Gypsum industry news

US: Continental Building Products (CBP) has announced its results for the second quarter of 2014, which ended on 30 June 2014. Net sales increased by 3.2% to US$103m and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to US$26.7m from US$27.4m for the same period of 2013.

"During the second quarter we continued to grow our net sales, generate significant cash flow and strengthen our balance sheet," said Ike Preston, CBP's CEO. "Excluding the impact of higher freight costs, our average mill net pricing remained firm compared to the first quarter 2014, as expected. Our overall modest wallboard demand was supported by higher shipments in our US operations that grew by 3.1% compared to 2013. As we look to the remainder of 2014, we remain confident in our ability to maintain disciplined cost control and generate additional cash flow as demand improves."

Average gypsum wallboard prices rose by 4.1% during the quarter. Wallboard volumes rose slightly to 525Mft² compared to 523Mft² in the same quarter of 2013, with a 3.1% increase in US volumes mostly offset by lower volumes in Canada. The second quarter gross profit was significantly impacted by purchase accounting from the acquisition by Lone Star. Gross profit was US$20.9m, down compared to US$25.7m in the same quarter of 2013, primarily as a result of US$7.8m in higher depreciation and amortisation costs from the acquisition.

Operating income was US$12.8m in the second quarter of 2014, down from US$17.2m in the prior year quarter, largely attributable to the impact of higher depreciation and amortisation resulting from the Lone Star acquisition. Net income was US$4.7m for the second quarter of 2014, compared to US$16.7m in the prior year quarter.

US: USG Corporation has reported its strongest quarterly net income since 2007. Second quarter 2014 net sales of US$948m were up by 3% from second quarter 2013 net sales of US$916m. USG's second quarter 2014 operating profit was US$98m compared to US$74m in the second quarter of 2013. Second quarter 2014 net income was US$57m. This compares to a net income of US$25m in the second quarter of 2013.

"I'm pleased to report our best quarterly results in seven years," said James S Metcalf, chairman, president, and CEO of USG. "Despite slower than expected acceleration in industry opportunity, most of our businesses and products improved their performance from a year ago and we also recorded our first full quarter of operations in our USG Boral joint venture."

The corporation's adjusted operating profit was US$93m in the second quarter of 2014, which includes adjusted equity method investment income of US$6m from USG Boral Building Products, compared to an adjusted operating profit of US$76m in the second quarter of 2013. Adjusted net income was US$48m in the second quarter of 2014 compared to an adjusted net income of US$26m in the second quarter of 2013. Adjusted net income in the second quarter of 2014 excluded, among other items, a US$12m gain on the sale of its New Jersey paper mill, which has been idled since 2009.

"We remain confident in the recovery, but challenges in the macro-economic environment still exist," said Metcalf. "However, we believe that the second half of the year will be better than the first half and we are well positioned to capitalise on the improving opportunity."

US: Eagle Materials has reported financial results for the first quarter of fiscal 2015, which ended on 30 June 2014. First quarter earnings before interest and income taxes increased by 21% year-on-year to US$59.8m, as first quarter sales volumes improved across nearly all businesses areas and sales prices improved in all businesses.

Gypsum wallboard and paperboard reported first quarter operating earnings were US$45.0m, up by 27% from the same quarter of its 2014 fiscal year. Improved wallboard sales prices and increased wallboard and paperboard sales volumes were the primary drivers of the earnings increase. Wallboard and paperboard revenues totalled US$136m, an 18% year-on-year increase. The revenue increase reflects higher average wallboard sales prices and higher wallboard and paperboard sales volumes. The average wallboard sales price grew by 11% year-on-year. Wallboard sales volumes of 569Mft² represent a 7% year-on-year increase.

Thailand: Thai Gypsum Products Plc (TGP), a subsidiary of France's Saint-Gobain, expects sales of its Gyproc construction and finishing materials will expand by 5% in 2014, citing continuous growth in home renovations and building markets.

Thongchai Kamolpattana, the commercial director for the Gyproc brand, said that demand from housing projects and home renovations had increased since 2013 and would allow TGP to earn higher revenue in 2014. Kamolpattana added that provincial markets would keep Gyproc sales afloat even if political problems persist in Bangkok.

Earlier in 2014 TGP experienced a minor negative effect from the prolonged political impasse that caused consumers to delay decisions to buy condominium units in Bangkok. "Demand for condominiums declined because customers in Bangkok took a wait-and-see stance," said Kamolpattana. "However, our market still did well in other provinces." He added that if political problems continue until year-end, TGP's performance in Bangkok might be affected. "If so, consumer confidence would be badly affected and that might reduce demand for our products. However, business confidence has rebounded since the coup."

Gyproc has expanded into modern-trade malls, particularly in Chiang Mai and Chon Buri provinces, helping the brand to boost sales by 5%. The products are available in 400 malls, resulting in greater brand awareness and accessibility to its products among contractors and homeowners nationwide.

The company plans to open more Gyproc solution centres in 2014, including in Phuket, in order to prepare for rising opportunities under the Asean Economic Community, which is due to kick off late in 2015. According to Kamolpattana, gypsum boards have gained strong market recognition in 20 Asia-Pacific markets, particularly the Philippines, Malaysia, Indonesia and Australia.

India: Gypsum producer FCI Aravali Gypsum and Minerals India Ltd (FAGMIL) has announced profits of US$8.74m in 2013 – 2014, up from US$2.64m in 2009 – 2010.

US: Eagle Materials Inc has reported financial results for fiscal year 2014, which ended on 31 March 2014. Company revenues were up by 40% year-on-year to US$898.4m and net earnings grew by 50% year-on-year to US$200m, reflecting improved sales volumes and stronger sales prices across all business lines. Annual revenue and earnings improvement also reflects the acquisition of assets, including cement plants in Missouri and Oklahoma on 30 November 2012.

