Gypsum industry news

Hungary: Saint-Gobain's Hungarian wallboard plant generated a revenue of Euro21.9m in 2014, according to Attila Piros, the managing director of the local Rigips unit. Saint-Gobain inaugurated the Euro30m wallboard plant, Hungary's first, in 2008. Since 2012, Rigips has boosted its use of capacity at the plant. In 2014, it used more than half of its installed production capacity.

Belgium: Etex Group has reported a 1.9% year-on-year drop in sales revenue to Euro3bn in 2014. Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 11.6% to Euro226m from Euro234m. It attributed the decline to a poor second half, which was hit by a slowdown in public and private investments, poor exchange rates in South America, slowing growth in emerging markets and recession-like conditions elsewhere.

In its outlook Etex anticipates that cyclic fluctuations will continue to appear in all of its markets throughout 2015. Emerging markets are expected to show minor growth, while the fundamental situation in Europe, and particularly in France, needs to improve further. "Overall results are expected to be stable", says Paul Van Oyen, CEO of Etex.

Bulgaria: Gips has reported that it made a consolidated loss of Euro2.1m in 2014 compared to the consolidated profit of Euro0.32m it declared in 2013. Consolidated revenue rose by 0.8% year-on-year in 2014 to Euro3.17m, Gips said in its latest financial statement. Natural gypsum producer Gips was set up in 1965.

France: Saint-Gobain aims to improve underlying operating profit in 2015 and save a further Euro400m. Saint-Gobain saw its 2014 operating profit rise by 1.6% to Euro2.8bn. On a like-for-like basis, the increase came to 7%.

"The group should benefit from good momentum in the US as well as in Asia and emerging countries in 2015," said Saint-Gobain in a statement. "In Western Europe, recovery will be held back by France."

Saint-Gobain derives about 66% of its sales from Europe and 25% from its home market in France. Total sales reached Euro41.1bn in 2014, down by 1.7%. Savings in 2014 reached Euro450m, as predicted in October 2014 when Saint-Gobain said that it aimed to do better than the Euro350m cost savings it had previously targeted for 2015. Saint-Gobain's net income, excluding depreciations and one-off charges, came to Euro1.1bn in 2014.

US: Continental Building Products (CBP) has announced strong results for the fourth quarter of 2014 and the entirety of the year.

"Our results marked a solid year of progress for our company, allowing us to generate significant cash flows and dramatically improve our balance sheet," said Jay Bachmann, CBP's CEO. "The positive momentum in our business continued into the fourth quarter, with our net sales up by 5.6% and our adjusted EBITDA and operating income increasing by 15.6% and by 35.2%, respectively, reflecting favourable operating leverage driven by our low cost structure. During the full year 2014, we converted the majority of our adjusted EBITDA into free cash flow, which we used to reduce our long-term debt and strengthen our financial position. As we move into 2015, we believe that the construction markets will continue to recover and steadily improve. Amid that backdrop, we believe that our business is well-positioned to continue building on our progress by optimising our revenues and exercising strict cost controls to deliver improved returns and cash flows."

Net sales for the fourth quarter of 2014 were US$121m, up by 5.6% from US$114m in the fourth quarter of 2013. The increase in sales was primarily driven by 6.8% growth in the average mill net price. Wallboard volumes were 627Mft2 compared to 632Mft2 in the 2013 quarter, with flat US volumes offset by a single-digit percentage decline in Canada. Gross profit was US$31.7m, up by 28.6% compared to US$24.6m in the 2013 quarter. The gross margin of 26.2% increased from 21.5% in the prior year quarter, primarily as a result of higher average wallboard mill net prices and CBP's focus on leveraging its low cost structure.

Operating income was US$21.5m, up by 35.2% from US$15.9m in the 2013 quarter. Interest expenses were US$4.6m, down from US$8.2m in the 2013 quarter, reflecting a reduction in the long-term debt and a decrease in the interest rate on CBP's borrowings. Net income during the quarter was US$10.4m compared to US$6.7m in the 2013 quarter. Adjusted EBITDA increased by 15.6% to US$34.5m, compared to US$29.8m in the 2013 quarter.

Net sales for the enitrety of 2014 were US$425m, up by 5.5% from US$402m in 2013. Wallboard volumes increased by 0.9% to 2.18Bnft2 compared to 2.16Bnft2 in 2013. The average wallboard mill net price increased by 6.1% year-on-year. Gross profit was US$94.3m, up by 35.6% from US$69.5m in 2013. The gross margin of 22.2% was higher than the 17.3% margin of the prior year. Operating income was US$60.8m, up by 104% from US$29.8m in 2013. Interest expense was US$29.1m compared to US$23.4m in the prior year. Net income was US$15.9m compared to US$4.9m in 2013. Adjusted net income was US$23.8m compared to US$22.8m in 2013, excluding the impact of nonrecurring costs. Adjusted EBITDA increased by 12.2% to US$115m compared to US$103m in 2013. During the full year of 2014, CBP generated operating cash flow of US$78m, incurred US$5.7m of capital expenditures and used cash on hand for the repayment of US$65.6m of debt.

