How Summit Materials fared in the first quarter of 2018

By |  May 17, 2018

Hill

Summit Materials released its quarterly report for the first quarter of 2018.

The company reports that aggregate net revenues increased by 9.5 percent to $67.5 million in the first quarter, compared to the prior-year period. 

Aggregate adjusted cash gross profit margin declined to 41.5 percent in the first quarter, versus 43.6 percent during the same period in 2017. 

Organic aggregate sales volumes declined 6.8 percent in the first quarter, the company says, mainly due to lower organic aggregate sales volumes in the East, where challenging weather impacted working conditions. Organic average selling prices on aggregate increased 1.6 percent in the first quarter due to year-over-year improvements in prices within both the company’s West and East segments during the quarter.

“While demand fundamentals remain strong in our core markets, weather conditions were challenging during the first quarter, resulting in lower materials sales volumes in the period,” says Tom Hill, CEO of Summit Materials. “Importantly, given the inherent seasonality of our business, the first quarter has a very limited impact on our full-year outlook. Our businesses have strong momentum heading into the start of construction season.”

Overall, Summit’s net revenue increased 11.9 percent to $289.9 million in the first quarter, compared to $259.0 million in the prior-year period. The improvement in net revenue was primarily attributable to acquisition-related contributions in both the East and West segments, as well as organic growth in the West.

“We believe demand for construction materials could increase meaningfully during the second half of 2018, given recent feedback from our customers and operating companies,” Hill says. “Our outlook for north Texas, Austin, Vancouver, Utah and the Carolinas has improved within the last 90 days, given strong growth in single-family residential, stable growth in low-rise commercial and accelerating growth in state public lettings.

“Despite the slow start to the year, the combination of accelerating organic growth within our larger platform markets, together with a solid pipeline of acquisition targets, positions Summit for another strong year ahead,” Hill adds.

For details on Summit Materials’ latest acquisitions, click here.

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