Gypsum industry news

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.

Chile: Knauf Gips KG has purchased a gypsum quarry from cement producer Cementos Bio Bio for US$20m. The acquisition will allow Knauf to consolidate its presence in South American. The company, which already owns three gypsum plants in Argentina, Brazil and Colombia, plans to expand its geographical reach to Ecuador, Venezuela, Central America and the Caribbean.

Georgia/Azerbaijan: The value of imported construction materials from Azerbaijan to Georgia fell by 50% from January 2015 to September 2015, according to a report issued by the National Statistics Office of Georgia.

The country imported 64,870t of gypsum plaster and other anhydrites worth a total of US$8.7m from Azerbaijan during the period. Further, the volume of imported construction materials from Azerbaijan to Georgia decreased by 39.7% compared to the same period in 2014. Officials noted that Georgia imported 107,630t of construction materials, worth US$18.5m, from Azerbaijan during the period. Construction materials accounted for 2.2% of the total volume of Azerbaijani exports to Georgia in the first nine months of 2015. In total, Georgia imported US$392m in products from Azerbaijan in January 2015 – September 2015, or 13.7% less than in the same period in 2014.

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."