Vulcan’s volumes fall, but prices rise

Vulcan’s volumes fall, but prices rise
Published: 10 February 2009

Vulcan Materials increased turnover by 9.7% last year to US$3651.4m, helped by a full year’s contribution from Florida Rock, compared with only six weeks in the previous year.  The turnover from aggregates was off by 1.7% to US$2404.5m, while the asphalt and ready-mixed concrete sales figure rose by 56.8% to US$1201.2m thanks to the addition of Florida Rock, that also gave rise to a cement turnover of US$106.5m.  The EBITDA declined by 9.6% to US$886.5m and the trading profit fell by 29.8% to US$501.8m, while the pre-tax profit dropped by 50.9% to US$327.7m.  Shareholders’ funds at the end of the year were 0.7% ahead at US$3,784.4m. 

Aggregates shipments for the year declined by 11.7% to 185.3Mt (204.25Mst), but average prices improved by 6.7% to US$11/t.  That was the third year in a row of declining aggregates volumes, which are now some 30% below their peak. Except for the Gulf Coast area, shipments were lower in all markets. Asphalt sales were off by 9.5% to 8.65Mt, while ready-mixed concrete deliveries rose by 45.7% because of Florida Rock to 4.86Mm³, though at the underlying level, ready-mixed concrete shipments were well down.  The cement business, that came with Florida Rock, sold 0.94Mt, of which 42.7% were for third parties and the rest being used within the group.  The average cement price achieved was US$106.65/t (US$96.75/st), an increase of 3.1%.

For the current year, Vulcan Materials is expecting underlying aggregates prices to increase by something in the region of 7%, but volumes are expect to decline by a further 5% to 10%, before the possible effects of the economic stimulus bill currently being considered by Congress.  That bill might provide some improvement in demand during the second half, but likely to more of have an effect in 2010.