Aggregate sales up at Vulcan Materials in first quarter 2020

Hill

First-quarter 2020 revenues at Vulcan Materials were $1.05 billion, compared to $996 million during the same period last year, the company reports.

First-quarter net earnings came in at $60 million, and adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $201 million. In addition, segment revenues and gross profit improved in each of Vulcan’s product lines, according to the company.

“Our first-quarter earnings improved across all segments and were in line with our expectations, despite wet weather in certain key markets in the Southeast and Southwest,” says Tom Hill, chairman and CEO at Vulcan Materials. “These results demonstrated the strong long-term fundamental position of our aggregates-led businesses and our commitment to leading the industry in pricing and unit profitability.”

Aggregate segment details

First-quarter aggregate segment sales increased 4 percent compared to the same period last year, Vulcan adds. In addition, first-quarter gross profit at Vulcan increased 5 percent to $194 million.

According to Vulcan, both improvements resulted from growth in shipments in key markets and widespread growth in pricing.

“Aggregates is far more adaptable to these demand shifts than any other construction materials, a characteristic that should serve us well during this period of disruption,” Hill says. “As a result, we will be well-equipped to manage our business effectively and serve our customers reliably through these unprecedented times.”

Overall, first-quarter aggregate shipments were down 1 percent, compared to the first quarter of 2019, which saw a 13 percent increase in aggregate shipments as a result of delayed shipments in the fourth quarter of 2018.

According to Vulcan, numerous markets in the Southeast and Southwest were negatively impacted by wet weather. At the same time, though, shipments in California, Florida, Illinois and Virginia saw solid growth.

On a mix-adjusted basis, Vulcan says all of its key markets reported year-over-year price growth. Freight-adjusted average sales price increased 4.5 percent in the first quarter, compared to the same period last year.

“We experienced minimal financial impact from the COVID-19 pandemic in the first quarter,” Hill says. “Our main focus right now is ensuring the health and safety of our employees, maintaining our operational readiness, preserving liquidity and supporting the communities in which we operate. Our employees are engaged and ready to support one another, service our customers and meet the challenges of today as we prepare for tomorrow.”

2020 outlook

Adds Hill: “The impact from the COVID-19 global pandemic continues to evolve quickly, and it is too early to estimate accurately the full-year impact on aggregates demand. Because we have been designated as an essential business, shipment activity today remains relatively strong across many of our markets as customers execute on their backlog of projects. However, we expect some project timelines will be modified as every market adjusts to economic disruptions.”

Furthermore, the company is withdrawing its previous financial guidance for the year ahead, according to Hill.

“We will continue to closely monitor trends in construction activity and work with our customers to meet their needs in this challenging operating environment,” Hill says. “We will provide updates as more information becomes available and our visibility improves. While we do not have the ability to control demand, our advantage is our ability to control many other aspects of our business. We remain confident in our ability to successfully navigate the changing environment. We will continue to operate from a position of strength supported by the resiliency of our aggregates business, progress on the four strategic disciplines and the engagement of our people.”

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