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Summit Materials announces loss in 1Q17

Published by , Assistant Editor
World Cement,

Summit Materials Inc has announced its financial results for 1Q17, reporting a basic loss per share of US$0.50 on a net loss of US$52,4 million, compared to a basic loss per share of US$0.42 on a net loss of US$21.1 million in 1Q16. On an adjusted basis, Summit has a diluted loss per share of US$0.50 on a net loss of US$54.8 million, versus a diluted loss per share of US$0.42 on a net loss of US$42.5 million in the prior year period.

“Our business performed ahead of expectations during the first quarter, as organic growth in materials sales volumes and average selling prices contributed to strong year-over-year increases in gross margins and Adjusted EBITDA,” stated Tom Hill, CEO of Summit Materials. “Demand within our core early-cycle residential and commercial construction markets continues to accelerate, while a combination of federal and state level funding for critical infrastructure projects remains a significant opportunity for us, particularly in Texas where a combination of FAST Act, Proposition 1 and Proposition 7 funding combine to support robust multi-year investment in public infrastructure.”

“We forecast positive organic materials volume and price growth for the full-year 2017,” continued Hill. “Within our aggregates businesses, Utah, Virginia and the Carolinas are poised for another strong year, while our businesses in Austin and Vancouver have rebounded from prior year levels, with both regions reporting solid organic volume growth in the first quarter. As expected, our Cement Segment has continued to benefit from a combination of steady demand for product within our Mississippi River corridor markets and sustained growth in average selling prices,” continued Hill. “On an organic basis, sales volumes and average selling prices for cement increased 17.6% and 6.3%, respectively, in the first quarter 2017, when compared to the prior year period.”

“On a year-to-date basis, we have completed six acquisitions, including four transactions that have closed since February,” continued Hill. “Together, these four acquisitions bring another 90 million tons of permitted aggregates reserves into our portfolio, while expanding our vertically-integrated aggregates and products businesses in Northeast Houston, South Carolina, Missouri and Vancouver. Our acquisition pipeline remains very active, with more than 20 transactions currently under review, including four potential acquisitions that are in late-stage diligence.”

“Given contributions from recently completed acquisitions, together with expectations for continued organic growth within our business, we have increased our full-year Adjusted EBITDA guidance,” continued Hill. “For the full-year 2017, we project total Adjusted EBITDA in the range of US$430 million to US$445 million, up from the prior range of US$410 million to US$425 million. On a year-to-date basis, we have invested US$180 million across six transactions, positioning us to meet or possibly exceed our full-year acquired EBITDA target of US$40 million to US$60 million per year. We are pleased with our strong start to the year and look forward to building on this momentum as we continue to create value for our shareholders.”

“Exiting the first quarter, we had more than US$370 million in cash and availability under our revolving credit facility,” stated Brian Harris, CFO of Summit Materials. “Given continued growth in trailing twelve-month free cash flow, together with available cash and liquidity, we are well positioned to support the ongoing growth of our business.”

“Net leverage was 3.7x as of 1 April 2017, versus 4.5x in the prior year period and down from 3.9x at year-end 2016,” continued Harris. “Looking ahead, we continue to target a further reduction in net leverage to approximately 3.0x by year-end 2017, assuming the mid-point of our upwardly revised 2017 Adjusted EBITDA guidance.”

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