St. Lawrence Cement Group Inc reported a 9.2 per cent decline in fourth-quarter earnings, due to a lower-than-expected contribution from construction materials as a result of poor weather in December. In a press release, the company also noted that it had "exceptionally strong" sales in December 2003 in this segment.
It said fourth-quarter operating profit declined to C$36.9m from C$42.2m a year earlier, due to the unfavorable sales mix, additional costs associated with an unscheduled production shutdown at the Mississauga, Ontario cement plant, and an early start to annual maintenance in its concrete and aggregates business units.
For the full year, net income rose to C$67.2m or C$1.61 a share from C$65.4m or C$1.58. Sales were C$1.28bn, up 11 per cent from C$1.15bn.
The improvement was driven mainly by higher cement prices in all markets, higher sales volumes of aggregates and increased construction services revenues. It said it was unable to take full advantage of strong cement demand in its US markets due to the unavailability of imported cement at competitive prices. As well, the weaker US dollar resulted in a negative impact of C$19.6m on the US division’s sales.
The company said 2005 results "will depend on a pick-up in activity in the office, industrial and institutional markets to compensate for an anticipated decline in residential construction compared to the record numbers achieved in 2004. Our industry is also facing margin pressure from the escalation in energy costs, a significant component in our cost of sales. Overall, our objective for 2005 is to at least match the 2004 growth in operating profit".