Insulation industry news from Global Insulation

US: Chemical maker Huntsman Corp has seen revenue from its polyurethane division rise by 10% to US$4.89bn in 2012 from US$4.43bn in 2011. The company attributed this to higher sales of the foam insulation constituent. The polyurethane division also benefitted from increased prices, although this was partly offset by the strength of the US Dollar against the Euro.

Overall revenue stayed stable at US$11.2bn in 2012 compared to US$11.2bn in 2011. Gross profit rose by 11% to US$2.03bn from US$1.84bn. Adjusted earnings before non-recurring items, depreciation and amortisation (EBITDA) rose by 15% to US$1.40bn from US$1.21bn.

"Our 2012 adjusted EBITDA of US$1.40bn represents record earnings for our current configuration of businesses. I am very enthusiastic about the direction in which the company is headed. Within our largest division, Polyurethanes, our MDI business is growing at attractive rates and future prospects are pointing towards tighter market conditions," commented president and CEO Peter R Huntsman.

UK: Superglass Holdings plc, a Stirling, Scotland-based manufacturer of glass fibre insulation, has reported in an interim management statement covering 1 September 2012 to 14 January 2013 that the first phase of Project Phoenix, its capital investment programme, remains on budget and is on track for completion during the first half of 2013.

Estimated annualised cost savings from the programme have increased from Euro4.33m to Euro6.02m, with the first full year of savings expected in 2013-2014. The increase in savings is mainly due to the installation of new fiberising technology. One of the company's newly installed production lines is now running at full capacity and the second line scheduled to be upgraded in the spring of 2013. However, upgrading each line will incur 'significant' costs as a result of six weeks production downtime.

Sales volumes for the period have been steady but a stronger than anticipated demand for volume commodity products has had a negative impact on average sales prices. Overall market conditions are also affecting prices. Input costs have remained under pressure, particular as energy costs continue to rise.

Superglass remains cautious about the UK Green Deal and it continues to work on broadening its routes to market. Volumes are likely to reduce with potentially slow start-up of the Green Deal scheme.

US: Owens Corning has reported a drop in its third quarter profit due to lower demand for roofing and composites. The insulation construction and industrial-materials company published consolidated net sales of US$1.28bn for the third quarter of 2012, compared with US$1.45bn during the same period in 2011.

Third-quarter 2012 adjusted earnings, based on the company's expected full-year effective tax rate of 25%, were US$39m compared with US$110m in the third quarter of 2011. The company reported net earnings of US$44m compared with net earnings of US$124m.

"We are disappointed in our third-quarter financial results," said chairman and chief executive officer Mike Thaman. "Despite these results, we are proud that our insulation business achieved profitability in the quarter for the first time in four years, in an improving US construction market. Roofing and Composites are experiencing challenging market conditions in the second half. We continue to focus on actions that will position these businesses for near-term improvement."

The construction and industrial-materials company warned investors earlier in October 2012 that weaker demand for roofing in the US and lower industrial production, particularly in Europe, hurt its revenue. It trimmed its full-year forecast. Owens Corning still expects adjusted earnings before interest and taxes between US$280m and US$310m for the full year of 2012.

Denmark: Rockwool International has released its first half financial results for 2012, which show a generally improving picture. The group generated sales in the first half of 2012 of Euro919.9m, corresponding to an increase of 9% compared to same period of 2011. External sales in the group's insulation segment increased by 9% to Euro758.1m. Part of Rockwool's improved financial picture is due to an increase in the number of plants it operates. In the first six months of 2011 it opened a production facility in Russia and increased activity in India, North America and elsewhere.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the group reached US$126.7m and earnings before interest and tax (EBIT) came to Euro57.7m, an increase of Euro18.2m (EBIT) compared to the same period of 2011. In the first half of 2012, the insulation segment EBIT came to Euro40.0m, an increase of 87% year-on-year.

In the western European insulation market, Rockwool reported that the good trading conditions observed in France and Germany since 2011 had continued for the group during the second quarter of 2012, offsetting the negative trends seen in countries like Spain, the UK and the Netherlands, in which it is experiencing increasingly difficult market conditions. In eastern Europe, Poland has continued its strong recovery, whereas Russia is seen by Rockwool to be levelling out, albeit with a small increase in sales compared to the first half of 2011.

Sales in North America continued to develop well. In Asia, and particularly in China, demand for non-combustible insulation material is increasing and is likely to be even stronger when new Chinese regulations regarding fire safety in buildings come into force.

Sales prices have continued to increase during the second quarter of 2012, however at a lower level than during the first quarter and with large differences between markets. The inflation on most raw materials was still high for this period although Rockwool started to benefit from lower foundry coke prices deriving from more reasonable coking coal prices.

