Gypsum industry news

Spain: Saint-Gobain España’s sales rose by 8% year-on-year to Euro1.18bn in 2017. In an interview with the Expansión newspaper, Mediterranean Region chief executive officer (CEO) Gianni Scotti said that increased housing construction in Spain had driven demand for building products. He added that Spain represents 58% of the sales from the eight countries in the company’s Mediterranean region. The majority of the division’s sales come from products for the construction industry including gypsum wallboard and insulation. However, Scotti wanred that high energy costs in Spain are making the country less competitive compared to other parts of Europe.

Australia: Boral Ltd has announced that its profit for the first half of the 2017-2018 fiscal year (from 1 July 2017 – 31 December 2017) rose by 13%. The company benefited from the 2017 acquisition of the US-based building products firm Headwaters Inc. and continued growth in its Australian business.

It reported a net profit of US$136.0m for the six month period, a rise of 12.7% compared to the same period of the 2016 – 2017 fiscal year when it made US$120.7m. Its profit before amortisation and significant items increased by 58% to US$$186.5m.

"These strong results confirm that our transformation strategy is on track," said Chief Executive Mike Kane. "The Headwaters acquisition has helped transform Boral into a construction materials and building products group with a greater geographic reach and improved prospects for growth."

Boral’s US business, which was only breaking even in 2015 – 2016, recorded a fourfold rise in earnings, despite adverse impacts from bad weather, including two hurricanes.

Kane also said Boral’s Australian arm, its largest divison, was ‘exceptionally strong’ during the half. Boral reported a 12% rise in earnings before interest, tax, depreciation and amortisation from that business.

"Higher revenues and earnings were driven by increased spending on infrastructure, in line with our expectations that a large proportion of our work would gradually shift from residential to infrastructure projects, primarily in the eastern states," said Kane.
Boral reported a 1% dip in earnings from its USG Boral division, a joint-venture with USG Corp., the largest US maker of gypsum wallboard, which operates throughout Asia, the Middle East, Australia and New Zealand.

US: Eagle Materials has reported its financial results for the third quarter of the 2018 fiscal year, which ended on 31 December 2017. It recorded record revenues of US$359.4m, a rise of 19% compared to the same period of the 2017 fiscal year.

Gypsum wallboard and paperboard revenues for the third quarter of the 2018 fiscal year totalled US$162.6m, which were 11% greater than the same quarter a year ago. The average gypsum wallboard net sales price this quarter was US$151.13/MSF, 1% less than the same quarter a year ago. Gypsum wallboard sales volumes were a third quarter record of 709MMSF, a 10% increase from the same quarter last year. Paperboard sales volumes for the quarter were also a record and 7% greater than the same quarter a year ago. The average paperboard net sales price for the quarter was US$581.95/t, 11% greater than the same quarter a year ago.

Gypsum wallboard and paperboard activities reported third quarter operating earnings of US$50.7m, up by 1% from the same quarter last year. The earnings improvement primarily reflects improved gypsum wallboard and paperboard sales volumes and higher average paperboard net sales prices.

During the third quarter, Eagle and its subsidiary, American Gypsum, entered into settlement agreements with counsel representing the direct and indirect purchaser classes to settle all claims made against the company and American Gypsum. Pursuant to the settlement agreements, which remain subject to court approval, the Company and American agreed to make payments totalling approximately US$39m. Eagle and American Gypsum continue to deny all wrongdoing but settled to avoid further litigation expense, distraction of management, and the risk of litigation. Eagle expects to make this cash payment in the next 12 months.

US: USG’s operating profit fell by 7% year-on-year to US$367m in 2017 from US$394m in 2016. Its net sales rose by 6% to US$3.2bn from US$3.02bn. In the fourth quarter the company reported that wallboard volumes in the US increased approximately by 14% while prices declined by 4% year-on-year. It made a net loss of US$95m in the quarter, in part due to a US$138m income tax expense resulting from the Tax Cut and Reform Bill.

“We had an outstanding close to a solid year for USG. The combination of focused operational performance by our manufacturing facilities and a high level of service to our customers enabled us to profitably grow our business, with net sales increasing by 13% and adjusted operating profit by 10%,” said Jennifer F Scanlon, president and chief executive officer of USG.

Switzerland: Sika’s sales rose by 8.9% year-on-year to Euro5.3bn in 2017 in local currencies. The chemical production company attributed this to a strong fourth quarter with positive development of business in all regions, investments in new factories, the creation of new national subsidiaries and the launch of new products. A record net profit figure is expected for the 2017 financial year. Particular growth in the fourth quarter was noted in the US, Mexico, Argentina, China, Southeast Asia, the Pacific, the Middle East, Eastern Europe and Africa.

“We expect to break new records for both the operating result and net profit. With nine new factories, three further national subsidiaries, and seven company takeovers, we have made significant investment in growth markets as well as in growth platforms in the form of product technologies and distribution channels. These 19 strategic investments, our pipeline with innovative quality products and our global presence – we now have 100 national subsidiaries and more than 200 factories – allow us to look toward the future with optimism,” said chief executive officer Paul Schuler.

US: USG’s operating profit for its gypsum business has fallen by 4.5% to US$85m in the third quarter of 2017 from US$88m in the same period in 2016. The gypsum wallboard producer blamed this on falling prices, rising input costs and poor weather. It said that the average realised selling price for US wallboard decreased by approximately 2% sequentially and was impacted by freight costs and changes in wallboard product mix due to hurricanes Harvey and Irma. US wallboard manufacturing costs also increased by US$10m due, primarily to increased waste paper costs. Despite this, overall net sales for the quarter increased.

