Vulcan makes third-quarter gains in aggregate volumes, pricing

Third-quarter aggregate sales were up 11.7 percent to $1.17 billion in the third quarter at Vulcan Materials Co., and the company’s quarterly gross profit from aggregate sales jumped 10 percent to $372 million.

According to Vulcan, the year-over-year earnings improvement in its aggregate business was widespread across its footprint, resulting from both volume and price growth and effective cost control.

Additionally, total aggregate shipments totaled 60.2 million tons in the third quarter this year versus 55.9 million in last year’s third quarter. That’s an increase of 8 percent.

Same-store aggregate shipments increased 5 percent, Vulcan adds, reflecting improving demand across all end-market segments despite severe wet weather in certain key markets.

The aggregate pricing environment continues to be positive across the company’s footprint as demand visibility improves, Vulcan says. The rate of pricing growth improved sequentially with each quarter this year. In the third quarter, same-store freight-adjusted pricing increased 3.1 percent year over year, with the growth widespread across geographies.

Also in the third quarter, Vulcan says solid execution helped it offset a more-than-50 percent increase in the average unit cost of diesel fuel, inflation for certain parts and supplies, and operational disruptions caused by wet weather in the Southeast and along the Gulf Coast due in part to Hurricane Ida. Same-store freight-adjusted unit cost of sales increased 1.7 percent over the prior year’s third quarter but decreased almost 1 percent, excluding the impact of higher diesel prices.

Total cash gross profit in Vulcan’s aggregate business improved 3 percent from the prior year’s third quarter to $7.74 per ton. The company expects positive pricing opportunities and improved operating efficiencies to continue to help offset some of the cost inflation going forward.

Hill

“Our aggregates-focused business is built for times like these,” says Tom Hill, Vulcan chairman and CEO. “We expanded our industry-leading trailing-12-month unit profitability for the 13th consecutive quarter despite a challenging operating environment caused by inflationary pressures and labor constraints.”

While Hill says the last 18 months of pandemic disruptions and economic challenges were difficult, he adds that Vulcan strengthened its operating disciplines and was able to move pricing higher.

“Now that trailing-12-month aggregates volumes are back to pre-pandemic levels, these solid fundamentals, coupled with our leading positions in attractive geographies, position us well to capitalize on positive demand trends going forward, and will allow us to deliver both revenue and earnings growth,” Hill says.

Vulcan also closed the U.S. Concrete (USCR) acquisition in the second quarter.

“The USCR acquisition extends our growth platform, and we are excited about the opportunities in front of us,” Hill says. “The prospects continue to be positive for the most significant federal investment in infrastructure since the creation of the Interstate Highway System in 1956, and we are well situated with leading positions in attractive growth areas where the need is greatest.”