Vulcan: Aggregate pricing improving amid higher input costs

Hill

Vulcan Materials Co., the nation’s largest aggregate producer, finished 2018 on a positive note.

Net 2018 earnings came in at $516 million, with an adjusted EBITDA (earnings before interest, tax, depreciation and amortization) of $1.13 billion. The adjusted EBITDA represents a 15 percent increase despite Vulcan experiencing “significantly higher energy costs.”

“Our fourth-quarter results reflect a strong finish to the year,” says Tom Hill, chairman and CEO at Vulcan. “Solid shipment growth, compounding price improvements and strong operating efficiencies in our aggregates business contributed to double-digit growth in revenues and operating earnings. Aggregates pricing continued its upward momentum, and unit profitability expanded further despite higher costs for diesel fuel.”

In addition, Hill expects 2019 to bring additional growth for the company.

“Our aggregates-focused business is well positioned for further gains in our industry-leading unit profitability in aggregates,” Hill says. “Since the recovery began in the second half of 2013, our core operating and sales disciplines have contributed to 13 percent average annual growth in aggregates gross profit per ton. We expect double-digit earnings growth again in 2019, given the strength of our operational performance and continuing growth in public sector demand.”

Aggregate pricing continues to improve, as well.

“Mix-adjusted pricing in the fourth quarter increased 5 percent, and we expect price growth in 2019 at a similar rate,” Hill says.