Gypsum industry news

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."

Bulgaria: Bulgarian gypsum producer Gips has announced that its consolidated loss widened by 33% to Euro1.6m in January - September 2014. Consolidated revenues decreased by 5.0% year-on-year to Euro2.45m in the first nine months of 2014. Its operating loss widened to Euro431,239 during the period, from Euro88,500 in 2013.

Australia: A wet winter has delayed construction activity in key east coast markets as New South Wales experienced its wettest August in 16 years. Boral's CEO Mike Kane has told shareholders that more heavy rain could buffet earnings in its construction, materials and cement division during the rest of 2014 and 2015.

"Expectations could be dampened if we are unable to realise potential property sales and some level of price increase in this very competitive market and if we experience extended periods of adverse weather," said Kane. However, he added that Boral expected to more than double earnings in its building products division in 2014 and 2015, which made US$8m in earnings before interest and tax in the 2013 – 2014 financial year. Kane said that rising energy and labour costs remained a concern across the group.

Chairman Bob Every said that Boral expects a resources industry slowdown, particularly in Queensland. "We are expecting continued softening in roads and infrastructure activity for most of fiscal 2015 before a solid multi-year pick-up from fiscal year 2016," said Every.

"In our 2015 financial year we continue to expect ongoing strong results from construction materials and cement, improvements from both the building products and Boral USA divisions and improvements in the underlying USG Boral business," said Kane. "We anticipate return on funds employed to improve, despite the shift to equity accounting on Boral's 50% interest in the Gypsum joint venture." Boral made a net profit of US$173m in ist 2014 financial year, an improvement on a US$212m loss suffered during the previous financial year.

Every also announced his intention to stand down in 2016: "I was re-elected by shareholders at Boral's annual general meeting last year and at the time I intended that, if I was re-elected, that this would be my last term on the board. My intentions are unchanged. Therefore, I will not stand for re-election in 2016. I will work with the board to identify the best possible candidate for a successor for the role of chairman and I will help to ensure an orderly transition process."

US: Eagle Materials has reported its financial results for the second quarter of its 2015 fiscal year, which ended 30 September 2014. Second quarter earnings before interest and income taxes (EBIT) increased by 24% year-on-year to US$78.5m, as both second quarter sales volumes and sales prices improved in nearly all businesses.

As previously announced on 17 October 2014, Eagle entered into a definitive agreement to acquire CRS Proppants and its subsidiaries, including Great Northern Sand, an established supplier of high-quality northern white frac-sand to the energy industry. The cash purchase price of US$225m is subject to customary post-closing adjustments. The acquisition is expected to close during Eagle's third fiscal quarter, subject to receipt of required regulatory approvals.

Gypsum wallboard and paperboard reported second quarter operating earnings of US$45m, up by 22% from the same quarter of 2013. Improved wallboard net sales prices and increased wallboard and paperboard sales volumes were the primary drivers of the quarterly earnings increase. Wallboard and paperboard revenues for the second quarter totalled US$133m, an 11% increase from the same quarter of 2013. The revenue increase reflects higher average wallboard net sales prices and higher wallboard and paperboard sales volumes. Wallboard sales volumes for the quarter of 567Mft² are 2% higher than the same quarter of 2013.

US: USG has reported US$972m of sales for the third quarter of 2014, up by 5% from the same period in 2013. The company recorded a net loss of US$11m for the period, compared to a profit of US$23m in 2013. For the first nine months of 2014, sales were US$2.8m, a year-on-year increase of 4%. Profit grew by 82% to US$91m.

During the third quarter of 2014, USG reached an agreement in principle to settle all claims made in the direct and indirect purchaser class actions consolidated in the lawsuit, In re: Domestic Wallboard Antitrust Litigation, MDL No. 2437, pending in the United States District Court for the Eastern District of Pennsylvania. Pursuant to the agreement in principle to settle, which is subject to finalisation of a settlement agreement and court approval, USG will make a payment of US$48m. USG strongly denies any wrong-doing for the claims made in the lawsuits, but settled to avoid the expense, distraction and risk of further litigation. USG expects to make this cash payment within the next 12 months, while recording the US$48m charge in the third quarter of 2014.

"It is very disappointing to settle this lawsuit when we strongly believe we have done nothing wrong," said James Metcalf, president and CEO of USG. "However, we have to be realistic about the cost and risk a lawsuit like this creates for USG."

Australia: Building materials supplier Boral says that its prospects are improving as government infrastructure spending increases and industrial turmoil recedes. "After reporting lower earnings for two years running, we have clearly turned the corner," said Boral's chief executive Mike Kane.

Boral swung to an annual net profit after tax of US$161m in the financial year ending 30 June 2014, bouncing back from a US$192m net loss in the financial year ending 30 June 2013. The full-year result showed market conditions had improved across all of its divisions in Australia, the US and Asia.

Kane also expressed confidence in the American USG-Boral joint venture, which will soon launch a new lightweight gypsum board into 12 markets across Australia, Asia and the Middle East.

Uzbekistan: JSC Uzstroymateriali's building materials exports made US$42.9m in the first six months of 2014, which is 15.5% more compared to the same period of 2013. Enterprises of the company have increased their production by 4.5% for the reporting period.

Cement production grew by 4.9%, gypsum by 10.7%, dry construction mixes by 32%, gypsum boards by 2.9% and ceramic tiles by 10.1%. The total amount of capital investments of the largest enterprises of Uzstroymateriali amounted to US$18.3m, a 371% year-on-year increase.