reducing our debt leverage. We believe that we continue to be well positioned to capitalise on improving construction activity in our markets to enhance our profitability and deploy our capital into additional value-enhancing opportunities."

Net sales for the second quarter of 2015 grew by 7.9% to US$111m. The growth was primarily driven by 8.1% higher wallboard volumes to 567Mft2. The average mill net price grew by 0.7% year-on-year. At constant currency, the average mill net price increased by 1.5%. For US shipments, the average mill net price increased 1.4% year-on-year. Gross profit grew by 41.1% to US$29.5m and gross margin grew to 26.6% from 20.3% in the same quarter of 2014, primarily as a result of operating leverage achieved through higher wallboard volume and favourable energy costs. Operating income was US$4.3m compared to US$12.8m in the same period of 2014. Adjusted net income grew to US$10.2m from US$4.7m in 2014. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 24.4% to US$33.3m.

In the second quarter of 2015, Continental Building Products repurchased 913,200 shares of common stock at an aggregate purchase price of US$20m from an affiliate of Lone Star in a private transaction in connection with the secondary public offering in May 2015. It also used cash flow from operations for the voluntary repayment of US$10m of debt. The next principal payment on its debt not required until August 2020.

US: Eagle Materials has reported that in the first quarter of its 2016 fiscal year, which ended on 30 June 2015, its revenues grew by 7% to US$285m, its earnings before interest and income taxes grew by 1% to US$60.4m, its earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 10% toUS$84.6m and its net earnings grew marginally to US$37.8m.

First quarter net sales prices improved across nearly all businesses, with the most notable increases in the cement and concrete businesses. Extraordinarily wet weather in many of itscement markets, including Texas, Oklahoma and Colorado, adversely impacted the timing of cement sales volumes during the first quarter. However, Eagle Materials reported that its underlying demand for its cement continues to remain strong. In addition, all of its cement facilities completed their planned annual outages during the first quarter and cement maintenance costs were approximately US$3m higher than the prior year's first quarter.

Gypsum wallboard and paperboard revenues for the first quarter totalled US$136m, which were slightly lower than the same quarter of 2015. The average gypsum wallboard net sales price grew by 1% year-on-year, while wallboard sales volumes grew by 1% to 577Mft². Gypsum wallboard and paperboard reported first quarter 2016 operating earnings grew by 4% to US$46.9m. The earnings improvement reflects improved wallboard net sales prices, sales volumes and lower energy and paper costs.

US: USG Corporation has reported results for the second quarter of 2015. On a consolidated basis, net sales grew by 2% year-on-year to US$970m. Operating profit improved by 7% to US$105m. Adjusted operating profit was US$118m in the second quarter of 2015, compared to an adjusted operating profit of US$87m in the second quarter of 2014. USG generated US$79m or, on an adjusted basis, US$78m during the quarter. Adjusted results exclude results from Gypsum Transportation Limited (GTL), a shipping operation that the company has exited, included in the gypsum segment.

"All of our businesses expanded their margins and contributed to our strong second quarter," said James S Metcalf, chairman, president and CEO of USG. "We generated the highest level of net income since the fourth quarter of 2006, when demand was 50% higher."

USG's gypsum segment generated US$98m of operating profit in the second quarter of 2015. On an adjusted basis, operating profit in the gypsum segment improved by US$20m, led by the US gypsum business. Wallboard provided US$14m of improved operating profit and the surfaces and substrates businesses contributed US$9m in total incremental profit. Favourable pricing and improved volumes coupled with lower natural gas costs and operational efficiencies drove the margin expansion in the US gypsum business.

"In the second quarter, our gypsum segment realised its strongest operating margin in over eight years," said Metcalf. "We are focused on expanding our margins and growing our non-wallboard portfolio of products in this business."

Commenting on the future of USG, Metcalf said that, "We made strides in all three phases of our 'Plan to Win' in the second quarter by strengthening our core operations, diversifying our earnings base and differentiating USG through innovation. The outlook for all of our businesses is bright."

US: Eagle Materials Inc has reported its financial results for its 2015 fiscal year that ended on 31 March 2015.

Earnings before interest and income taxes increased by 32% year-on-year to US$265m, reflecting improved sales volumes across nearly all business lines, with cement sales volumes setting an annual record of 4.8Mt. Net sales prices also strengthened across all businesses. Fourth quarter earnings before interest and income taxes increased by 31% to US$44.4m, as fourth quarter sales volumes improved across nearly all businesses, reflecting improving construction fundamentals in the US.

On 3 March 2015, Eagle entered into a definitive agreement with Holcim (US) to purchase its 600,000t/yr granulated ground blast furnace slag (GGBFS) plant in South Chicago. The purchase price of US$30m is subject to customary post-closing adjustments and will be funded from operating cashflow. The transaction is expected to close in the second quarter of its 2016 fiscal year and is conditioned upon the closing of the Lafarge-Holcim global merger.

Operating earnings from gypsum wallboard and paperboard grew by 28% year-on-year to US$177m in the 2015 financial year. Revenues from gypsum wallboard and paperboard grew by 13% year-on-year to US$525m. Gypsum wallboard and paperboard fourth quarter operating earnings grew by 32% year-on-year to US$38.3m. The increase in operating earnings was primarily due to higher net wallboard and paperboard sales prices and higher wallboard sales volumes. Gypsum wallboard and paperboard revenues for the fourth quarter grew by 5% year-on-year to US$112m. The average gypsum wallboard net sales price for the quarter grew by 4% year-on-year to US$168.97/Mft². Gypsum wallboard sales volumes grew by 5% year-on-year to 464Mft² in the fourth quarter.

US: USG's sales for the first quarter of 2015 have risen by 7% year-on-year to US$909m. The company's operating profit rose by 15% to US$76m in the same period. The positive results were driven by its gypsum and ceilings divisions.

"USG is off to a great start in 2015, led by the performance of our US Gypsum and US Ceilings businesses... We generated operating margin improvement in these businesses by achieving price increases, focusing on manufacturing cost control, and tailoring our spending on investments in these businesses," said James S Metcalf, Chairman, President, and CEO.

USG also announced that it has entered into agreements to sell the two ships in its non-core shipping business, Gypsum Transportation Limited (GTL), for US$42m. The sales of the ships are expected to close in April 2015.