Gypsum industry news

US: USG Corporation has reduced its net loss in the third quarter of 2012 by US$86m, to US$29m from US$115 in the same quarter in 2011.

In August 2012 USG announced it had entered into an agreement to sell its European operations to Knauf. Results from European operations have been reported as discontinued operations for the 2012 and 2011 periods.

The corporation reported a year-on-year rise in its net sales from continuous operations of 9% in the third quarter of 2012, to US$828m from US$763m. Its operating profit from continuing operations for the third quarter of 2012 was US$29m compared to a US$79m operating loss in 2011.

Discontinued or European operations reported net sales of US$27m in the third quarter of 2012 compared to US$29m in 2011. Discontinued operating profit was US$1m in 2012 compared to US$3m.

"The announced sale of our European operations is another great example of USG's Plan to Win. Completion of this sale will allow us to reallocate assets from a lower-growth market to joint ventures supporting higher-growth markets in India, which will allow us to diversify the company's earnings and offset some of the cyclicality in our core businesses," said, president and CEO, James S Metcalf, Chairman. Metcalf added that wallboard demand remains 'significantly' below previous levels.

USG wallboard shipments rose by 14% year-on-year in the third quarter of 2012, to 366Mm² from 320Mm² in 2011. Sheetrock brand UltraLight panels accounted for 47% of all USG wallboard shipments in the United States.

Australia: Boral has reported a 59% fall in second-half profit, hit by weak housing construction in Australia and delays in big resource and road projects. Boral, which removed its chief executive in May 2012, declined to give a fiscal forecast for the year ahead in light of uncertain market conditions, but said it would update investors at its annual meeting in November 2012.

Boral's net profit for the six months to June 2012 fell to US$35.7m from US$87m a year earlier, as calculated from full year figures. The building products maker issued profit warnings in April 2012 and June 2012.

"Earnings from our Australian business in the six months to June were hit by very weak housing and non-residential building activity, combined with delays and disruption from sustained rainfall across the east coast. The positive impact of price increases was more than offset by much weaker sales volumes in these markets and by higher costs, including from the wet weather," said Boral's chief executive officer, Ross Batstone.

Overall for the year to 30 June 2012 profit, after tax dropped by 42% to US$106m from US$183m. Sales revenue grew by 5%, to US$5.24bn from US$4.94bn, but this excludes the impact of the acquisition of Lafarge's 50% of Boral's stake in their Asian plasterboard joint-venture.

Boral's Building Products division reported a 11% fall in revenue for wallboard, to US$368m from US$413m. Sales volumes declined year-on-year by 14%. Overall for the division earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 46% to US$74.2m from US$138m. The company attributed the decline to the fall in Australian housing which began in year to 30 June 2011 but fell rapidly again in the second half of the 2012 fiscal year, and wet weather. Price increases, which averaged around 2-3% were insufficient to offset the significant impact of lower volumes.

Plasterboard Asia reported a revenue of US$317m since 9 December 2011, when Boral acquired the rest of the joint-venture from Lafarge. Revenues in Indonesia, Thailand and South Korea grew whilst income was below expectations in China, due to a slow-down in construction activity there.

Wallboard capacity increased throughout the year in China with the acquisition of a 35MM² plant in Shandong and on-going upgrade work increasing capacity from 13MM² to 43MM² in Chongqing. In Indonesia a 30MM² capacity upgrade is currently scheduled in completion for early 2013 and in Vietnam, a 30MM² upgrade in Ho Chi Minh City plant is progessing in line with expectations but with no given completion date.

For its 2013 outlook Boral expects continued weak housing demand, particularly for the first half of the 2013 fiscal year, to prove challenging for its Building Products division. It added that further interest rate reductions and/or improved consumer 'sentiment' are required for demand to lift in the six months ending June 2013. In Asia, continued growth in construction activity is expected together with more penetration by wallboard. While the residential market remains subdued in China, Boral's plant in Shandong will see growth of sales volumes in new high-end markets in Beijing, Tianjing and Shandong.

