Insulation industry news from Global Insulation

US: Owens Corning (OC) has reported that its consolidated net sales increased by 9% to US$1.35bn in the first quarter of 2012, compared with US$1.24bn in the same period of 2011. Its first quarter adjusted earnings, (based on the company's expected full-year effective tax rate of 25%), were US$11m compared with US$27m in the same period of 2011. OC reported a net loss of US$46m compared with net earnings of US$24m in the first quarter of 2011.

"OC delivered results in line with our expectations for the quarter," said chairman and CEO Mike Thaman. "We continue to be confident that we will grow our adjusted earnings before interest and tax (EBIT) in 2012."

Although there continues to be uncertainty in the macro-economic outlook, OC expects to grow adjusted EBIT in 2012 based on an improving US housing market and continued growth in global industrial production.The company said that, despite weakness in the European glass fibre reinforcements market, it believes that global glass reinforcements demand will continue to grow in 2012.

Meanwhile depreciation and amortisation expenses are expected to be as much as US$320m in 2012, excluding the impact of the restructuring actions in Europe. OC expects its capital expenditure to be about US$350m in 2012.

The company also announced that its board of directors has authorised the company to repurchase up to 10 million additional shares of its outstanding common stock. Under a previously announced share repurchase programme, 3.7 million shares continue to be available for repurchase.

UK: Roofing and insulation materials supplier SIG has returned to profit but it warned that its UK business is beginning to feel the bite of government austerity cuts.

The Sheffield-based group reported pre-tax profits of Euro9m in the year to 31 December 2011, compared to losses of Euro97m in 2010, as it outperformed its markets and benefited from restructuring. In the UK and Ireland, sales increased by 3.6% despite it reducing branch numbers by 34 to 330, as trade was boosted by a slight increase in its residential markets and by strong commercial demand in the south east of England.

Despite a return to profit, SIG warned that a reduction in public sector demand towards the end of the year will be more pronounced in 2012. The group sold three of its UK businesses in June 2011 as part of its plan to focus on its core markets of insulation and energy management, interiors and exteriors.

Underlying profits across the group were up by 27% to Euro98m. Revenues rose by 7.1% to Euro3.2bn, driven by a strong performance in mainland Europe, which accounts for more than half of SIG's business. Sales growth across the group has slowed to 1% in the first weeks of 2012 and it says it expects its overall markets to contract 2012 although it will continue to gain market share.

The group recently announced it is to close more of its stores, including 15 in the UK and Ireland, as part of plans to save Euro6m. It will also continue to open new sites, mainly under the Builders Express format in London and the south east having opened four over the past year.

Denmark: The Board of Rockwool International A/S has approved the company's annual report for 2011. The report shows that the group's sales increased by 17.2% to Euro1.85bn. Rockwool's profit after minority interests increased by 25% and came to Euro86m, with investments at Euro161m. In 2012 sales are expected to increase by 5% with profit after minority interests of more than Euro80m. Investments excluding acquisitions is expected to be around Euro188m.

"Despite the turbulent state of the world economy in 2011, the year produced many positive developments in the Rockwool Group," wrote Rockwool's CEO Eelco van Heel in the report. "We managed to grow sales by 17% and, even though there was strong pressure on raw material prices, we also maintained our profitability at more or less the same level as the previous year."

Van Heel added that Rockwool had been less adversely affected than other areas of the construction industry because European countries such as France and Germany are looking to increase efficiency during times of economic hardship. He also noted that Rockwool had been expanding its activities outside of Europe and had grown its 'Systems' business.

Rockwool's insulation business, representing 82% of its net sales showed a solid growth trend throughout 2011. Sales grew by 20% although customers resisted price increases at the start of the year. The increase was predominantly driven by the renovation market, especially in Europe and North America. Sales in Russia were up by 45% year-on-year. Rockwool met this demand with imports from its Polish facilities.

In the US, Rockwool completed an important agreement with the home-improvement chain Lowe's. This has given access to more than 200 stores in north-eastern US, helping Rockwool make the most of this challenging market.

UK: Superglass Holdings plc, an independent UK manufacturer of glass wool mineral fibre insulation products, has announced that sales in the first half of its fiscal year, which ended 29 February 2012, were significantly ahead of the first half of the preceding fiscal year. Despite the improvement the results were still behind the company's own forecast. The company said that it expects the second half of the fiscal year to be significantly better than the first half, with increased volumes, increased selling prices and the benefits of sales specification activity taking effect.

Superglass said that financial difficulties prior to its successful recapitalisation impacted trading adversely during the period under review, but that a shortfall in sales has been partially mitigated by lower costs. The board reviewed the progress achieved in the three months since the recapitalisation as 'satisfactory.'

On 21 February 2012 Superglass announced that its Finance Director, Tony Kirkbright, had resigned with immediate effect following the company's successful recapitalisation. The company board has started the process of recruiting his replacement. In the meantime David Wilton has been appointed as a consultant. He will report to board on the financial affairs of Superglass on an interim basis.

The company also said that it was still too early to assess the real impact of the transition the UK's new environmental policy, the Green Deal, which takes effect at the beginning of 2013.

