Aggregate Industries’ US advance held back

Aggregate Industries’ US advance held back
Published: 27 July 2004

In the first six months of 2004, Aggregate Industries increased turnover by 9.4% to £732.8m (US$1,333.7m) and the EBITDA emerged 8.2% higher at £97.2m (US$176.9m).  Better weather led to an improvement in the US turnover of 13.2%, in spite of the weaker dollar and once acquisitions were included, the US business showed a 20.4% increase to £274.7m (US$500.0m) and the trading profit jumped by some 69% to £11.0m (US$20.0m).  Ready-mixed concrete deliveries were up by some 7%, while underlying increases of 9% were seen in crushed rock and of 13% for sand and gravel.  Average prices were some 3% lower in sand and gravel, but rose by around 3% for both crushed stone and ready-mixed concrete, the latter helped by higher cement prices and tight cement supply on the east coast.  With further cement price increases being scheduled for next month, ready-mixed concrete prices are likely to move ahead again.

 The British operations suffered from weaker volumes in some markets, notably the Midlands area of England, and an adverse mix, with turnover falling by an underlying 3.3%, but emerging 3.1% higher at £440.5m (US$801.7m) thanks to acquisitions, but the trading profit was still 3.5% lower at £46.6m (US$84.8m).  Blacktop volumes were some 6% lower, but ready-mixed concrete deliveries rose by 8% though margins fell by a similar percentage as the group gained market share.  The Norwegian associate Halsvik Aggregates has commissioned its second coastal quarry at Kvalsund in the north and has secured a 1.5m tonnes contract to supply a pipeline project over three years. 

 Paragon Materials, the group’s cement trading subsidiary, supplies around one-third of Aggregate Industries’ British cement requirements and also helped supply two international cement companies, hit by unexpected supply problems, during the period. There are now three import terminals in England and one in Scotland as well as a smaller Scottish terminal for internal use.  Grey cement is being supplied by Aalborg in Denmark and Teutonia near Hanover in Germany, with white cement coming from Çimsa in Turkey.