Third quarter fiscal 2020 results summary:
- Third quarter revenue of US$350.2 million, up 5%.
- Net loss per diluted share of US$2.77, down 323%.
- Asset impairments of US$224.3 million related to the oil and gas proppants business were the principal factor contributing to the net loss for the quarter.
- Adjusted earnings per share of US$1.51, up 22%.
- Net loss of US$114.6 million, down 299%.
- Adjusted EBITDA of US$118.7 million, up 6%.
Commenting on the third quarter results, Michael Haack, President and CEO of Eagle Materials, said, “We are pleased that during the third quarter of fiscal 2020 we capitalised on robust underlying demand across our geographic footprint to achieve a 5% revenue improvement. Notably, our cement sales volume was up 7% to a record 1.4 million t. Market demand for our Wallboard also remained healthy, with shipments up 2%. Our operational cost-control initiatives and continued strong operational execution also contributed to the favourable third-quarter performance.”
Haack concluded, “The outlook for calendar 2020 is positive. We expect demand for our building materials and construction products will continue to be supported by several advantageous market dynamics, including ongoing growth in jobs, high consumer confidence and low interest rates.”
As previously announced, on 25 November 2019, Eagle entered into a definitive agreement with Kosmos Cement Company (a joint venture between CEMEX and Buzzi Unicem S.p.A), to purchase the Kosmos cement plant in Louisville, Kentucky, as well as seven distribution terminals and substantial raw-material reserves. The plant has the capacity to produce nearly 1.7 million tpy of cement. Eagle expects that the acquisition will increase its US annual cement capacity by approximately 25% to more than 7.5 million tons. The purchase price is US$665 million, subject to customary post-closing adjustments. Eagle expects the transaction to close in its fiscal 2020 fourth quarter following the receipt of required regulatory approvals and other typical closing conditions. Eagle intends to finance the acquisition through a combination of cash on hand and borrowings under a new syndicated term loan facility.
Heavy Materials: cement, concrete and aggregates
Revenue in the Heavy Materials sector, which includes cement, concrete and aggregates, and joint venture and intersegment cement revenue, was US$229.8 million, an 18% increase. Heavy Materials operating earnings increased 19% to US$57.5 million primarily because of higher sales volume and net sales prices.
Cement revenue, including joint venture and intersegment revenue, was up 12% to US$183.0 million, reflecting improved net sales prices and sales volume. The average net sales price for the quarter increased 2% to US$110.09 per t. Cement sales volume for the quarter was a record 1.4 million t, up 7% versus the prior year.
Operating earnings from cement were US$54.2 million, 15% above the same quarter a year ago. The earnings improvement was primarily due to higher sales volume and net sales prices.
Concrete and Aggregates revenue for the third quarter was US$46.8 million, an increase of 53%. Third quarter operating earnings were US$3.3 million, a 222% increase, reflecting record concrete sales volume, improved concrete and aggregates sales prices and the financial results of a small concrete and aggregates business that Eagle acquired in August 2019.
Read the article online at: https://www.worldcement.com/the-americas/06022020/eagle-materials-reveals-third-quarter-financial-results/
You might also like
Brad Pronschinske, Martin Engineering, explains how the effective use of air cannons can remedy silo buildup and clogging issues, avoiding lost production and increasing safety.