Eagle Materials posts record profits in a weakening environment

In its financial year to the end of March, Eagle Materials increased its consolidated turnover by 7.3 per cent to US$922.4m and the trading profit before corporate overheads rose by 25.1 per cent to US$330.1m.  The net interest charge declined by 14.4 per cent to US$5.4m and the pre-tax was up by 26.2 per cent to US$304.3m.  Shareholders’ funds ended the year 17.5 per cent higher at US$546.0m.  

The turnover from the cement activities increased by 11.9 per cent to US$321.9m in spite of a 2.6 per cent decline in the final quarter and the trading profit improved by 17.7 per cent to US$92.2m, with cement deliveries being 1.1 per cent higher at 2.93Mt  (3.23Mst).  Cement shipments from the joint venture with HeidelbergCement at Buda, Texas, which were 3.3 per cent ahead, accounted for virtually all of the increase and the trading profit from the joint venture rose by 21.7 per cent compared with 15.6 per cent for the wholly-owned operations.  Average cement prices for the twelve month period rose by 12 per cent to US$102.66 per tonne (US$93.13/short ton) and by the final quarter were at US$105.84 (US$96.02 per short ton).  Adverse weather conditions in the final quarter reduced helped to reduce volumes in that period by 7.2 per cent and also delayed the price increase planned for January until some time in the late spring or in the summer.   

Turnover from aggregates and concrete contributed rose by 8.5 per cent to US$95.9m and the trading profit jumped by 69Mt per cent to US$16.2m.  Ready-mixed concrete deliveries were virtually unchanged at 0.67Mm³ as a result of a 5 per cent drop in the final quarter, principally in the central Texas business, but the average price improved by 14.7 per cent to US$54.91 per cubic metre.  Aggregates shipments were 14.7 per cent lower at 4.42Mt but the average price rose by 16.8 per cent to US$7.58 per tonne.   

The plasterboard business managed to increase turnover in the year by 6.8 per cent to US$511.6m, though there was a 16.9 per cent drop in the fourth quarter, when prices fell by 13.3 per cent to leave them 7.8 per cent lower over the year.  The trading profit rose by 28.4 per cent to US$198.14m in spite of a drop of a third in the fourth quarter, which illustrates the price volatility in the US plasterboard market.  Eagle Materials did better than the market in the quarter, with its volumes declining by 13 per cent compared with an 18 per cent fall in the overall market.  Eagle Materials’ paperboard division saw its annual profit decline by 5.7 per cent to US$19.0m on a turnover 1.7 per cent lower at US$74.7m.