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Aggregates drive Vulcan Materials’ second quarter growth

By |  August 4, 2022

Logo: Vulcan Materials Company

Second-quarter aggregate sales at Vulcan Materials totaled $1.4 billion, up 24.5 percent over the second quarter of 2021.

Gross profit within the company’s aggregate segment in the quarter reached $402 million, an 8 percent ($28.6 million) increase over last year’s second quarter. Cash gross profit per ton increased 2 percent to $7.99.

Aggregate shipments grew 9 percent in the second quarter compared to April, May and June 2021. Vulcan says this increase reflects shipment contribution from acquisitions and construction activity consistent with its expectations.

“Our teams continued to execute well and delivered another quarter of solid earnings growth amidst a challenging backdrop,” says Tom Hill, chairman and CEO of Vulcan. “We are well on our way to delivering another year of double-digit earnings growth.”

Total second-quarter revenues were up 43.6 percent to $1.95 billion compared to a year earlier, according to Vulcan. Average selling prices increased in each product line, helping to offset inflationary pressures.

“We increased our aggregates gross profit by 11 percent during the trailing 12 months despite ongoing inflation and other external headwinds,” Hill says. “Robust growth in aggregates pricing and a relentless focus on operating disciplines will help us carry this momentum forward.

“Our asphalt pricing actions, which began late last year, are increasingly offsetting sharply higher liquid asphalt costs, and we remain focused on growing our gross profit in our asphalt segment,” Hill adds. “In concrete, leading indicators for private nonresidential construction activity and a favorable pricing environment will support earnings growth in 2022.”

Additional analysis

Vulcan says its second-quarter aggregate results included the impacts of what it called an unexpected and arbitrary shutdown by the Mexican government of its Mexico operations in early May.

The Mexican government argued that Vulcan caused environmental damage because of mining under the water table. In a statement released following the decision, Vulcan called the action illegal, saying the company has quarried limestone legally in Mexico – on its own land – for more than 30 years.

Due to the shutdown, Vulcan says it is facing a possible EBITDA (earnings before interest, taxes, depreciation and amortization) impact of $80 to $100 million if it is unable to operate in Mexico for the remainder of the year.

“We are updating our full-year adjusted EBITDA guidance range to reflect the considerable pricing momentum in our aggregates business, as well as higher-than-expected energy-related cost inflation that is currently impacting each of our segments,” Hill says. “Additionally, our outlook now reflects the previously disclosed impact of the closure of our Mexico operations for the balance of 2022.”

Jack Kopanski

About the Author:

Jack Kopanski is the Managing Editor for Pit & Quarry and Portable Plants. Kopanski can be reached at 216-706-3756 or jkopanski@northcoastmedia.net.

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