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Released October 16, 2015 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--PPG Industries (NYSE:PPG) (Pittsburgh, Pennsylvania) weathered a dip in sales volumes in third-quarter 2015, as benefits from acquisitions--six so far this year--helped the coatings manufacturer to reach a new third-quarter net income record. Industrial Info is tracking $242.64 million in projects involving PPG.
Construction is under way on two major unit additions at separate coatings plants for a PPG subsidiary in Zhangjiagang, China, valued at $46.11 million and $42.56 million. The former will produce 30,000 metric tonnes per year of polyurethane coatings and 50,000 metric tonnes per year of water-based coatings at a plant in Yangtze River Chemical Industrial Park; the latter will produce 30,000 metric tonnes per year of industrial coatings and 50,000 metric tonnes per year of water-based primers at a plant in Yangzi Chemical Zone.
Net income was reported to be $433 million for the quarter, a 16.71% increase from third-quarter 2014; net sales stood at $3.87 billion, a 1.6% decrease. Although lower industrial demand and an unfavorable currency-exchange translation weakened net sales, PPG's bottom line received a strong boost from acquisitions it completed so far this year, which included specialty-powder and liquid-coatings manufacturer IVC Industrial Coatings Incorporated (Brazil, Indiana); pretreatment products producer Chemfil Canada Limited (Windsor, Ontario); specialty coatings and materials manufacturer Cuming Microwave (Avon, Massachusetts); and a majority interest in the aerospace and automotive sealants and adhesives business of Le Joint Français (Bezons, France).
In particular, PPG benefited from last year's acquisition of architectural coatings company Consorcio Comex, S.A. de C.V. (Mexico City, Mexico), which led a $260 million gain in sales from recent acquisitions.
Capital expenditures, excluding acquisitions, were reported to be about $105 million for the third quarter and about $265 million year-to-date. During the quarter, PPG also completed a $27 million expansion of its coatings-manufacturing facility in San Juan del Rio, Mexico, and a $3.8 million expansion at its coatings-manufacturing facility in Laguna de Duero, Spain. The additions will help to meet higher regional demand for automotive parts and industrial applications.
"Regionally, we achieved higher sales volumes in Europe, with trends slightly ahead of the previous quarter as we continue to see broader, incremental improvement in that region," said Michael H. McGarry, the president and chief executive officer of PPG, in a statement accompanying the quarterly earnings. "Year-over-year sales volumes grew in Asia as well, with softness and customer destocking early in the quarter followed by demand improvement later in the quarter. Sales volumes in the U.S. and Canadian markets were lower year-over-year, primarily due to customer inventory management. South American demand weakened in comparison to the previous quarter and year-over-year."
PPG executives estimate capital expenditures for full-year 2015 to be 3% of sales, down from the previous estimate of between 3.5% and 4%. Sales volumes are expected to resume their growth in the fourth quarter as demand inches up, customers end their destocking, and acquisitions like Comex continue to boost revenues. The negative effects of foreign-currency translations are expected to moderate in the fourth quarter, as well.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Construction is under way on two major unit additions at separate coatings plants for a PPG subsidiary in Zhangjiagang, China, valued at $46.11 million and $42.56 million. The former will produce 30,000 metric tonnes per year of polyurethane coatings and 50,000 metric tonnes per year of water-based coatings at a plant in Yangtze River Chemical Industrial Park; the latter will produce 30,000 metric tonnes per year of industrial coatings and 50,000 metric tonnes per year of water-based primers at a plant in Yangzi Chemical Zone.
Net income was reported to be $433 million for the quarter, a 16.71% increase from third-quarter 2014; net sales stood at $3.87 billion, a 1.6% decrease. Although lower industrial demand and an unfavorable currency-exchange translation weakened net sales, PPG's bottom line received a strong boost from acquisitions it completed so far this year, which included specialty-powder and liquid-coatings manufacturer IVC Industrial Coatings Incorporated (Brazil, Indiana); pretreatment products producer Chemfil Canada Limited (Windsor, Ontario); specialty coatings and materials manufacturer Cuming Microwave (Avon, Massachusetts); and a majority interest in the aerospace and automotive sealants and adhesives business of Le Joint Français (Bezons, France).
In particular, PPG benefited from last year's acquisition of architectural coatings company Consorcio Comex, S.A. de C.V. (Mexico City, Mexico), which led a $260 million gain in sales from recent acquisitions.
Capital expenditures, excluding acquisitions, were reported to be about $105 million for the third quarter and about $265 million year-to-date. During the quarter, PPG also completed a $27 million expansion of its coatings-manufacturing facility in San Juan del Rio, Mexico, and a $3.8 million expansion at its coatings-manufacturing facility in Laguna de Duero, Spain. The additions will help to meet higher regional demand for automotive parts and industrial applications.
"Regionally, we achieved higher sales volumes in Europe, with trends slightly ahead of the previous quarter as we continue to see broader, incremental improvement in that region," said Michael H. McGarry, the president and chief executive officer of PPG, in a statement accompanying the quarterly earnings. "Year-over-year sales volumes grew in Asia as well, with softness and customer destocking early in the quarter followed by demand improvement later in the quarter. Sales volumes in the U.S. and Canadian markets were lower year-over-year, primarily due to customer inventory management. South American demand weakened in comparison to the previous quarter and year-over-year."
PPG executives estimate capital expenditures for full-year 2015 to be 3% of sales, down from the previous estimate of between 3.5% and 4%. Sales volumes are expected to resume their growth in the fourth quarter as demand inches up, customers end their destocking, and acquisitions like Comex continue to boost revenues. The negative effects of foreign-currency translations are expected to moderate in the fourth quarter, as well.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
