Gypsum industry news

Belgium: Etex has recorded a first-half net recurring profit of Euro100m, up by 6.3% year-on-year from Euro94.1m in the same period of 2018. Paul Van Oyen, Chief Executive Officer (CEO) of Etex, noted the role of ‘strong market demand, mostly driven by the Building Performance division’ in driving the company’s growth. Only its Etex Exteriors division, launched on 1 January 2019, has not shown net profitability. Etex’s financial debt has decreased by Euro181m to Euro538m from Euro719m on 30 June 2018.

Australia: USG-Boral’s earnings have fallen due to a poor construction market in South Korea. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 6% year-on-year to US$170m in the financial year to 30 June 2019 from US$181m in the previous year. Its revenue grew by 2% to US$1.08bn from US$1.06bn. The joint venture said that, excluding South Korea, earnings were ‘steady’ as lower earnings from Indonesia, China and the Philippines were offset by increased contributions from Thailand, Vietnam and India, as well as a continued strong contribution from Australia.

The company also announced that Boral has entered into an agreement with Germany’s Knauf to form an expanded 50:50 plasterboard joint venture in Asia and for Boral to return to 100% ownership of USG Boral Australia & New Zealand. Completion of the deal is subject to regulatory approval. It follows the acquisition of USG by Germany’s Knauf in early 2019.

US: Continental Building Products says it has been confronting a ‘sluggish’ new home construction market in the second quarter of 2019. Jay Bachmann, president and chief executive officer (CEO), said that the company was expecting the market to recover in the second half of the year and its improvement programme to reduce costs. Its net sales fell by 4% year-on-year to US$246m in the first half of 2019 from US$256m in the same period in 2018. Its net income dropped by 34% to US$28.8m from US$35.5m. Its gypsum wallboard volumes fell slightly by to 123Mm².

The wallboard producer also said that the shutdown of its Buchanan plant in New York due to mechanical failure might cause a boost operating income and earnings before interest, taxation, depreciation and amortisation (EBITDA) of up to US$2m once an insurance claim is settled. The plant was shut from January 2019 to 15 March 2019. The company increased production at its plants in Silver Grove, Kentucky and Palatka, Florida to offset a portion of the lost production from the Buchanan plant.

US: Eagle Materials’ revenue from its gypsum wallboard business fell by 11% year-on-year to US$127m in the first quarter of its financial year to 30 June 2019 from US$142m in the same period in 2018. Its earnings dropped by 25% to US$37.9m from US$50.5m. Wallboard sales volumes decreased by 7% to 61Mm² from 66Mm². It attributed the loss of revenue on lower volumes and poor pricing although it said that buying activity around a price increase in July 2019 suggested that the market was ‘healthy.’

France: Saint-Gobain’s sales rose by 4.3% year-on-year to Euro21.7bn in the first half of 2019 from Euro20.8bn in the same period in 2018. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 8.4% to Euro2.42bn from Euro2.23bn. Growth was reported for its gypsum business in all territories apart from North America. Particular growth was noted in its Asia-Pacific region.

Switzerland: Sika’s net sales grew by 7.6% year-on-year to Euro3.38bn in the first half of 2019 from Euro3.14bn in the same period in 2018. Its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 14.5% to Euro565m from Euro493m. The building chemicals producer noted that its takeover in the reporting period of Parex, a globally leading producer of facade mortar, technical mortar, tile adhesives, and waterproofing systems, was the largest acquisition in its history.

US: Eagle Materials’ gypsum wallboard and paperboard sales grew by 5% year-on-year to US$634m in the year to 31 March 2019 from US$603m in the same period in 2017. Its gypsum wallboard sales volumes increased by 4% to 246Mm2 from 237Mm². Operating earnings from this division rose by 13% to US$216m from US$191m. Sales were driven by higher sales volumes and prices. Overall, the company’s sales and earnings grew slightly.

France: Saint-Gobain’s sales rose by 6% year-on-year to Euro10.4bn in the first quarter of 2019 from Euro9.76bn in the same period in 2018. Sales for most of the group’s divisions rose with the exception of Asia-Pacific. Gypsum business growth was reported in Northern Europe, South Europe – Middle East & Africa and Asia Pacific. Like-for-like sale in Asia Pacific were supported by the start-up of a fifth float line in India. Insulation business growth was also noted in France.

Belgium: Etex’s Building Performance division’s sales rose by 6.9% year-on-year to Euro1.65bn in 2018. It attributed this growth to the good performance of gypsum wallboard sales in most territories and especially in France, the UK and Central & Eastern Europe. However, challenging market conditions and competition were reported in Germany. Overall, the group’s revenue rose by 4.1% to Euro2.9bn from Euro2.78bn. Its earnings before interest, taxation, depreciation and amortisation (EBTIDA) fell by 9.5% to Euro391m from Euro432m. Issues with negative exchange rate effects and hyperinflation in Argentina were reported.

Germany: Wacker’s silicones division has driven its sales growth in 2018 despite a contraction in the polysilicon market. Its group sales rose by 1% year-on-year to Euro4.98bn in 2018 from Euro4.92bn in 2017. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 8% to Euro930m from Euro1.01bn. It blamed this on issues at its Charleston plant in the US, an on-going insurance claim and higher raw material and energy costs.

“From today’s perspective, 2019 is not going to be an easy year,” said chief executive officer Rudolf Staudigl. “For our chemical divisions, we are confident that our excellent products will keep us on our growth path. On the other hand, solar-grade polysilicon overcapacities in China are slowing the earnings trend at our polysilicon business – and thus at the group – despite our leading market and quality position.” He added that a ‘particular’ challenge facing energy-intensive companies like Wacker was the increase in electricity prices in Germany.