Texas holds up better than California

Texas holds up better than California
Published: 25 September 2009

Texas Industries has reported a 28.3% drop in turnover in its first trading quarter to the end of August to US$184.0m. The EBITDA was off by 5.3% to US$30.4m and after a 47.2% rise in the net interest charge to US$13.2m, the pre-tax profit fell by 78.8% to US$3.3m.  Capital investment in the period was slashed by 93.9% to US$5.4m as further work on the Hunter cement works in Texas was suspended.  Net debt at the end of the period stood at US$510.4m to give a gearing of 63.4%. At the Texas Industries AGM next month, dissident shareholders, including Mr. N Sawiris, representing more than a quarter of the equity are seeking to change the company’s bye-laws to force the annual re-election of directors.

Cement shipments declined by 24.9% to 0.83Mt (0.92Mst) and the cement-related turnover fell by 29.8% to US$85.2m.  The average cement price was off by 6.3% to US$94.47 per tonne (US$87.73 per short ton).  Average cement prices were off by just 3% in Texas, but fell by 13% in California and the trading profit from the cement activities fell by 25.6% to US$12.4m.  This was less than the 29.8% reduction in the cement turnover and was helped by a US$1.7m gain on selling emission credits in California.  As California was hit much harder than Texas by the recession to date, the portion of cement sold in Texas rose to 71% from 69% in the same period last year.

Deliveries of aggregates dropped by34.2% to 3.1Mt (3.42Mst), however the average price was improved by 3.8%e to US$8.95/t (US$8.12Mst).  The trading profit was off by just 3.2% to US$0.4m, though turnover fell by 30.2%.  Ready-mixed concrete volumes fell by 34.2% to 0.4Mm³ (0.61Myd3), but prices advanced by a further 6.2% to US$115.71 per m³ (US$88.46m per cubic yard) and the decline in turnover was limited to 27.0%.