Summit Materials reports first-quarter 2019 revenue increase

By |  May 13, 2019

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Summit Materials saw net revenue increase 5.5 percent in the first quarter, while net income and earnings per share decreased.

Adjusted earnings before interest, tax, depreciation and amortization increased $6.6 million in 2019 compared to $5.5 million in 2018, as increases in aggregate and asphalt volumes were achieved. According to its first-quarter earnings report, Summit Materials says increases were offset by higher costs of revenue in its cement segment due to lower production levels in the quarter.

“We were very pleased to see our organic average sales prices for aggregate increased by 6.3 percent in the first quarter as compared to a year ago,” says Tom Hill, CEO of Summit Materials. “We continue to believe end market fundamentals remain intact for the construction industry going into 2019.”

Hill says cement sales volumes were up slightly in the first quarter as compared to 2018 despite challenging weather conditions. Extended annual maintenance shutdown and flooding on the Mississippi River carried over into the second quarter, negatively effecting its cement business.

Aggregate net revenues increased by 30.3 percent to $87.9 million in the first quarter 2019, when compared to the prior year period. Aggregate adjusted cash gross profit margin improved to 43.2 percent in the first quarter 2019, compared to 41.5 percent in the prior year period, as pricing gains exceeded input costs.

Organic aggregate sales volumes increased 6.6 percent in the first quarter. Organic average selling prices on aggregate increased 6.3 percent in the first quarter 2019 when compared to the prior year period due to improvements in prices within both the West and East segments during the period.

State transportation funding measures in Texas, coupled with steady increases in federal subsidies, are contributing to increased lettings activity, Hill says. Single family housing starts and permits remain well below peak levels in the company’s major markets.

“Underlying demand conditions in most of our markets remain favorable and are expected to remain so during the remainder of 2019,” Hill says.

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Joe McCarthy is a former Associate Editor of Pit and Quarry Magazine.

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