Looking ahead to the remainder of 2012, Rockwool expects the general slowdown of the western European economy and the Euro crisis to have further negative effects on the new-built insulation markets, although refurbishment is expected to be resilient. In eastern Europe including Russia, Rockwool expects insulation markets to show robust double-digit growth. The very positive sales development in North America is expected to continue, well supported by better market conditions. In Asia, its sales development will be limited by the as-yet unsolved logistical challenges of importing products from Europe. Overall, the group expects its net sales at current exchange rates to increase by at least 5% for the full year 2012.

Despite the slowdown of the world economy Rockwool says that it expects a continuation of inflationary pressures in 2012 and it will maintain its focus on increasing sales prices and cost-control. It forecasts a net profit for the whole of 2012 in the region of Euro87.3-93.8m.

Ireland: Kingspan, the insulation and building energy specialists, has reported a 19% increase in trading profits for the first half of 2012. The company made Euro52.7m in 2012 compared to Euro44.2m in the same period in 2011. Revenue remained stable rising by 3%, to Euro757m from Euro736m, but this represented a decrease of 1% on a constant currency basis. Earnings before interest, tax and amortisation rose by 13% to Euro71.9m from Euro63.5m.

By segment both the group's insulated panels and insulation boards businesses revenues remained stable at Euro361.1m and Euro232.1m respectively for the first half of 2012. By region the company's Irish revenue fell by 9.4%, to Euro32.8m from Euro36.2m. Revenue in the UK and the rest of Europe remained stable at Euro303.9m and Euro259.7m respectively despite volumes falling. Revenue in the Americas increased by 10.7% to Euro110.7m and in Australasia it increased by 52% to Euro50.3m.

In its business review the company explained that western Europe was 'hamstrung' by an unusually weak construction environment in the Netherlands, owing in the main to sentiment driven weakness in the residential sector. Germany performed well, as did the core central European markets but sales declined in Russia and Turkey.

"The trading environment across many of our geographies continues to be very uncertain, which is having a moderating impact, albeit with Kingspan continuing to outperform the general markets in which we operate," said chief executive of Kingspan, Gene Murtagh.

US: Owens Corning (OC) has reported that its net income sank by half in the second quarter of 2012, as the construction and industrial-materials maker's sales softened and expenses rose. OC reported a net income of US$39m for the three months ending on 30 June 2012 compared to US$78m for the same period in 2011. Revenue fell by 4% to US$1.39bn from US$1.45bn.

OC's management has said that it no longer expects that its adjusted earnings before interest and taxes will grow in 2012, citing a weaker outlook for its roofing segment. However, the company anticipates that its profits will improve in the second half of 2012 versus the first six months of 2012. OC's operating expenses climbed by about 7% to US$154m. Higher asphalt costs ate into the company's roofing unit's profits, management noted.

Looking ahead, OC anticipates US homebuilders will break ground in 2012 on between 700,000 to 750,000 homes. On the basis of that outlook, the company expects its insulation segment will significantly narrow its losses in 2012.

UK: Superglass Holdings plc, a Stirling-based manufacturer of glass fibre insulation solutions, has announced that its performance in the second half of the year ending 31 August 2012 will be below its first half performance due to extremely challenging market conditions. The company also reported the appointment of Allan Clow as its new finance director.

According to a trading statement, business in the second half period has been disappointing and demand in the market is subdued. Sales through CERT (Carbon Emission Reduction Target) related activity have been particularly disappointing. Net sales in the second half of the current financial year are lower than anticipated in the interim report as reported in April 2012 and will be below the level reported for the first half of the year ending 31 August 2012. Average daily sales tonnages have declined since a relatively strong performance in March 2012. Financial performance has also been adversely affected by a short-term increase in overhead costs incurred as a result of the turnaround process.

Meanwhile, cost reduction at the company remains focused on Project Phoenix, a capital investment programme that was central to the refinancing completed in December 2011.

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.

Denmark: Rockwool has increased its 2012 net profit forecast to US$109-118m compared with its previous guidance of 'above US$100m.' The company reiterated its forecast of full-year sales growth of 5% in 2012 but warned that it expects continued tough conditions in the Eurozone.

The insulation giant said that it expects some recovery in its profit margins, helped by price increases and an anticipated easing in inflationary pressures.

In the first quarter of 2012, the company's net profit rose to US$17.4m from US$11.5m in the first quarter of 2011, while earnings before interest and taxes (EBIT) rose by 48% to US$26m. Rockwool's sales rose by 11% in the quarter to US$4.1bn, driven by increased demand in some of its key European markets.

UK: Superglass Holdings, which makes glass fibre insulation, has reported that it made a pre-tax profit for the half year that ended on 29 February 2012. It added that market conditions remain difficult and that there is uncertainty over how the UK government's Green Deal environmental policy will operate.

Revenue for the half year rose year-on-year to Euo21.1m from Euro18.4m in the same half year in 2011, an increase of 14%. Pre-tax profit rose to Euro9.92m from a loss of Euro2.7m. Tight control continues to be exercised over costs and working capital.