Eagle Materials Manages to improve profits

Eagle Materials Manages to improve profits
Published: 23 October 2009

Eagle Materials’ turnover, including its share of the Texan cement joint venture with HeidelbergCement, fell by 26.6 per cent to US$299.5m for the six months of the end of September, while margins did recover and the trading profit was off by just 5.5 per cent to US$55.1m.  Other expenses were 1.9 per cent higher, but the net interest charge dropped by 39.3 per cent to US$11.2m, leaving the pre-tax profit 4.5 per cent higher at US$34.7m. 

Turnover from cement was down by 21.5 per cent to US$132.1m, with the wholly-owned operations declining by 15.0 per cent to US$98.7m, but the group’s share of the Texas Lehigh joint venture, dropped by 35.9 per cent to US$33.4m against a strong first half last year.  The trading profit declined by 21.3 per cent to US$39.1m, with the joint venture in Texas seeing its contribution fall by 26.2 per cent, but wholly-owned businesses reduced the profit contribution by a somewhat more modest 18.9 per cent.  Group cement deliveries declined by 13.4 per cent to 1.31m tonnes (1.44m short tons), with the Buda joint venture seeing volumes fall by 30.9 per cent, compared with a 5.4 per cent reduction in the wholly-owned tonnage.  The amount of cement bought in from third parties continued to dwindle. The average cement price declined by 10.3 per cent to US$96.22 per tonne (US$87.29/short ton). 

Turnover from aggregates and ready-mixed concrete was down by 29.0 per cent to US$28.2m and the trading profit fell by 54.5 per cent to US$1.8m.  Aggregates shipments fell by 30.5 per cent to 1.32m tonnes (1.46m short tons), and the average price was 3.3 per cent lower at US$7.04/t.  Ready-mixed concrete deliveries fell by 20.2 per cent to 0.22 m³, and the average price was 7.6 per cent lower at US$89.15 per
.   

Turnover in the plasterboard and related activities fell by 29.1 per cent to US$139.0m and a return to profitability in plasterboard enabled a US$14.1m trading profit to be achieved.  Plasterboard deliveries fell by 24.0 per cent to 84.9Mm², but the average plasterboard price did still improve by three per cent fell by 21.7 per cent.  The paperboard activities within this heading managed to improve profitability by 16.7 per cent.