US: Eagle Materials Inc has reported a 29% rise in total revenue for the first quarter of the 2013 fiscal year which ended on 30 June 2012. The North American building materials producer noted revenue of US$154m for the quarter, up from US$120m in the same period in 2011.

Eagle's gypsum wallboard sector reported a 36% increase in revenue to US$70.2m from US$51.3 in 2011. Improved wallboard net sales prices were the primary driver of the quarterly earnings increase in the company's gypsum wallboard and paperboard division. Sales volumes increased by 11% to 42.5MM² from 38.3MM².

Uzbekistan: Dry gypsum mixture producer Bukharagips JV OJSC has released its financial results for the 2011 calendar year, which show a net loss of US$1.0m in 2011 against a loss of US$0.3m in 2010.

The company decreased production of construction-grade gypsum by 39.6% from 14,027t in 2010 to 11,373t in 2011. The enterprise increased production of crushed stone gypsum by 8.2% to 208,180t. Production of dry construction mixtures rose by 156.3% from 5240t in 2010 to 13,428t in 2011.

The company's net revenue came to US$3.7m in 2011 against US$2.6m in 2010. Its expenses grew from US$1.8m in 2010 to US$2.92m in 2011.

Saudi Arabia: National Gypsum Company has announced interim financial results for the period ending 30 June 2012. These show a net income for the second quarter of 2012 of US$1.76m compared to US$2.7m in the same period of 2011, a year-on-year drop of over a third. There was also a sharp drop compared to the first quarter of 2012, when the company had a net income of US$2.50m. National Gypsum's gross profit for the second quarter of 2012 came in at US$2.26m compared to US$3.39m for the same quarter of 2011, a near-30% fall.

Over the course of the six months to 30 June 2012, the company said that it made a net profit of US$4.26m, compared to US$5.6m in the six months to 30 June 2011. Its gross profit for the six months came in at US$4.65m compared to US$6.73m a year earlier, another drop of more than 30%.

National Cement said that the reason for the drop in its performance was increased competition.

Spain: Uralita SA has released financial results for the 2011 calendar year, which show a net loss of Euro27.1m. The gypsum wallboard and insulation materials producer also saw sales drop to Euro676m from Euro683m year-on-year, with earnings before interest, tax, depreciation and amortisation down by 65% from Euro78.9m in 2010 to just Euro26.9m. The group's revenue was also down marginally, to Euro690.8m, a drop of just 0.2%.

The Spanish construction market remains in the doldrums amid the continued Eurozone debt crisis, drastically reducing demand for gypsum, insulation and the other building materials that Uralita produces. Uralita SA has released financial results for the 2011 calendar year, which show a net loss of Euro27.1m. The gypsum wallboard and insulation materials producer also saw sales drop to Euro676m from Euro683m year-on-year, with earnings before interest, tax, depreciation and amortisation down from by 65% from Euro78.9m in 2010 to just Euro26.9m. The group's revenue was also down marginally, to Euro690.8m, a drop of just 0.2%.

The Spanish construction market remains in the doldrums amid the continued Eurozone debt crisis, drastically reducing demand for gypsum, insulation and the other building materials that Uralita produces.

US: Eagle Materials Inc. has reported its financial results for the 2012 fiscal year and the fiscal fourth quarter that ended on 31 March 2012. Its results showed that the group's revenue was up by 7% for the fiscal year, to US$495m, and cash flow from operations was US$60.2m, up by 37%. In the quarter ending 31 March 2012, the company netted revenues of US$116.8m, a 22% year-on-year increase.

Eagle said that its low cost operations continued to execute well during the 2012 fiscal year and that it was beginning to see improving construction activity across most of its markets. Eagle's earnings began to improve during the second half of fiscal 2012 and accelerated during the fourth quarter.

The group's Gypsum Wallboard and Paperboard division saw an operational income of US$23.3m, an massive increase of 74% compared to the 2011 fiscal year. Revenues from Gypsum Wallboard and Paperboard were US$295.9m for the 2012 fiscal year, 9% higher than that seen in 2011.

