Eagle Materials: higher costs and lower volume

Eagle Materials:  higher costs and lower volume
Published: 29 July 2011

For its first quarter of the financial year to 31 March, Eagle Materials’ turnover, including its share of the Texas Lehigh cement joint venture, declined by 5.6% to US$141.2m. The pre-tax profit profit fell by 72.5% to US$4.0m, after charging net interest costs that were 13.3% lower at US$4.6m.   The net attributable dropped by 71.0% to US$3.1m and the net debt was 0.9% lower at US$347.8m to give a gearing level of 75.8%.

Turnover from cement was down by 3.9% to US$59.1m, as the wholly-owned operations reported an 11.5% reduction to US$37.7m, but the company’s share of the Texas Lehigh joint venture rose by 13.6% to US$21.4m. As a result the trading profit fell by 35.5% to US$8.83m.  Lower cement volume and higher maintenance costs were behind the drop in profitability. Consolidated cement deliveries were down by 4.0% to 0.61Mt (0.67Mst). Volumes in the wholly-owned operations declined by 7.1%, but rose by 10.3% in the Buda joint venture. The average cement price was 0.2% lower at US$89.56/t (US$81.25/st).