Gypsum industry news

US: GMS’ net sales from its wallboard products rose by 5% year-on-year to US$1.33bn in the financial year to 30 April 2020 from US$1.27bn in the same period in 2019. Its overall sales grew by 4% to US$3.24bn from US$3.12bn. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased slightly to US$300m. Wallboard sales were stable in the fourth quarter of its reporting year as coronavrius-related market declines in late March and April 2020 caused total company sales to decrease in the period.

“Through mid-March 2020 we experienced favourable end-market trends and generated robust volume growth. Even as disruptions from COVID-19 began to escalate in the second half of March 2020, construction and building products distribution were deemed essential in the majority of our markets, which enabled us to keep most of our locations open. However, demand weakened significantly in late March 2020 and in April 2020 as customers delayed orders and building projects were paused due to mandated shutdowns in certain markets or as they focused on responding to the effects of COVID-19 on their businesses,” said John C Turner, Jr, president and chief executive officer of GMS.

France: Saint-Gobain says that its overall group activity fell to 60% of 2019 levels in April 2020 due to the effects of the coronavirus pandemic. Since then its level of activity surpassed 80% ‘at comparable working days, with large variations by market and country,’ according to Regulatory News Service. The group expects a ‘challenging’ second quarter 2020 before a recovery in the second half of the year. It continues to preserve cash and reduce costs.

In Europe the group reported that, by the end of May 2020, Nordic countries had almost reached 2019 levels. Germany and Eastern Europe were still seeing activity levels below those of 2019. The UK has seen activity levels progress by around 10%/week since a low point in mid-April 2020 when activity were at a ‘virtual standstill’, reaching around 70% of 2019 levels in the last week of May 2020.

In the group’s Middle East & Africa region activity levels surpassed 50% of 2019 levels since a low in mid-April 2020. In France, activity in distribution came close to the 2019 level in the last week of May 2020, but with big differences by region and brand. Spain and Italy are picking up gradually, but remain below the average level of the region. The Netherlands remains close to a normal level of activity, while the Middle East and Africa remain impacted to varying degrees.

North America has reported a ‘contrasting situation state by state,’ but has shown improvement since the low point of mid-April 2020. Activity in May 2020 moved closer to 2019 levels due to ‘significant’ volumes in exterior solutions and a rebound in gypsum volumes. In Latin America, despite the health situation remaining difficult, activity is picking up week after week, from 40% in mid-April 2020 to around 80% in May 2020 with a ramp-up in Brazil.

In Asia-Pacific sales have now reached 2019 levels following the gradual restart of all its production sites in China in March 2020. India remains ‘severely’ disrupted with the restart dependent on the relaxing of confinement measures. The situation is varied across South-East Asia with a rebound in Vietnam where activity has surpassed 2019 levels, but disruptions still relatively significant in Thailand and neighbouring countries.

US: Gypsum wallboard distributor Foundation Building Materials reports that sales of wallboard fell slightly to US$202m in the first quarter of 2020. This was attributed to disruption caused by the coronavirus outbreak. Overall its sales across all business lines rose, in part due to an additional business day in the reporting quarter compared to the same period in 2019. It noted lower sales growth in states with stronger lockdown measures, including Washington, California, Michigan, New Jersey and Pennsylvania. Overall sales in April 2020 were reported as being 20% down year-on-year.

France: Saint-Gobain’s sales in the first quarter of 2020 fell by 9.8% year-on-year, to Euro9.36bn from Euro10.4bn. Sales fell in all regions except the Americas, where they rose by 4.8% to Euro1.37bn from Euro1.31bn. The company said that coronavirus decreased demand in Asian and the Pacific in February 2020 and Southern Europe, the Middle East and Africa in March 2020. Northern European sales were only affected in the UK in the last week of March 2020. The company predicted that demand would increase globally in the second quarter of 2020 given that construction has been deemed an essential industry in most countries.

Belgium: Etex’s net profit was Euro176m in 2019, a rise of 26% year-on-year from Euro140m in 2019. Sales crept up by 1.5% to Euro2.94bn from Euro2.90bn. Etex chief executive officer (CEO) Paul Van Oyen called 2019 an ‘outstanding year’ in which Etex ‘significantly increased its plasterboard volumes, driven by a strong market in several countries’ and reduced its debt by 43% to Euro331m, its lowest level since 2011. This was thanks to the sale of its UK and Portuguese tile roofing businesses.

Van Oyen’s announcement was overshadowed by the current circumstances surrounding the COVID-19 outbreak. “Today, my thoughts mainly go to all of our colleagues and their families worldwide, especially the ones who have been infected with the coronavirus,” he said. “Etex will not change its identity as a result of this crisis: our priority is and will always be the health and safety of our colleagues and stakeholders worldwide. We are determined keeping our business running, and to continue to Inspire ways of living.” Van Oyen also paid his respects to those within the company who have died of coronavirus.

China: Beijing National Building Materials (BNBM) recorded a net profit of US$62.3m in 2019, down by 82% year-on-year from US$348m, ‘mainly caused by settlement fees.’ Its profit after deduction of non-recurring profit and loss was US$335m, down by 7.0% from US$359m in 2018. Its revenue rose by 6.0% to US1.88bn from US$1.77bn.

BNBM’s gypsum wallboard sales volumes were 1.97Bnm², up by 5.2% year-on-year from 1.87Bnm². This corresponds to a 2019 Chinese market share by volume of 59%.

US: GMS has reported a net profit over the three months to 31 January 2020, the third quarter of its 2020 fiscal year, of US$10.9m, up by 87% from US$5.83m in the corresponding quarter of its 2019 fiscal year. Its net sales over the period rose by 5.2% year-on-year to US$761m from US$724m. The company’s gypsum wallboard sales reached US$314m, up by 5.7% from US$297m in the third quarter of the 2019 fiscal year.

France: Saint-Gobain’s net profit in 2019 was Euro1.45bn, up by 207% year-on-year from Euro474m in 2018. Its net sales were Euro42.6bn, up by 1.9% from Euro41.8bn in 2018. Saint-Gobain chairman CEO Pierre-André de Chalendar praised the year’s performance in spite of a ‘less supportive market environment in the second half.’ He said, “For 2020, in a more uncertain market environment, Saint-Gobain should continue to benefit from its attractive positioning and from the results of its ‘Transform & Grow’ initiative, and is targeting a further like-for-like increase in operating income with an uncertainty about the impact of the coronavirus.”

Australia: Boral has seen a 40% decrease in its profit during the first half of its fiscal year a period that ended on 31 December 2019. Its profit fell to US$90.4m for the period from US$151m a year earlier. Boral said that this was due to higher costs and weak housing activity in Australia and South Korea. It was also affected by the costs of transactions between its USG-Boral joint-venture partner USG and Knauf, which bought USG in 2019, along with its interest in USG-Boral.

Germany: Wacker has reported a fall of 16% year-on-year in its earnings before interest, taxes, depreciation and amortisation (EBITDA) to Euro780m in 2019 from Euro 930m in 2018. Wacker Group CEO Rudolf Staudigl said, “Our earnings last year were strongly influenced by non-recurring effects from insurance compensation received and from the impairment charge on fixed assets. We are currently working on a comprehensive program to make Wacker more efficient and capable, and to achieve substantial cost savings.” He indicated that the group would set out specific targets in early-2020.