“We had positive momentum in the third quarter, with increased net sales and wallboard volume,” said Jennifer Scanlon, president and chief executive officer (CEO) of USG.

Gypsum segment net sales rose by 5.4% to US$2bn for the first nine months of 2017 from US$1.9bn in the same period in 2016. Operating profit fell by 14% to US$266m from US$310m.

France: Saint-Gobain has continued growing its sales across all businesses in the third quarter of 2017. Its overall sales grew by 4.1% year-on-year to Euro10.2bn in the quarter from Euro9.76bn in the same period in 2016. This trend extends to the year so far, with a rise of 4.3% to Euro30.6bn in the first nine months of 2017, from Euro29.3bn in the same period in 2016.

“The third quarter confirmed the upbeat trends seen in the first half, excluding the impact of the cyber-attack. All business sectors and regions advanced, including France. We continued to see a good price effect against a tougher basis for comparison, but not yet sufficient in all of the group’s businesses given the more inflationary raw material and energy cost environment,” said Pierre-André de Chalendar, chairman and chief executive officer (CEO) of Saint-Gobain. He added that the group had signed 23 acquisitions since the beginning of the year, including the recently finalised Glava deal.

Sales from the group’s Interior Solutions division, which includes gypsum wallboard and insulation products, saw its saw increase by 3.6% to Euro5.11bn from Euro4.94bn. The group attributed the sales growth in this business to ‘healthy’ volume trends in Western Europe and in Asia and emerging countries. Trading in North America was reported as ‘stable’ but with a smaller pricing contribution in a more competitive environment. It added that pricing for the division lags behind rises in input costs such as a raw materials and energy.

US: Eagle Materials' revenue has risen by 23% year-on-year to US$366.1m in the first quarter of its 2018 fiscal year, which runs 1 April – 30 June 2017. Its first quarter earnings before interest and income taxes increased by 22%, reflecting improved sales volumes and net sales prices across nearly all businesses.

Eagle Materials' Gypsum Wallboard and Paperboard revenues for the first quarter totalled US$154m, 9% higher year-on-year. The average gypsum wallboard net sales price in the quarter rose by 10% to US$1711/Mm² (US$159/MSF). Gypsum wallboard sales volumes rose by 11% to 60Mm² (654MMSF). Paperboard sales volumes fell by 5% to 79,000t, reflecting the timing of third-party purchases. The average paperboard net sales price rose by 10% to US$550/t.

Gypsum wallboard and paperboard reported first quarter operating earnings fell by 4% to US$48.8m. The earnings decline primarily reflected increased operating costs at Eagle Materials' paper mill due to the timing of its annual maintenance outage and higher recycled fibre costs, partially offset by improved wallboard sales volumes and sales prices.

France: Saint-Gobain has grown its sales in the first half of 2017 despite a reported Euro220m impact from a cyber attack in June 2017. The building materials producer's sales rose by 4.4% year-on-year to Euro20.4bn in the first half of 2017 from Euro19.5bn in the same period in 2016. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 5.8% to Euro2.07bn from Euro1.96bn. It attributed the sales growth to rising prices, increased sales volumes and positive currency exchange rates.

"The first half of 2017 confirmed the encouraging trends seen in 2016, particularly in France. Excluding the one-off impact of the cyber-attack, the group grew at its fastest rate since the first half of 2011 translating into double-digit growth in operating income. The focus on sales prices paid off, allowing us to offset the rise in raw material and energy costs at group level. Overall, the results were in line with our expectations, and we can therefore confirm with confidence our 2017 objectives," said Pierre-André de Chalendar, the chairman and chief executive officer (CEO) of Saint-Gobain.

By business line the group's Interior Solutions division of its Construction Products (CP) business reported an organic growth of 4.1% in the first half of the year, along with both rising sales volumes and prices, despite rising raw material and energy costs. Trading in Western Europe and in Asia and emerging countries improved in terms of both volumes and prices, with prices continuing to rise during the second quarter. North America also advanced, with a slight acceleration in prices since the first quarter.

With respect the cyber attack the group said that the full year impact of the incident upon sales is expected to be under Euro250m. Just over half the impact of the attack affected its Building Distribution business and the rest affected its CP unit. Geographically, the worst affected areas were in Western Europe, especially in Scandinavia, Germany and France.

US: USG Corporation has reported its financial results for the second quarter of 2017, showing a double digit increase in wallboard sales despite a competitive environment. "Our US wallboard shipments in the second quarter of 2017 were up double-digits and were at the highest levels we have seen since 2008," said Jennifer F Scanlon, President and CEO. "However, rising commodity costs and a competitive pricing environment weighed on our operating margins and second quarter performance. We are taking actions to address inflation and will continue our strategic investment in advanced manufacturing to deliver profitable growth."

On a consolidated basis in the second quarter of 2017, USG's net sales were US$811m, compared to US$769m in the second quarter of 2016. Operating profit decreased to US$96m from US$122m, while adjusted operating profit decreased to US$117m from US$127m in the second quarter of 2017 compared to the second quarter of 2016. USG generated US$36m compared to US$74m in the second quarter of 2016.

The corporation's gypsum segment generated US$90m of operating profit in the second quarter of 2017. On an adjusted basis, operating profit of US$95m in the gypsum segment decreased by US$6m compared to the second quarter of 2016. US wallboard volumes increased by 10% in the second quarter of 2017. US wallboard prices decreased by approximately 1% due primarily to competitive pricing pressures and the impact of transitioning certain wallboard volumes from wholly-owned distribution at L&W Supply, which was sold in 2016, to independent distribution. USG's US wallboard production costs increased by US$8m due almost exclusively to rising waste paper costs.