France: Saint-Gobain has posted a net income of Euro1.3bn for 2011, a rise of 14% from Euro1.1bn in 2010. The group has attributed this to strong demand for its building materials in emerging markets combined with its ability to pass higher raw material costs to customers in the form of higher prices.

Recurring net income spiked to Euro1.7bn in 2011, a 30% rise from Euro1.3bn in 2010. Operating income rose to Euro3.4bn, a 10% rise compared to Euro3.1bn. Group sales increased to Euro42bn, a 5% rise from Euro40bn.

"We managed to limit the impact of the strong increase of raw material and energy thanks to the increase of the prices of our products," said chief executive Pierre-Andre de Chalendar.

De Chalendar added that he expects a moderated growth of revenues in 2012 as the company intends to continue transferring higher costs to its products' prices. He declined to give specific data, though he said the growth will be slower than the 5% in 2011.

In its Interior Solutions division (which includes insulation) the group recorded sales of Euro5.5bn for 2011, a rise of 6.1% from Euro5.2bn in 2010. Operating income met Euro450m in 2011, a rise of 19% from Euro380m. Notably capital expenditure increased to Euro330m, a rise of 70% from Euro190m. Overall the group doubled investment spending for 2011, in energy efficiency and energy markets, to almost Euro900m.

Sales volumes for Interior Solutions were up in all geographic areas, particularly in the US, Asia and emerging countries. In Western Europe and especially France, trading continued to be buoyed by stricter energy performance regulations.

Saint-Gobain's CEO has announced an ambitious expansion plan to boost total revenues to Euro55bn and net profit to Euro3bn by 2015, through acquisitions and organic growth. The company said the plan to spin off its unit Verallia is still being considered, but market conditions are not favourable in the short term.

US: Owens Corning (OC) has swung to a fourth-quarter profit due to prior-year acquisition-related costs as the company continued to see stronger sales in its building materials. OC saw sales improve for its roofing and insulation materials in 2011 despite the ongoing slump in the US housing market. A focus on costs has helped support its bottom line.

OC reported a profit of US$50m for the fourth quarter of 2011 from a year-earlier loss of US$110m. The year-earlier period included a net US$135m in asset-sales losses and acquisition and restructuring-related charges. Its revenue increased by 2.4% to US$1.2bn and its gross margin rose to 19.2% from 17.1%. The building materials segment, OC's biggest area, reported net sales growth of 8%, including an increase of 8.7% in insulation sales.

Chairman and Chief Executive Mike Thaman said that OC anticipates improved US housing starts and modest growth in the global economy in 2012. The company expects that a strong performance in its building materials business will more than offset impacts of near-term market challenges in its composites business.

Denmark: The major Danish insulation producer Rockwool has announced better-than-expected results for the fourth quarter of 2011. Based on the registered level of sales in 2011, Rockwool expects its sales to have increased by 17% over those of 2010. It expects that its profit after tax and minority interests will come in above Euro80m. In its third quarter report, the Rockwool Group had expected a sales increase of 15% for the full year 2011 compared to 2010 and a profit after tax and minority interests of approximately Euro74m.

The healthy sales trend in Rockwool products continued in the final quarter of 2011, which it says was due to the mild winter weather in Europe combined with strong underlying demand in core markets. Despite the challenging macro-economic environment (especially in Europe) and the rather low visibility, the Rockwool Group expects continued growth in 2012. The Group expects sales to increase by approximately 5% in 2012. It expects its profit after tax and minority interests to be kept at the 2011 level, above Euro80m.

Denmark: Rockwool has reported a 40% increase in third-quarter net profit, helped by a recovery in demand in key European markets, higher sales prices and lower input prices. The group confirmed its nine-month report for 2011 that it still expects sales to increase by 15% for the full year with a net profit of around Euro74m.

For the third quarter of 2011 net sales rose year-on-year by 20% to Euro488m from Euro406m in 2010. This was helped by the inclusion of a recent acquisition and recovery of demand in some of its European key insulation materials markets. Profit rose by 40% year-on-year to Euro26m in 2011 from Euro18m in 2010. For the year to date there was a similar rise in sales of 17% compared to 2010 but a smaller increase in profit at only 10%.

The company said it expects the positive sales development observed during the first nine months of 2011 to continue in the coming quarters and that a downwards curve in raw material prices will continue and start to positively impact margins in the fourth quarter.

US: Owens Corning (OC), has announced today that its third-quarter profit for 2011 has more than doubled. The company attributed the increase to a jump in sales. The Toledo, Ohio company said it posted a profit attributable to common shareholders of USD124m USD1.01/share), up from USD58m from the same quarter of 2010.

Revenue rose by 22% to USD1.45bn from USD1.19bn in 2010, as sales at both the company's insulation and roofing business both rose.

The company said that, based on its current projections, it expects to post its second-consecutive year of adjusted earnings per share growth of nearly 40%.

Russia: The net 2011 first-half profit of OJSC Balakovorezinotekhnika, which makes a number of plastic-derived technical goods including vibration-dampening insulation and pipe-lagging was USD2.3m against a loss of USD3.52m for the same period of 2010. Its revenue increased by 43% to USD98.4m from USD68.8m and its profit due to sales was USD1.77m against a sales loss of USD1.96m in the first half of 2010.