Summit Materials Inc reports third quarter 2024 results

Third Quarter 2024 | Total Company Results

Net revenue increased US$369.9 million, or 49.9%, in the third quarter to US$1,111.8 million. In the quarter, US$403.4 million of net revenue was due to acquisitions, primarily the Argos USA transaction. Divestitures decreased net revenue by US$43.6 million in the period. All lines of business experienced organic pricing growth.

Operating income increased in the third quarter by 52.1% to US$194.7 million largely due to the Argos USA transaction. Summit's operating margin percentage for the three months ended September 28, 2024, increased to 17.5% from 17.2%.

Net income attributable to Summit Inc. decreased to US$105.2 million, or US$0.60 per basic share, compared to US$230.0 million, or US$1.93 per basic share in the prior year period. The decrease is due primarily to the tax receivable benefit recognised in the third quarter of 2023 of US$153.1 million. Summit reported adjusted diluted net income of US$131.2 million, or US$0.75 per adjusted diluted share, compared to an adjusted diluted net income of US$97.5 million, or US$0.81 per adjusted diluted share, in the prior year period.

Adjusted EBITDA increased US$106.2 million, or 50.9%, to US$314.7 million reflecting the contribution from the Argos USA assets, continued pricing gains, and operational improvements across the enterprise, including integration synergies.

Third Quarter 2024 | Results by Line of Business

Aggregates Business: Aggregates net revenues increased by US$12.5 million to US$192.3 million in the third quarter. Aggregates adjusted cash gross profit margin decreased to 58.5% in the third quarter as compared to 59% in the prior year period. Aggregates sales volume decreased 1.8% in the third quarter as a result of divestitures. Organic aggregates sales volumes increased 0.7% primarily driven by Utah, British Columbia, and the Carolinas. Average selling prices for aggregates increased 7.4%, with organic pricing growth of 6.9%. Pricing growth was strong throughout the footprint and led by the East Segment, which increased 8.3% versus the prior year period.

Cement Business: Cement Segment net revenues increased to US$323.2 million in the third quarter. Cement Segment adjusted cash gross profit margin increased to 47.2% in the third quarter, compared to 46.3% in the prior year period. Sales volume of cement increased 203.1% while organic sales volumes decreased 11.3% due to a combination of adverse weather conditions and moderating demand leading to, in part, lower imported volumes versus the prior year period. Organic average selling prices increased 3.9% in the third quarter, primarily reflecting increases implemented earlier in the year.

Products Business: Products net revenues were US$516.4 million in the third quarter, up 48.9% versus the prior year period. Products adjusted cash gross profit margin decreased to 17.8% in the third quarter. Organic average sales price for ready-mix concrete increased 5.5%, with pricing growth in both segments. Organic sales volumes of ready-mix concrete decreased 10% due to unfavourable weather conditions and subdued private end-market activity. Organic average selling prices for asphalt increased 4.5%. Organic sales volume increased 0.4%, driven by growth in North Texas.

Third Quarter 2024 | Results By Reporting Segment

West Segment: The West Segment operating income increased US$6.2 million to US$95.8 million. Adjusted EBITDA increased US$10.5 million, or 8.9%, to US$128.4 million in the third quarter. Aggregates revenue increased 1.5%, driven by continued pricing growth. Pricing grew 6.2% over the prior period led by double-digit growth in certain Texas markets, as well as Arizona. Ready-mix concrete revenue increased 10.6% on 3.3% pricing growth and 7.1% volume growth. Organic ready-mix pricing increased 5.4%. Restrained private construction activity and weather headwinds drove organic ready-mix volumes down 10.4% in the period. Asphalt revenue increased 4.9% reflecting a volume increase of 0.4% and pricing growth of 4.5%.

East Segment: The East Segment operating income increased US$16.5 million to US$50.7 million and Adjusted EBITDA increased US$20.2 million to US$70.3 million. Aggregates revenue increased 9.5% versus the prior year period. Organic Aggregates volumes increased 1.1%, with the Carolinas and Missouri markets offsetting softness in Kansas. Aggregates pricing increased 8.3% with most markets realizing high single-digit or double-digit growth. Ready-mix concrete revenue increased US$142.3 million to US$165.4 million due to the acquisition of the Argos USA ready-mix concrete operations in Florida, Georgia, and the Carolinas. Asphalt revenue decreased US$7.8 million versus the prior year period due to divestiture of asphalt assets.

Cement Segment: The Cement Segment operating income increased 142.5% to US$92.8 million. Adjusted EBITDA increased US$89.7 million, primarily from the Argos USA transaction. Adjusted EBITDA margin increased to 43.3% from 41.5%. As noted above, the Cement Segment reported an organic volume decrease of 11.3% and organic selling price growth of 3.9%.

Liquidity and Capital Resources

As of September 28, 2024, the Company had US$737.5 million in cash and US$2.8 billion in debt outstanding. The Company's US$625 million revolving credit facility has $592.7 million available after outstanding letters of credit.

For the nine months ended September 28, 2024, cash flow provided by operations was US$344.2 million and cash paid for capital expenditures was US$275.1 million.

As of September 28, 2024, approximately US$149 million remained available for share repurchases under the share repurchase program.

Read the article online at: https://www.worldcement.com/the-americas/01112024/summit-materials-inc-reports-third-quarter-2024-results/