Gypsum industry news

Belarus: The Russian manufacturer of gypsum products VOLMA Corporation plans to acquire AAT Belhips, according to Heorhiy Kuznyatsow, head of the Belorussian State Property Committee. The privatisation of Belhips has been under consideration for three years now and Volma is the only company interested in acquiring it, said Kuznyatsow at a news conference in Minsk.

Belhips is estimated to be worth around Euro3.79m but the buyer would also be required to invest about Euro40m in the construction of a new gypsum plant outside Minsk. A draft presidential edict providing for the privatisation of Belhips is expected to be submitted to the Belorussian Council of Ministers from 25 February 2013.

US: United States Gypsum (USG) has applied for a permit to withdraw up to 2.11 million litres/day of water for a gypsum plant near Crystal River in Florida. However, company spokesman Robert Williams said that the plant is not planned in the immediate future.

USG's permit application is pending with the Southwest Florida Water Management District. The district has sent USG a letter seeking more information to make sure that the planned withdrawals won't cause salt-water intrusion or otherwise harm the groundwater.

In 2011 USG purchased 72 hectares near the Progress Energy Florida power complex north of Crystal River to warehouse synthetic gypsum that is created by scrubbers at the coal-burning plants. Progress, whose parent company is Duke Energy, has a contract to sell the gypsum to USG, which is planning to build a warehouse sometime in 2013 to store the product until it is shipped to a wallboard manufacturer.

"USG proposes to construct a state-of-the art facility that is projected to bring 130 new jobs to the area and will incorporate water conservation to the greatest extent feasible," the company's consultant, Progressive Water Resources, wrote in its application letter to the water district. The letter requests a 20-year permit and states it is still negotiating for easements to the well sites and a pipeline that would transport water from the well to the manufacturing centre.

Australia: Building materials supplier Boral has reported a loss of US$25.1m for the first half of its 2012-2013 fiscal year, due to a sustained weakness in the Australian and US housing markets. It recorded a profit of US$157m in the same period in 2011-2012.

For the half-year ending on 31 December 2012, Boral reported a sales revenue of US$2.86bn, 14% above the previous year. Earnings before interest and tax (EBIT) (before significant items) increased by 3% to US$116m. Both figures benefitted from acquisitions that the company made. Profits were hit by US$79.6m impairment charges tied to the suspension of cement production at Waurn Ponds, Victoria and first half restructuring and redundancy costs.

"In Australia, Construction Materials delivered a solid 25% improvement in EBIT, but Building Products reported a very disappointing US$18.6m first half loss, following an US$11.4m loss in the second half of last year," said Boral's CEO and Managing Director Bob Kane.

He added that in the newly combined Boral Gypsum division, Australian Plasterboard was also significantly impacted by lower volumes and higher operational costs, reporting a 45% decline in EBIT. This decline was offset by a US$19.6m increase in reported earnings from Asia as a result of the acquisition of the remaining 50% interest of Boral Gypsum Asia in the 2012 financial year.

US: The US-based building materials provider Eagle Materials has reported financial results for the third quarter of the 2013 fiscal year, which ended on 31 December 2012. These showed that its revenue was up by 33% compared to the same period of the prior fiscal year. Earnings per share were up by 429% year-on-year.

Eagle's third quarter sales volumes improved across all business lines, with sales prices improving in all but one of it business lines. Its gypsum wallboard segment experienced the most significant improvement, with an increase in average net sales prices of 27% as compared with the same quarter of the prior fiscal year.

Eagle's Gypsum Wallboard and Paperboard division's third quarter operating earnings of US$24.8m were up by 362% compared to the same quarter of the 2012 fiscal year. Higher wallboard average net sales prices, higher gypsum wallboard and gypsum paperboard sales volumes and lower recycled paper input costs were the primary driver of the quarterly earnings increase.

Gypsum wallboard and paperboard revenues for the third quarter were US$100.3m, a 37% increase from the same quarter a year ago. The revenue increase reflects primarily higher wallboard average net sales prices and sales volumes. The average gypsum wallboard net sales price for the third quarter was US$120.55/1000ft2, 27% greater than the same quarter a year ago. Wallboard sales volume for the quarter of 519Mft2 represents a 23% year-on-year.

US: USG Corporation (USG) has reported its results for the fourth quarter of 2012 and for the year as a whole. These results showed that sales had increased by 12% to US$815m in the final quarter of the year, but that USG also made an operating loss of US$8m. This, however, was lower than the US$43m that it lost in the final quarter of 2011. The group's adjusted operating profit was US$5m, versus a US$38m adjusted operating loss in the 2011 quarter, but it made a net loss of US$13m. This compares favourably to the 2011 quarter, when it made a loss of US$100m.

In terms of sales, its US gypsum wallboard shipments came to 1.22Bnft² against 1.09Bnft² in the 2011 quarter. The average price was US$132.26/1000ft² ­up from US$112.59/1000ft² in the same period of 2011. USG also announced that its SHEETROCK Brand UltraLight Panels accounted for 49% of all of its US wallboard shipments for the period.

The Corporation recorded full year 2012 net sales from continuing operations of US$3.2bn, an operating profit from continuing operations of US$73m and a net loss of US$126m. For the full year 2011, net sales from continuing operations were US$2.9bn, the operating loss from continuing operations was US$206m and its net loss was US$390m.

"Our wallboard results were the strongest we have seen in over three years, and we achieved our fourth consecutive quarter of positive adjusted operating profit," said James S Metcalf, Chairman, President and CEO. "The results show that commercial markets remain choppy, but we continue to see signs of a housing recovery."