Gypsum industry news

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.

US: Eagle Materials' sales revenue rose by 6% year-on-year to US$1.21bn in its financial year to 31 March 2017 from US$1.14bn in the same period in 2016. The building materials producer completed its acquisition of Cemex's Fairborn cement plant in Ohio with associated assets in February 2017 and this contributed to its cash flow in the period. The group's gypsum wallboard sales volumes rose by 4% to 231m³ from 222m³ despite a fall in volumes in the fourth quarter.

US: USG's profit has been reduced due to rising commodity costs in both its gypsum and ceiling businesses. Its operating profit fell by 22% year-on-year to US$91m in the first quarter of 2017 from US$116m in the same period in 2016. Its net sales rose by 2.7% to US$767m from US$747m, roughly in line with its sales revenue growth in 2016 as a whole. The group reported that US gypsum wallboard volumes decreased by 4% in the quarter. Domestic wallboard manufacturing costs increased by US$16m due to rising waste paper and synthetic gypsum input costs.

"We had sound operational performance in the first quarter and we are seeing solid demand for our products," said Jennifer F Scanlon, president and chief executive officer. "I am encouraged about our prospects for the balance of the year, despite the uptick we are seeing in commodity costs."

France: Saint-Gobain has reported sales growth in all main territories in the first quarter of 2017, led by Asia and its emerging markets. Net sales for its Interior Solutions division rose by 6.2% year-on-year to Euro1.71bn in the first quarter of 2017 from Euro1.61bn in the same period of 2016. This was supported by rising prices in a 'strong cost inflation environment.' Overall the group's net sales rose by 7.6% to Euro9.14bn. Notable geographical trends included a recovery in France and a continued poor market in Brazil.

"The first quarter saw robust trading. The good momentum in sales volumes observed in 2016 continued at the start of the year in all business sectors and regions. France benefited from the recovery in new-build activity, while other Western European countries delivered further growth. North America and emerging markets had a good start to the year. The group continued to pursue its priorities, focusing particularly on sales prices amid a more inflationary backdrop," said Pierre-André de Chalendar, chairman and chief executive officer of Saint-Gobain.

Belgium: Revenue from Etex's Building Performance division rose slightly to Euro1.44bn in 2016 from Euro1.43bn in 2015. The division produces gypsum wallboard as well as fibre cement boards and other dry construction materials. The group said that it had posted sound results in 2016, particularly in Europe, its largest market, where it performed within expectations.

However, the company's overall revenue fell by 5.6% year-on-year to Euro2.88bn from Euro3.05bn. It blamed this on the sale of its ceramics floor and wall tiles business in Latin America and unfavourable exchange rates. On a like-for-like basis it said that its revenue rose by 1.5% in the period. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 10.4% to Euro404m from Euro366m.