In the six months to the end of September, Eagle Materials increased turnover by 36.1% to US$426.9m, helped by Illinois Cement Company now being a subsidiary rather than an associate. The group trading profit increased 43.1% to US$118.7m, boosted by higher prices and volumes across all divisions. In spite of a 79.2% increase in interest payments, principally relating to the purchase of the remaining 50% of Illinois Cement Company, the pre-tax profit still recorded a 42.4% advance to US$115.9m.
The cement business, including associates – now limited to Texas Lehigh Cement, saw turnover increase by 35.5% to US$150.6m and the profit contribution rose by 29.7% to US$38.7m. Total cement volumes registered a 19.0% increase to 1.62Mt (1.79Mst), with wholly owned deliveries being 66.7% higher at 1.23Mt as a result of the Illinois Cement Company deal.
An increase in the amount of cement acquired to almost 0.4Mt had a negative effect on margins, which was to a large extent offset by being able to increase prices ahead of the rise in costs. Following a US$5 per short ton price increase in most of its markets on the 1st of April, further price increases of between US$3 and US$5 per short ton were implemented between July and October. The average price achieved in the six months was 16.4% higher than in the comparative period last year at US$80.54/st, the equivalent of US$88.77/t. The rising trend in cement prices is illustrated by a 14.9% increase in the group’s first quarter being followed by a 17.8% increase in the second quarter compared with the corresponding periods last year.