Volume 43, Issue 4 - April 2008
USG Only Online
PPG Surpasses Last Year’s
Pittsburgh-based PPG Industries reported record sales of $2.9 billion for the fourth quarter 2007, surpassing the prior year’s fourth quarter results by 15 percent. Fourth quarter net income was $200 million, or $1.21 per share, compared to 2006’s net income of $157 million. The company reports that its fourth quarter earnings per share from continuing operations represent a 30-percent increase over the prior year’s quarter.
This quarter’s reported net income from continuing operations does include an aftertax charge of $1 million, or 1 cent per share, which reflects the net increase in the current value of the company’s obligation under a proposed asbestos settlement agreement still subject to pending court proceedings. Adjusted net income from continuing operations was $194 million, or $1.18 per share. “Our strong fourth quarter results capped one of the best annual financial performances in the company’s history,” says Charles E. Bunch, chairman and chief executive officer of PPG. “We achieved over 5 percent volume growth in the quarter, marking our best quarterly performance in three years despite a slowing economy, and each of our business segments increased sales for the quarter by at least 10 percent over the prior year.”
Bunch attributed the significant growth in sales and earnings per share to strategic actions taken to reshape the company, including expansion in emerging regions and acquisitions that broaden PPG’s geographic presence.
For all of 2007, the company reached sales of $11.2 billion and net income of $834 million. For all of 2006, sales were $9.9 billion, while net income was $711 million.
Glass segment sales increased $27 million, or 10 percent, which the company attributes to improved volumes in the performance glazings and fiberglass businesses and the positive impact of stronger foreign currencies. Segment earnings improved by $8 million, primarily the result of improved sales volumes.
“Overall, 2007 was a milestone year in our transformation to focus on coatings and specialty products,” Bunch adds. “Both coatings segments and our Optical and Specialty Materials segment are consistently delivering profitable growth. They represented just under 80 percent of our continuing operations in both sales and earnings in 2007, and this does not include the future impact of the SigmaKalon acquisition, which was completed on January 2, 2008.” www.ppg.com
NSG Releases Third-Quarter 2008 Financial Statement
Profits are above the previous year, largely due to negative one-off items (a production adjustment) in the comparative period results. North America continued to experience a declining housing market resulting in a decrease in NSG’s sales and profitability.
In South America, results continue at good levels, with market conditions remaining robust, and in Southeast Asia profits demonstrated a marked year-on-year improvement. The inclusion of Pilkington, which became a consolidated subsidiary in June 2006, in the company’s consolidated income statement has substantially increased year-on-year sales, operating profits and ordinary profits in the nine-month period to this quarter. In addition, the company’s share joint ventures and associated companies, included within non-operating income in the income statement, also show profitability.
Cebrace, a joint venture company in Brazil, performed strongly during the period with significantly improved profits. In Russia, the joint venture Pilkington Glass Russia LLC also improved profitability. Total assets at the end of December 2007 were $14.2 billion, representing an increase of $85 million from the end of March 2007. Net financial indebtedness decreased by $605 million from March 31, 2007 to $3.409 billion at the period end, due to the proceeds from the sale of the Australasian business and the company’s continued efforts to reduce debt following the acquisition of Pilkington.
Vitro Sees Strong Fourth Quarter 2007 and Year-End Results
In addition, this quarter saw an income tax gain of $11 million, compared to an expense of $29 million during the same period of 2006. These factors more than offset expenses of $27 million, which included some impairment charges in the company’s Central American subsidiaries, as well as a change in Mexican FRS that requires profit sharing to workers to be registered in other expenses. Flat glass sales, which made up 47 percent of the company’s consolidated sales in 2007, increased 11.1 percent for the quarter to $312 million. Float glass sales remained relatively stable year-on-year, showing a 3-percent increase. “We are particularly pleased with flat glass performance,” says Federico Sada, chief executive officer.
“Our results reflect the continuing shift to value-added, higher margin products in all locations. The fourth quarter of 2007 was the best on a comparable basis that we’ve seen in the last three years. EBITDA rose by 13.6 percent year-on-year. We also reported the highest comparable EBITDA for a fiscal year in flat glass since 2004.” Export sales increased 32.5 percent year-on-year, mainly due to higher float glass volumes, as part of the company’s strategy of temporarily exporting additional capacity gained by the purchase of AFG’s 50 percent stake in Mexicali. Sales from foreign subsidiaries rose 6.2 percent year-on-year to $174 million and maintained their growth momentum. Sales at Vitro Cristalglass, the Spanish subsidiary, increased 37 percent year-on-year due to higher volumes coupled with an improved product mix. Sales at Vitro Colombia increased 42 percent compared with the same quarter last year due to increased volumes linked to the strong demand in the domestic, Venezuelan and Ecuadorian markets.
“It is clear we are continuing to build on Vitro’s inherent strengths in the glass industry as we benefit from our established position, production flexibility and fast time to market,” says Enrique Osorio, chief financial officer. “Given this strong performance, and ongoing emphasis on cost control, we feel Vitro is in an excellent position to face the challenges of 2008.”www.vitro.com
Biesse Sees Low Fourth-Quarter Revenues, But High Full-Year Results
The full year EBITDA of $125.0 million showed a 20.6-percent increase year-on-year; while the EBIT was up 25.8 percent to $103.3 million. Net profit for 2007 was $61.1 million, a 20.1-percent rise from 2006. The financial statements also note that as of December 31, 2007, the company’s net financial position was $1.7 million, down approximately $20.5 million from the same period in 2006. According to information from the company, this figure reflects items acquisition costs and an extraordinary dividend paid in December 2007, totaling more than $63.2 million, which offset the positive cash flow from normal operations.
Roberto Selci, chair of Biesse S.p.A., notes, “In 2007, for the second consecutive year, Biesse not only reached but exceeded the targets set at the start of the year, with record growth rates for profits and revenue, despite external factors that did not play in our favor, such as a declining international economy, aggravated by weakness in the U.S. dollar.” He adds, “Our results for the last quarter of 2007 were also positive despite trade union disputes in the mechanical engineering sector as well as December’s transport strikes. On this premise, the board of directors has approved a three-year plan, which has Biesse aiming for $790 million in consolidated revenue in 2008.
At the same time, we intend to increase what we consider our most strategic investment, namely human resources. We’re investing to make our processes even more innovative and ready to face the challenges of the future.” The three-year industrial plan calls for attaining consolidated revenue of approximately $869 million by 2010, while for profitability, the plan provides for an expected 2010 EBITDA and EBIT exceeding $153 million and $129 million respectively, with net profit of around $80 million. In the three-year period, with Capex of more than $173 million, total free cash flow generated by Biesse is projected to reach approximately $165 million before dividend distribution and the financial impact of a buyback plan deliberated in January.
Under this plan, Biesse has started a buyback of its shares, valid for 18 months for up to 10 percent of the share capital. Biesse currently owns 85,016 of its own shares (3.1 percent of the maximum total of the buyback plan).