Vulcan boosts first-quarter EBITDA by 36%

Vulcan boosts first-quarter EBITDA by 36%
Published: 30 April 2012

Vulcan Materials' first quarter turnover showed a 10.0% recovery to US$535.9m and the EBITDA recovered by 36.4% to US$34,0m, but at the underlying level there was a near nine-fold increase to US$46.1m. At the trading level the seasonal loss narrowed by 24.4% to US$46.3m. After deducting a net interest charge that was 23.7% higher at US$52.3m, the pre-tax loss was 6.5% lower at US$95.4m and the net attributable loss was 4.9% lower at US$52.1m. Net debt at the end of March was 1.1% lower than a year earlier at US$2,623.3m to give a gearing of 70.0%. As a result of the unsolicited approach by the smaller Martin Marietta Materials, a profit enhancement and asset sale programme has been instigated. Martin Marietta Materials is currently the fourth largest US aggregates producer behind market leader Vulcan and two European-based groups.

Aggregates shipments in the quarter showed a 10.5% recovery to 26.72Mt (29.45Mst), but the average price eased by 0.8% to US$11.30/t (US$10.25/st) while the aggregates turnover improved by 7.3% to US$355.6m. Volume increases in double digits were achieved 10 states, notably in California and in Virginia, but also in other important states to Vulcan such as Texas, Alabama and Florida. Road works constituted an important source of the increased volume, but private construction was also ahead, and helped by favourable weather in the period. The lower average price reflected a less favourable product mix. For the full year, Vulcan expects aggregates shipments to improve by around 3%.  Pricing is expected to improve by between 1% and 3%, while lower costs should further increase the profitability.

Ready-mixed concrete deliveries recovered by 12.2% to 0.74Mm³ and prices improved by 0.8%, while asphalt deliveries rose by 3.5% and prices advanced by 5.5%. Full year ready-mixed concrete volumes forecast to be ahead slightly higher, as should prices, while in asphalt prices are expected to increase on modestly higher shipments. Vulcan's cement shipments improved by 23.3% to 197,000t, with third party sales just over doubling to 98,000t. The average cement price improved by 2.9% to US$86.29/t (US$78.28/st) and the cement turnover recovered by 24.1% to US$20.5m.  For the full year, the cement business should approach the break-even point.