Gypsum industry news

France: Saint-Gobain's sales from its Interior Solutions division, comprising gypsum wallboard and insulation products, has risen by 2.1% year-on-year to Euro4.94bn in the first nine months of 2016 from Euro4.83bn in the same period in 2015. On a like-for-like basis the group said that its sales grew by 4.3%. It said that sales grew in all regions in the third quarter of 2016 and that despite a 'deflationary' environment prices remained under pressure in developed economies.

"The third quarter confirmed the upturn in volumes in Western Europe. France benefited from the steady improvement in new-builds; the UK showed no sign of weakness. Volumes continued to grow in US construction despite the lack of positive weather impacts for roofing in the quarter. Our businesses in Asia and emerging countries remained strong, delivering further robust growth. The price effect moved back into positive territory over the quarter, reflecting Saint-Gobain's strong positioning on its markets," said Pierre-André de Chalendar, chairman and chief executive officer of Saint-Gobain.

Overall, the group reported that its sales fell by 1.7% to Euro29.3bn from Euro29.8bn across all business lines although it said that on a like-for-like basis sales rose by 2.6%.

US: Net sales from USG's gypsum business have risen by 4.5% year-on-year to US$1.9bn in the first nine months of 2016 from US$1.82bn in the same period in 2015. Its operating profit rose by 18% to US$310m from US$262m. the company said that surfaces and substrates products drove US$5m of this improved profit. US wallboard volumes increased by 1% while domestic wallboard price was down roughly 1% from the third quarter of 2015. Inflation in wallboard input costs was offset by reduced selling, general and administrative expenses spending in the US gypsum business.

"I'm pleased to report that we expanded margins in both of our US businesses as well as in our USG Boral joint venture," said James S Metcalf, president and CEO of USG. He added that the company intends to use the US$670m from its sale of L&W Supply to reduce debt.

Overall, the company reported that its net sales rose by 4% to US$2.28bn from US$2.2bn and its net income rose by 13% to US$203m from US$179m. Sales from its USG Boral business rose by 4.9% to US$778m from US$742m. Improved results from USB Boral in the third quarter of 2016 were attributed to improved gypsum wallboard price and volume, manufacturing efficiencies and increased sales of 'adjacent' products.

Kuwait: Kuwait Gypsum Manufacturing and Trading's profits have risen to US$149,000 in the second quarter of 2016 from US$6660 in the same period in 2015. The company was also able to double its half-year profit to US$329,000 from US$162,000. The rise in profits was attributed to lower administrative and general expenses.

Belgium: Etex's sales revenue has fallen by 2.8% year-on-year to Euro1.48bn in the first half of 2016 from Euro1.52bn in the same period in 2015. However, on a like-for-like basis the group said that its revenue rose by 2.6% when exchange rates and scope were taken into account. Its profit fell by 12% to Euro55m from Euro63m.

The group reported that markets in Germany and France remain weak due to manufacturing capacity being downsized. In Latin American countries growth was realised with the exception of Brazil. The profitability of this growth was under pressure from exchange rates and increased competition.

Australia: Boral's profit after tax has risen by 8% year-on-year to US$204m in its financial year which ended on 30 June 2016 from US$190m in the previous year. Its sales revenue fell, by 2% to US$3.28bn, but revenue from continuing operations rose slightly. Revenue from continuing operations benefitted from stronger residential activity in Australia and the US, which offset the decline in resource-based and other major project activity. The company's earnings before interest and tax (EBIT) also rose due to operational cost improvements, lower fuel costs and some pricing gains.

"We have continued to improve our performance across our businesses in line with our strategy, managing our portfolio more efficiently and maintaining a strong balance sheet," said CEO and managing director Mike Kane. "The continued growth in Boral's earnings demonstrates the great work that has been done to improve our cost base, grow margins, and efficiently supply market demand, which continues to be strong in Australia and Asia, and is growing in the US."

The group's joint-venture with USG, USG Boral, saw its revenue rise by 10% to US$1.06bn from US$965m. This was attributed to growth in Sheetrock product
wallboard sales resulting in higher pricing, and growth in adjacent product (non-board) sales. Strong volume growth in Australia was offset by contraction in key Asian markets and price competition in South Korea. EBIT increased by 27% to US$136m from US$107m.

US: Continental Building Products' (CBP) net sales have risen by 12.5% year-on-year to US$229m in the first half of 2016 from US$204m in the same period in 2015. Its net income rose to US$25.2m from US$1.89m. Sales volumes of gypsum wallboard rose by 4.2% to 59.7Mm² from 57.3Mm².

"For the second consecutive quarter, we experienced stronger demand in our markets east of the Mississippi, which generated a 13% increase in wallboard volume versus the prior year," said Jay Bachmann, the chief executive officer of CBP.

France: Saint-Gobain's sales revenue has fallen by 1.6% year-on-year to Euro19.6bn in the first half of 2016 from Euro19.9bn in the same period of 2015. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 3.8% to Euro1.89bn from Euro1.96bn. The group blamed the loss in sales revenue on negative currency changes, especially in Latin American, and to a lesser extent, in the UK following its decision to leave the European Union. Saint-Gobain's Interior Solutions division, which includes gypsum wallboard and insulation production, reported a 3.1% rise in sales revenue to Euro3.3bn from Euro3.2bn.

"Saint-Gobain's sales for first-half 2016 confirm our February forecasts, with France stabilising and all regions making strong contribution to growth. Our strategy of investing in emerging markets provides us with a diversified platform for profitable growth. Our first-half results also benefited from efforts to optimise our operations, particularly in Western Europe, and from upbeat trading in the US. The results are in line with our objectives and we expect alike-for-like improvement in operating income for second-half 2016 versus second-half 2015. While the 23 June 2016 Brexit vote in the UK has created a climate of uncertainty, it does not affect our objectives," said Pierre-André de Chalendar, Chairman and Chief Executive Officer of Saint-Gobain.

US: USG's net sales have risen by 5% year-on-year to US$1.97bn in the first half of 2016 from US$1.90bn in the same period in 2015. The company's net income rose by 37% to US$141m from US$103m. Net sales for its overall gypsum business rose by 6% to US$1.27bn from US$1.19bn. However, net sales for its gypsum business in Mexico and Latin America fell by 3% to US$93m in the first half of 2016 from US$94m in the same period of 2015.

"Our focus on operational execution in all of our businesses drove our improved second quarter results," said James S Metcalf, Chairman, President, and CEO of USG. "Expanding operating margins is a key priority for USG, and we delivered margin expansion in all of our businesses in the second quarter."

US: Eagle Materials' sales revenue from gypsum wallboard has fallen slightly by 1.6% year-on-year to US$113m in the first quarter of its 2017 financial year that ended on 30 June 2016 from US$115m in the same period in 2015. Overall company revenue rose by 1.5% to US$298m from US$285m. Gypsum wallboard sales volumes rose by 2% to 54Mm² from 53Mm².

Saudi Arabia: National Gypsum Company has reported that its net profit fell by 64% year-on-year to US$1.5m in the first half of 2016, from US$4.2m in the same period in 2015. Its net profit for the second quarter of 2016 fell more sharply, dropping by 80% to US$573,000.