Vulcan sets expectations for 2016

By |  February 4, 2016

Vulcan Materials Company, Birmingham, AL. (PRNewsFoto/Vulcan Materials Company)

Economists say to expect growth in construction materials demand this year. Vulcan Materials Co., one of the nation’s largest aggregate producers, expects growth, as well.

According to Vulcan, which recently released its fourth-quarter performance report, the company expects overall demand in Vulcan-served markets to be up about 7 percent in 2016. Additional growth in private and public construction will drive the demand, Vulcan says.

Private construction activity should continue to grow in both residential and nonresidential segments, led by double-digit growth in residential, Vulcan says. The company expects public construction in its markets to continue to benefit from state-led highway spending in key states and record levels of local tax receipts.

The recently enacted FAST Act is another reason for confidence at Vulcan. The company believes mid-single-digit growth is possible this year for “aggregates-intensive” end markets.

“Our expectation for full-year adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $1.0 to $1.1 billion is driven by the continuing recovery in demand from the trough seen in 2012, strong growth in aggregates gross profit per ton, earnings improvement in our non-aggregates businesses and continuing leverage of our SAG (selling, general and administrative) expenses,” says Tom Hill, Vulcan president and CEO.

In 2016, Vulcan expects aggregates shipments to be up 7 percent; an increase in average freight-adjusted aggregates pricing of 7 percent; and aggregates gross profit growth of 25 percent.

“We are encouraged by the ongoing recovery in demand continuing across our markets and by the positive pricing environment,” Hill says. “I’m very pleased with the way our people are leading the industry in converting incremental revenue into incremental gross profit. We remain focused on continuous improvement and on turning in another strong year.”

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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