Eagle’s cement profits improve

Eagle’s cement profits improve
Published: 01 February 2008

Including its share of the jointly-owned Texas Lehigh Cement, the turnover of Eagle Materials declined by 13.9% to US$677.4m, with most of the reduction coming in the plasterboard activity. As a result of the deterioration in plasterboard prices and volumes, cement is now the leading contributor to turnover.  In spite of a 23.1% increase in the cement profit, the group trading profit before corporate overheads declined by 37.7% to US$173.5m, with cement now contributing 53.9% of the group total. Corporate overheads declined by 4.3% to US$14.4m, while increased capital expenditure in the cement operations helped push the interest charge up from US$3.9m to US$13.7m. As a result, the pre-tax profit fell by 44.2% to US$139.8m. Shareholders’ funds at the end of December stood at US$434.7m, a decline of 19.1%.  
 
The turnover in cement rose by 10.5% to US$276.8m, of which the wholly-owned operations improved by 4.8% to US$204.1m while the group’s share of the Texas joint venture with HeidelbergCement advanced strongly by 30.4% to US$72.7m.  At the trading profit level, there was a 23.1% advance to US$90.5m as the wholly-owned subsidiaries increased profits by 33% compared with just 3% for the joint venture, because of some exceptional credits in the prior year period.  Total cement deliveries were 8.0% higher at 2.56Mt (2.82Mst), with the Buda joint venture advancing volumes by 28.0%, while wholly-owned tonnage was just 1.8% higher.  Thanks to the increased manufacturing capacity at Illinois Cement, and also weaker demand in some markets, the amount of cement that had to be bought from third parties declined to 0.59Mt, a 28.2% drop in the third quarter alone.  The average cement price advanced by 3.9% over the nine months to $105.90/t (US$96.07/st).