The Gypsum Wallboard and Paperboard division reported fourth quarter operating earnings of US$15.1m compared to an operating loss of US$0.4m in the same quarter of the 2011 fiscal year. The increase in operating earnings was primarily due to higher net wallboard sales prices and increased paperboard sales volumes offset by lower wallboard sales volumes.

Gypsum Wallboard and Paperboard revenues for the fourth quarter totalled US$79.9m, a 23% increase from the same quarter in 2011. The average gypsum wallboard net sales price for this quarter was US$118.86/MSF, 39% greater than the same quarter in 2011. Gypsum wallboard sales volumes of 397MMSF were down by approximately 7% from the fourth quarter of the 2011 fiscal year.

US: USG Corporation has reported a net sales increase of 13% in the first quarter of 2012 whilst decreasing its overall net loss. The building materials manufacturer made net sales of US$812m in the three months ending on 31 March 2012 compared to US$721m in the same period in 2011. Operating profit rose from a loss of US$58m in 2011 to a gain of US$27m. However, the company remains in net loss after tax, reducing its loss from US$105m in 2011 to US$27m in 2012.

"Despite continuing low demand our emphasis on achieving operating profit is succeeding and continues to be a top priority," said James S Metcalf, Chairman, President and CEO. "Our focus on our customers, innovation and growing our adjacent businesses contributed to our first quarter results. All units showed improved results, supported by a modest increase in US wallboard demand and solid performance across our product lines including ceilings, substrates and joint compounds."

Of USG's gypsum assets its subsidiary the US Gypsum Company registered the strongest turnaround in the first quarter improving sales by 20% from US$318m in 2011 to US$381m in 2012. Operating profit rose from a loss of US$29m in 2011 to a gain of US$29m in 2012.

"Although demand in our core markets still remains near historical lows, we are confident our strategy will continue to move us toward positive net earnings," said Metcalf.

US: Gypsum wallboard imports in the fourth quarter of 2011 were 72,000t, equivalent to 8MM², a rise of 15% compared to the third quarter of 2011 and 37% year-on-year. Mexico accounted for 59% of these imports, followed by Canada with 41%. The figures were released in the latest gypsum publication from the United States Geological Survey (USGS).

Producers mined 2.18Mt of gypsum during the fourth quarter of 2011, a rise of 8% year-on-year. Synthetic gypsum production was 1.77Mt , a rise of 4% year-on-year. Synthetic gypsum accounted for about 37% of the 4.81Mt total supply of gypsum in the US during the quarter. Sales of calcined gypsum were 2.93Mt, a rise of 8% year-on-year. Sales of board products were 3.73Mt, equivalent to approximately 416MM², a rise of 4% compared to the third quarter of 2011 and a rise of 14% year-on-year. Imports of crude gypsum were 864,000t, a rise of 12% from the third quarter of 2011. The US imported crude gypsum from 10 countries in the fourth quarter of 2011 with Mexico accounted for 40% followed by Canada with 38%, and Spain with 22%.

Wallboard exports were 212,000t, equivalent to 23.6MM², a rise of 6% compared to the third quarter of 2011 and a rise of 18% year-on-year. Wallboard was principally exported to Canada with accounted for 93% of the total.

Belgium: Etex Group has reported a revenue rise of 17.6%, from Euro1.96bn in 2010 to Euro 2.3bn in 2011. In 2011 the Belgium-based manufacturing group acquired major gypsum interests from Lafarge and had a former manager jailed in a major Italian asbestos trial.

Etex acquired 80% of the European and South American gypsum activities of Lafarge in November 2011, increasing its controlling interest to 80% in its South American gypsum business. On a like-for-like basis its revenue increased by 10.3%. The newly acquired gypsum activities added a further 7.3% to the revenue increase from 2010. The Group's operating income decreased by 4.9% to Euro176m in 2011, from Euro185m in 2010. Profit decreased by 29% to Euro88m from Euro 124m.

In its annual report the Group attributed the fall in operating income to the setup of a provision in response to the outcome of the Italian Eternit asbestos trial in February 2011. Etex was judged civilly responsible for the actions of one of its former top managers. Damages from the case were over Euro100m.