Vulcan pleased with first-quarter 2019 optimistic looking ahead

By |  May 6, 2019
Headshot: Tom Hill, Vulcan Materials

Hill

Earnings were up in the first quarter at Vulcan Materials, whose CEO is optimistic about the months ahead.

According to Vulcan, net earnings were $63 million in the first quarter and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) totaled $193 million. Strong aggregate shipments, up 13 percent year-over-year, and a 5.4 percent increase in aggregate pricing drove the 15 percent increase in adjusted EBITDA.

“Our first-quarter results represent a good start to the year and are consistent with our full-year expectations,” says Tom Hill, chairman and CEO of Vulcan. “Broad-based shipment growth, compounding price improvements and solid operating efficiencies in our aggregates business contributed to 17 percent growth in total revenues and 29 percent growth in operating earnings. These results demonstrate the strength of our unique aggregates-centric business model.”

Additionally, Vulcan’s aggregate segment gross profit increased from $3.66 per ton to $4.07 per ton.

“This double-digit improvement in first-quarter unit profitability builds on last year’s results, and we are well positioned for further gains in our industry-leading unit profitability,” Hill says.

According to Hill, Vulcan’s key markets are benefitting from robust growth in public construction demand and continued growth in private demand.

“Leading indicators, such as construction award activity, signal broad-based shipment growth across our footprint,” Hill says. “Aggregates pricing momentum continues to improve – consistent with our full-year expectations.”

Vulcan’s aggregate business

Also in the first quarter, Vulcan’s aggregate segment gross profit increased 25 percent to $186 million. First-quarter aggregate shipments jumped 13 percent versus the prior-year quarter.

According to Vulcan, solid underlying fundamentals and pent-up demand carried over from last year to help drive shipment growth across most of the company’s footprint.

In California, shipments dropped by double-digits due to record rainfall throughout most of the quarter. A strong demand environment, driven by transportation-related construction, as well as growth in the company’s project-related bookings, support Vulcan’s expectations for shipment growth in California in 2019.

In pricing, growth was positive across all of the markets Vulcan serves. For the quarter, freight-adjusted average sales price for aggregate increased 5.4 percent versus the prior year’s quarter. Excluding mix impact, aggregate price increased 5.8 percent compared to the prior year first quarter.  Pricing was particularly strong in Arizona, California, Georgia, Tennessee and Texas, the company says.

“We delivered good incremental earnings in the first quarter, and we are well positioned to carry that momentum forward through the remainder of the year,” Hill says. “Above-average demand growth in Vulcan markets compared to the rest of the United States further supports our positive outlook for shipment growth.”

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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