Fiscal 2014 operating earnings from gypsum wallboard and paperboard grew by 46% year-on-year to US$138.5m. Revenues from gypsum wallboard and paperboard were up by 22% year-on-year at US$465.1m.

Gypsum wallboard and paperboard fourth quarter operating earnings were US$29.0m, up by 9% from the same quarter of fiscal 2013. The increase in operating earnings was due to higher wallboard sales prices and volumes, which were offset by US$1.5m maintenance costs, US$1.3m legal costs and US$0.9m natural gas costs, all of which grew compared with fiscal 2013. Gypsum wallboard and paperboard revenues for the fourth quarter grew by 11% year-on-year to US$106.3m. Wallboard sales volumes were up by 2% year-on-year to 442Mft² and paperboard sales volumes for the quarter grew by 4% year-on-year to 59,000t.

US: Continental Building Products, a manufacturer of gypsum wallboard and complementary finishing products, has announced its results for the first quarter of 2014, which ended on 31 March 2014.

Net sales increased by 4.2% to US$87.0m in the first quarter of 2014, up from US$83.5m for the same period of 2013. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were US$20.2m, unchanged from 2013, operating income was US$6.3m, down from US$10.0m in 2013 and adjusted net loss was US$0.6m, compared to a net income of US$9.8m in 2013. Wallboard sales volumes were flat at 438Mft² due to adverse weather conditions. Lower wallboard sales volumes in Canada offset a 2.2% increase in US sales volumes.

"We achieved strong price gains in the first quarter of 2014 amid flat volumes, which were unfavourably impacted by adverse weather conditions in many of our markets in the eastern US," said Ike Preston, Continental's CEO. "Our adjusted EBITDA was stable compared to a year ago as our improvement in sales was offset primarily by higher energy costs. As we move forward in 2014, we believe the long-term recovery in housing markets remains in place and that we are well positioned to grow our business and leverage our low cost as demand improves."

US: USG Corp has reported a surge in profit for the first quarter of 2014, primarily on increased shipments and higher selling prices.

Chief executive officer James Metcalf said, "Despite the harsh winter conditions across most of the US during the first quarter of 2014, we delivered positive operating results and net income."

USG said that its US gypsum wallboard shipments rose to 1.15Bnft² (107Bnm²) from 1.11Bnft² (103Bnm²), while average wallboard prices climbed to US$166.66/1000ft² from US$153.07/1000ft² in 2013. Net sales for the first quarter of 2014 grew to US$850m, up from US$814m in the corresponding quarter of 2013. USG's first quarter profit surged to US$45m from US$2m.

USA: Continental Building Products, which acquired Lafarge North America's gypsum wallboard assets on 30 August 2013, has announced results for the fourth quarter and fiscal year ending 31 December 2013.

In the fourth quarter of 2013, CBP saw its net sales increase by 30% to US$114m compared to Lafarge's like-for-like performance in the fourth quarter of 2012. Its operating income rose from US$2.8m for the 2012 quarter to US$15.9m and its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) more than doubled to US$29.8m. Net income for the fourth quarter of 2013 was up by 125% year-on-year to US$6.7m. CBP sold 58.7Mm3 of gypsum wallboard during the fourth quarter, a rise of 18% year-on-year.

Over the whole of 2013, which necessarily includes results from Lafarge North America's former gypsum wallboard operations, CBP saw its net sales rise by 29% to US$402m and operating income improve to a profit of U$29.8m compared to a loss of US$45.4m in 2012. Adjusted EBITDA increased by 152% to US$103m for the year, while net income was positive at US$4.9m, compared to a net loss of US$68.7m in 2012.

"The positive momentum in our business continued into the year end, resulting in a net sales increase of 30% during the fourth quarter," said Ike Preston, CEO of CPB. "As we progressed though the year, rising housing starts provided favourable residential construction activity, our repair and remodel end markets improved and commercial orders started to show early signs of a recovery. The improvement in our performance reflects the improved demand environment but is even more reflective of our market-leading positions that we have forged in attractive regions throughout the eastern United States."

"The significant investments that we have made to modernise our capacity allowed us to more than double our adjusted EBITDA in the fourth quarter of 2013," continued Preston. "We believe we are well positioned to continue growing our business as we leverage our existing capacity and low cost production capabilities to support additional profit expansion and cash generation over time."

Australia: Boral has reported that its half year underlying net profit jumped by 73% on the back of improved housing and road construction markets, cost cutting measures and dry weather conditions. The company saw its underlying net profit rise to US$81.5m in the six months to 31 December 2013. However, the company also warned of a slowdown in activity and earnings in the second half of the financial year, which runs until 30 June 2014.

Boral actually recorded a net loss of US$23.6m for the half year but this figure includes US$106m in one-off accounting charges related to its gypsum plasterboard joint venture, due to be completed on 28 February 2014, which it says will be offset by gains in the second half.

Chief executive Mike Kane highlighted a US$20.8m turnaround in the Australian building products division and a 6% lift in its largest division, building materials and cement.

"The rise was driven by strong project activity, very dry weather conditions in New South Wales and Queensland and the benefit of restructuring and overhead cost reduction initiatives," said Kane. "Despite expected underlying performance improvements, there will be a skew of earnings to the first half compared to the second half due to higher major project volumes, dry weather conditions in the first half and the impact of the gypsum joint venture."

The company achieved US$54.7m in cost savings, much of which came from cutting 1000 jobs. Boral plans to use much of a US$453m payment from its gypsum partner USG to reduce its US$1.26bn net debt.