Summit full-year income up 32.7%

For the 12 months ended 31 December, Summit Materials Inc reported basic and diluted earnings per share of US$0.53 on net income of US$36.8m up 32.7 per cent YoY. For the same 12-month period, the US-based producer reported adjusted net income of US$98.3m.

For the three months ended 31 December 2016, it reported a basic loss per share of ($0.00) on a net loss of (US$0.3). For the same three-month period, Summit reported adjusted diluted earnings per share of US$0.21 on adjusted net income of US$21m.

"Our leading positions in well-structured, early-cycle markets drove sustained margin expansion throughout all lines of business in 2016, as both gross margin and Adjusted EBITDA margin increased to record levels. Adjusted EBITDA exceeded the high-end of our guided range for the full-year, given sustained growth in materials pricing, contributions from completed acquisitions and improved cost efficiencies,” Tom Hill, CEO of Summit Materials, said.

Last year, the company's cement segment saw adjusted EBITDA increased 51 per cent to US$113m, versus US$74.8m in 2015. Adjusted EBITDA margin increased to 40.2 per cent in 2016, up from 38.3 per cent in 2015. A YoY increase in average selling prices, increased sales volumes due to the acquisition of the Davenport cement assets in July 2015, improved production efficiencies and continued cost reductions all contributed to improved full-year results, it said.

Cement net revenues increased 49.3 per cent to US$250.3m in 2016, when compared to the prior year period. Cement gross profit as a percentage of cement segment net revenues was 45.1 per cent in 2016, more than 220 basis points higher YoY. Sales volumes and the average sales price increased 37 per cent and 7.5 per cent, respectively compared to the previous year. Cement volumes increased on a YoY basis as a result of the Davenport acquisition in July 2015, while cement prices improved as a result of favourable overall market conditions.

“Our cement business represents a clear catalyst for growth heading into 2017,” continued Mr Hill. “Limited domestic production capacity and continued growth in US demand have combined to create opportunities for sustained growth in industry cement pricing. During the fourth quarter, our cement segment generated organic price and volume growth of 6.8 per cent and nearly one per cent, respectively. Looking ahead to the remainder of 2017, we anticipate continued Adjusted EBITDA growth in our cement business, as supported by sustained growth in organic cement prices and sales volumes along the Mississippi River corridor.”

“Following the recent election cycle, we have entered a new era of bipartisan support for funding that will help to properly maintain and modernise our nation’s aging transportation infrastructure,” continued Mr Hill. “Given that nearly 40 per cent of our net revenue is derived from public infrastructure work, Summit is well positioned to benefit from this opportunity. With the support of appropriations from the FAST Act, we anticipate an acceleration in state-level infrastructure spending beginning in mid-to-late 2017. Further, given ongoing advocacy by Congress and the current Administration for increased investment in state transportation infrastructure, we see numerous opportunities for multi-year growth in our public-facing businesses,” he added.