Cement contributes 58% of Eagle Materials’ profit

Cement contributes 58% of Eagle Materials’ profit
Published: 12 May 2008

Including its share of the jointly-owned Texas Lehigh Cement, the turnover of Eagle Materials for the financial year to the end of March fell by 15.2% to US$846.7m.  The fall in US housebuilding activity has hit the plasterboard operations badly, and, as a result, the trading profit fell by 44.2% to US$184.2m, of which cement represented 57.9%.  The pre-tax profit dropped by 52.6% to US$144.4m and the net attributable profit by 52% to US$97.8m, in spite of the cement business producing its best results ever.
 
The cement turnover improved by 7.6% to US$336.2m, of which the wholly-owned operations edged ahead by 1.4% to US$239.0m but Eagle Material’s share of the Texas joint venture with HeidelbergCement rose by an impressive 26.9% to US$97.5m.  In terms of trading profit level, there was a 15.7% improvement to US$106.6m, with the subsidiaries increasing profits by 22.2% compared with just 3.7% for the joint venture.  Poor winter weather affected cement sales in Illinois, California and Nevada in the last quarter, when shipments there fell by some 12%. 

Total cement deliveries in the financial year were 5.9% higher at 3.10m tonnes (3.42Mst), with the Buda joint venture volumes rising by 23.9% to 0.95m tonnes, but the wholly-owned tonnage being virtually static.  The fuel grinding and delivery process AT Illinois Cement was improved towards the end of the year, to allow a greater usage of petcoke.  The average cement price improved by 3.1% to $105.86 per tonne (US$96.04/short ton), in spite of a slight weakening in the final quarter.  Price increases of US$5 to US$10/st were introduced in the Texas market from the 1st of April.