Eagle Materials manages two cement price increases in six months

Eagle Materials manages two cement price increases in six months
03 November 2005

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. 

Published under Cement News