Gypsum industry news

France: Saint-Gobain’s sales rose by 1.9% year-on-year to Euro20.8bn in the first half of 2019 from Euro20.4bn in the same period in 2017. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell very slightly to Euro2.07bn.

"The second quarter marks a return to supportive trends in all our main markets. After a disappointing first quarter, affected by harsh winter weather in Europe, which weighed on results, the second quarter was far more encouraging in terms of volumes and prices. The group succeeded in further raising sales prices amid continued raw material and energy cost inflation. Despite a combination of temporary one-off factors, our first-half results progressed once again,” said Pierre-André de Chalendar, chairman and chief executive officer (CEO) of Saint-Gobain.

The group’s Interior Solutions division, including gypsum wallboard and insulation production, reported 7.1% organic growth, with rising sales prices in the period although raw material and energy costs inflated. The group noted that although its operating margin was held back by weather conditions in Europe in the first quarter and by the on-going shift from synthetic to natural gypsum, it benefited over the half-year period from a positive price-cost spread in terms of raw materials and energy.

US: USG has blamed falling operating profits on costs relating to its ‘Customer-First’ strategy and rising general costs, including those from transportation. Its operating profit fell by 32% year-on-year to US$121m in the first half of 2018 from US$179m in the same period in 2017. Its net sales rose by 6% to US$1.67bn from US$1.58bn.

For its wallboard and surfaces business the company said that its wallboard price increased by 2% from the second quarter of 2017 due mostly to a price increase in January 2018. Wallboard sales volumes increased by 2% compared to the second quarter of 2017. However, wallboard costs were US$12m higher than the previous year primarily due to rising input and transportation costs.

The building materials producer confirmed that its merger with Germany’s Knauf is expected to complete in early 2019, subject to shareholder and regulatory approval.

France: Saint-Gobain’s Interior Solutions division has grown its sales in Asia and emerging countries in the first quarter of 2018. Its sales rose by 2.4% year-on-year to Euro1.75bn in the first quarter of 2018 from Euro1.71bn in the same period of 2017. The group reported that trading in Western Europe was partly affected by weather conditions, although the underlying growth trends were good, except in the UK. North America posted growth, led by prices. Overall, the group’s sales fell slightly to Euro9.76bn due to poor weather and reduced working days.

US: USG has blamed falling sales for its wallboard business on prices rises and inclement weather. The net sales for its wallboard and surfaces business fell by 6% year-on-year to US$441m in the first quarter of 2018 from US$469m in the same period in 2017. Its operating profit fell by 38% to US$49m from US$79m. Overall the company’s sales rose by 2.5% to US$786m.

“Our wallboard volumes were impacted by the timing of our US wallboard price increase and the frequent storms that affected many regions of the country. However, we are encouraged to see shipping volumes increase over the last six weeks, as our Sheetrock brand and industry leading technology continue to be preferred by contractors,” said Jennifer Scanlon, president and chief executive officer of USG.

The company said that its wallboard price increased by 9% from the fourth quarter of 2017 and 1% from the first quarter of 2017, due to a price increase in January 2018. It added that wallboard costs were US$14m higher in the quarter year-on-year due to retained staff levels, incurred costs to start-up a lower-cost line and input cost inflation.

Belgium: Etex’s Building Performance division’s sales revenue rose by 5.35% year-on-year to Euro1.53bn in 2017 from Euro1.45bn in 2016. Strong performance in the UK, France and Germany contributed to this result in Europe. In Latin America growing markets were noted in Argentina, Brazil and Peru. The group acquired full control of Spanish gypsum wallboard manufacturer Pladur in 2017.

Overall, the group reported that its revenue rose by 4.5% on a like-for-like basis to Euro2.79bn across all business lines. Its earnings before interest, taxation, depreciation and amortisation rose by 7% to Euro432m from Euro404m.

China/Tanzania: China National Building Material (CNBM) has started work on a gypsum wallboard plant in Tanzania. The project is part of its participation in the government’s ‘One bet, one road’ industrial strategy.

Revenue from the group’s new materials division that produces gypsum wallboard rose by 25% year-on-year in 2017 to US$2.03bn from US$1.62bn in 2016. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBTIDA) rose by 40% to US$577m from US$413m. Its production volumes of gypsum boards rose by 12% to 1826Mm² from 1632Mm².

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.