Australia: Boral has reported a first-half 2015 profit of US$81.1m, benefiting from a recent overhaul of its business, a pickup in Australian demand for home-building products and a deeper push into Asian markets. Boral had reported a net loss of US$20.2m in the same period of 2014, as earnings were weighed down by asset write-downs.

Boral returned to profit in the second half of the 2014 fiscal year that ended on 31 June 2014, as it reaped the benefits from the earlier restructuring that reduced the size of its workforce and resulted in the closure of some unprofitable operations. "The restructuring and streamlining of Boral's businesses that has been taking place is enabling it to be more responsive to market changes," said chief executive Mike Kane.

Boral said that activity in the Australian housing market, which accounts for about 28% of total revenue, continued to gain pace during the period. A nascent housing recovery is underway in Australia, fuelled by record-low interest rates and demand from investors in major cities like Sydney. It is helping Boral to recover from several tough years, despite uncertainty about the outlook for the economy as a decade-long mining-investment boom slows. While the number of Australian home-building permits slipped by 3.3% month-on-month in December 2014, according to the latest government data, it followed a 7.7% rise in November 2014 from October 2014 and an 11.9% rise in October 2014 from September 2014.

Boral said that appetite for its products in other markets was also rising. It highlighted stronger gypsum demand in Korea and Thailand in particular, although it said that demand in China, where the property market is cooling, was subdued. In the US, Boral said that it was now seeing the benefits from a housing-market rebound and its own moves to restructure the business. The company said that it expects earnings to be 'broadly break-even' in the full 2015 fiscal year after considerable losses in recent years.

Kuwait: Kuwait Gypsum Manufacturing and Trading Co has posted a net profit of US$1.1m for 2014, recovering from a net loss of US$1114 in 2013. For the last quarter of 2014, Kuwait Gypsum registered a net profit of US$815,947, up from US$197,568 in the last quarter of 2013. Company assets rose to US$18.3m at the end of December 2014, compared to US$17.6m at the end of December 2013.

US: USG Corporation has reported fourth quarter 2014 net sales of US$954m, up by 4% from the fourth quarter of 2013, when net sales were US$915m. Its fourth quarter 2014 operating loss was US$24m compared to US$60m of operating profit in the fourth quarter of 2013, primarily due to US$75m of charges for impairments and other related costs associated with its non-core shipping business and US$13m of charges to permanently settle a pension plan in the UK. During the fourth quarter of 2014, net loss attributable to USG was US$53m compared to US$3m in the fourth quarter of 2013.

"I'm pleased with the progress we made towards our 'Plan to Win' during the quarter, delivering strong adjusted operating profit from our operations," said James S. Metcalf, chairman, president, and CEO. "All of our businesses are heading in the right direction and we are well positioned for profitable growth in all of our improving end markets."

USG's adjusted operating profit was US$79m in the fourth quarter of 2014, which includes, among other items, adjusted equity method investment income of US$14m from USG Boral Building Products, compared to an adjusted operating profit of US$75m in the fourth quarter of 2013. Adjusted net income was US$35m in the fourth quarter of 2014 compared to US$22m in the fourth quarter of 2013. Adjusted net income and adjusted operating profit in the fourth quarter of 2014 excluded long-lived asset impairment charges of US$60m and contract termination and loss on receivable charges of US$15m related to the corporation's non-core shipping business, as well as a pension settlement charge of US$13m related to the wind-up of its pension plan in the UK.

USG recorded full year 2014 net sales of US$3.7bn and an operating profit of US$162m, with a net income of US$37m. On an adjusted basis for the full year of 2014, adjusted operating profit was US$353m and adjusted net income was US$168m. For the full year of 2013, net sales were US$3.6bn, operating profit was US$258m and net income was US$47m. On an adjusted basis for the full year of 2013, adjusted operating profit was US$278m and adjusted net income of US$73m.

"In 2014 our adjusted net income of US$168m more than doubled relative to what we generated in 2013, with our USG Boral joint venture contributing significantly to our success," said Metcalf. "While the pace of the recovery is clearly more shallow than what we were anticipating, our trajectory continues to be positive and we are confident that 2015 will outperform 2014."

Hungary: Saint-Gobain's revenue in Hungary rose by 6.2% to Euro35.2m in 2014 from Euro33.1m in 2013. In 2015, it expects revenue growth to be about the same. The business employs 500 people and exports more than 25% of its production. Saint-Gobain's biggest investment in Hungary is a Euro32.2m wallboard plant.

US: Continental Building Products (CBP) has announced its results for the third quarter that ended 30 September 2014. CBP's net sales grew by 8.6% year-on-year to US$114m, adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 32% year-on-year to US$33.7m and operating income was up from US$0.3m in the same period of 2013 to US$20.2m. Its wallboard sales volumes grew by 3.8% year-on-year to 590Mft² and sales prices rose by 6.3% year-on-year.

"Our focus on operational excellence and maximising our returns from our low cost base was evident in our third quarter results," said Ike Preston, CBP's CEO. "As we finish 2014 and look to the new year, we remain focused on realising the full potential of our business. We are confident that the long-term fundamentals for construction growth remain strong and we remain focused on delivering value to our customers while actively managing our costs and continuing to deploy our capital in a disciplined manner to drive shareholder value."