Eagle’s cement profits fall 27%

Eagle’s cement profits fall 27%
Published: 28 January 2010

Including its share of the jointly-owned Texas Lehigh Cement, the turnover of Eagle Materials for the first nine months of the trading year fell by 26.4% to US$569.6m. 

The group trading profit before corporate overheads was down by 20.8% to US$69.4m, with cement contributing 75.7% of this.  Corporate overheads were reduced by 12.7% to US$12.3m and in the net interest charge declined by 28.8% to US$16.9m. 

Thanks to these reduced expenses, the reduction in the pre-tax profit was limited to 19.3% to US$40.2m.  Shareholders’ funds at the end of December stood at US$449.2m, a 5.8% improvement compared with a year earlier.

Turnover in cement fell by 26.8% in the period to US$184.6m, of which the wholly-owned operations saw a 16.1% reduction to US$135.9m, while the group’s share of the Texas joint venture with HeidelbergCement recorded a sharper decline as the downturn hit Texas later than other parts of the country and reported a 35.9% drop to US$48.7m.  The profit reduction at the trading level amounted to 26.8% to US$52.5m. 

Cement deliveries attributable to the group were 14.4% down at 1.84Mt (2.03Mst), with volumes at the Buda joint venture falling by 30.8%, compared with a reduction of 6.0% for the subsidiaries.  The amount of cement bought in from third parties has continued to decline and is now down to less than 1% of the volume sold. 

The average cement price achieved over the first nine months declined by 10.6% to US$95.17 per tonne (US$86.34/short ton), with the price for the third quarter being 11.6% lower than a year ago at US$92.60 (US$84.01 per short ton).