US-based Vulcan Materials has announced its results for 1Q13. Total revenue increased very slightly from US$535.9 million in 1Q12 to US$538.2 million this year. Meanwhile, gross profit fell from US$22 million to US$18 million and EBITDA dropped from US$47 million to US$26 million.
The company saw cement shipments rise from 217 000 t to 248 000 t, with gross profit increasing from US$874 000 to US$1 million. Gross profit improved for both the asphalt mix and concrete segment of the business, and overall gross profit from the non-aggregates businesses increased by US$5 million to a loss of US$7 million. Concrete shipments grew from 964 000 y3 to 1 million y3, while aggregates shipments increased from 27.9 million t to 29.5 million t. Although aggregates shipments increased by 10% y/y in Arizona, California, Florida and North Carolina, shipment levels declined y/y in Midwest, Tennessee and Virginia, where favourable weather conditions and a number of projects had boosted volumes in 1Q12.
“We believe economic and construction-related fundamentals that drive demand for our products are continuing to improve from the historically low levels created by the economic downturn. Leading indicators of private construction activity continue to improve. Residential housing starts in the US are up sharply from a year ago and contract awards for private non-residential buildings, measured in square feet, are up 16%. Consequently, aggregates demand in private construction is growing. Importantly, we are seeing significant housing start growth in several key states, including Florida, Texas, California, Georgia and Arizona. Growth in residential construction has historically been a leading indicator of other construction end uses,” said Chairman and Chief Executive Officer Don James.
“…Additionally, earnings in each of our non-aggregates segments should improve versus the prior year. Asphalt materials margin increased throughout 2012 and we expect material margins to increase again in 2013 and contribute to earnings growth in this segment. Full year concrete volumes and materials margin are expected to improve in 2013 as housing starts continue recovering in key states. Concrete volumes in the first quarter increased 6% versus the prior year due in part to increased private construction activity in Florida. We expect the increased private construction activity to continue leading to improved unit profitability in the Concrete segment. Cement earnings should improve in 2013 due mostly to lower production costs. As a result, collectively, full year earnings from these segments are expected to contribute significantly to earnings improvement in 2013,” added James.
Adapted from press release by Louise Fordham.
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