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Vulcan Materials aggregate sales up in first quarter

By |  May 4, 2021

Logo: Vulcan Materials Co.

Vulcan Materials reported that its first-quarter aggregate segment sales increased 3 percent and gross profit increased 15 percent to $224 million.

Aggregate shipments increased 3 percent from the prior year’s first quarter, Vulcan says. Average daily shipping rates were lower year over year in February, although the company says they were higher in January and March. According to the company, this cadence was due to winter weather that moved from Texas into parts of the Southeast and Mid-Atlantic in February.

Additionally, Vulcan says the aggregate pricing environment continues to be positive across its footprint as demand visibility continues to improve. For the quarter, freight-adjusted pricing increased 2 percent. Mix-adjusted pricing improved sequentially in March, Vulcan says, reflecting recently announced price increases in certain markets. Prices are expected to continue to increase sequentially during the remainder of the year, the company adds.

Operating efficiency gains helped drive year-over-year declines in freight-adjusted unit cost of sales – down 2 percent in total and 3 percent on a cash basis. According to Vulcan, flexible operating plans and disciplined cost control mitigated the impact of any operational disruptions caused by the uneven start to the year.

For 2021, Vulcan management expects aggregate shipments to increase between 1 and 4 percent compared to 2020.

Headshot: Tom Hill, Vulcan Materials

Hill

“We remain focused on factors within our control, including pricing and cost actions, both of which will drive further improvement in our industry-leading unit margins,” says Tom Hill, chairman and CEO at Vulcan. “Our operating plans are underpinned by four strategic disciplines – commercial and operational excellence, logistics innovation and strategic sourcing – a healthy balance sheet and the engagement of our people. Our performance clearly demonstrates that a balanced approach to growth, focusing on organic investments, acquisitions, and greenfield developments is the best way to create value for our shareholders.”

Companywide, Vulcan reported a first-quarter adjusted EBITDA (earnings before interest, tax, depreciation and amortization) of $244 million. That mark represents a 22 percent year-over-year increase.

“Our first-quarter results are a testament to the resiliency of our best-in-class aggregates business,” Hill says. “While severe winter weather conditions in February resulted in an uneven start to the year, strong execution from our teams allowed us to drive earnings growth and margin expansion. As the construction season got underway during March, many of our key markets began to see shipments rebound. Our four strategic disciplines helped us grow our aggregates cash gross profit by 9 percent to $6.56 per ton.”

According to Hill, Vulcan continues to see strength in residential construction activity that’s driven by single-family housing.

“Recent growth in highway awards and construction employment trends in our markets also bode well for further recovery in construction activity later in 2021,” Hill says. “Shipments into private nonresidential continue to benefit from heavy industrial projects, such as data centers and warehouses, while leading nonresidential indicators suggest growth opportunities in other categories are on the horizon. The pricing environment remains positive, and we continue to execute at a high level, positioning us well for 2021.”

Kevin Yanik

About the Author:

Kevin Yanik is the editor-in-chief of Pit & Quarry magazine. Yanik can be reached at 216-706-3724 or kyanik@northcoastmedia.net.

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