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Vulcan Materials reports higher sales, profits and volumes in 2Q14

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World Cement,

Vulcan Materials Company, the US construction aggregates company, has reported increases in sales, profit, shipments and prices for 2Q14.

Net sales hit US$60 million, up 9% y/y, while gross profit was up 32% at US$42 million. The aggregates segment gross profit hit US$162 million, up 27%, and prices increased by 3% on a freight-adjusted basis. At 4.1 million t, shipments increased 10%, with cash gross profit per tonne up 8% at US$5. Adjusted EBITDA was US$173 million, up 23% y/y.

In the aggregates segment, revenues were up at US$596 million. Aggregates shipments increased 10% on average, with some markets – including, among others, Georgia, Texas and North Carolina – reporting more than 15% volume growth. Virtually all markets realised price improvements.

Overall gross profit from the non-aggregates segments was up US$7 million y/y, thanks largely to earnings improvement in the concrete segment, which saw gross profit of US$3 million from a US$6 million loss in 2Q13. Asphalt gross profit was in line with 2Q13, while the calcium products business reported a slight increase. The company’s cement business was sold in 1Q13.

Tom Hill, President and Chief Executive Officer of Vulcan Materials, said: “Growth in the private end markets continues to drive increased construction activity and demand for our products. Leading indicators, such as housing starts, nonresidential contract awards and employment, continue to show favourable above-average growth trends in Vulcan-served markets. These factors underpin our full year aggregates shipment forecast of a 7 to 9 percent increase in 2014. This volume growth, coupled with the continuing improvement in unit profitability, supports our expectations for strong earnings leverage and margin expansion – and we remain focused on achieving these expectations.”

He added: "Our second quarter and first half results demonstrate the broadening recovery of our markets and the benefits of the Company's powerful earnings leverage. Comparing the first half of 2014 to the first half of 2013, Adjusted EBITDA grew US$45 million, or 27 percent, on a 9 percent increase in net sales. We expect to continue to deliver strong gains in earnings because of increasing demand in Vulcan-served markets."

Adapted from press release by

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