Construction materials suppliers announce third-quarter results
Vulcan, Martin Marietta Materials, HeidelbergCement and Lafarge enjoy sales volume growth but Holcim report slump
VULCAN Materials have reported that net sales reached US$88 million for the third quarter of 2013, a 13% increase over the prior year’s third quarter. Likewise, gross profit increased by 25% to US$32 million compared with the same period in 2012. Operating EBITDA also rose by 27% during the quarter, to US$180 million, compared with the third quarter of last year.
According to Vulcan, each of the company’s major product line enjoyed growth in unit shipments from the prior year, due largely to continued improvement in private construction.
Don James, chairman and chief executive officer of Vulcan, commented: ‘Our third quarter results reflect the continued recovery of our markets and the benefits of the company’s powerful earnings leverage. A 9% increase in aggregates volume helped drive a 20% rise in aggregates gross profit. In the last quarter, cash gross profit per ton of aggregates increased to US$4.83 per ton, our highest quarterly unit profitability in more than four years.’
Another reporting positive third-quarter results is Martin Marietta Materials as the company’s aggregates business experienced volume and pricing increases from all reportable segments and pricing growth in all product lines.
Ward Nye, president and CEO of Martin Marietta, explained: ‘We are pleased to report a double-digit increase in both revues and earnings in the third quarter of 2013. Our performance was driven largely by the ongoing recovery in private-sector construction activity, as well as solid execution of our long-term strategic plans and diligent management of our cost structure…The combination of a 12% increase in consolidated net sales over the prior-year quarter and our ongoing focus on controlling costs resulted in a 13% increase in earnings per diluted share.’
Meanwhile, HeiderbergCement have seen an increase in sales volumes and successful cement and aggregates price rises in principal markets, although this could not fully offset negative currency effects in the Group areas.
In the third quarter, operating EBITDA fell by 7.0% to €811 million (2012: €872 million) and operating income decreased by 6.8% to €603 million (2012: 647 million).
Despite the underperforming financial results, sales volumes improved in most business lines compared with the same period last year, thanks to the continued recovery of demand for construction materials in Europe and North America as well as sustained growth in Asian and African countries.
During the third quarter, the company’s cement and clinker sales volumes increased by 4.1% to 25.3 million tonnes, while deliveries of aggregates rose by 6.3% to 73.1 million tonnes, and sales of ready-mixed concrete increased by 4.5% to 11.0 million cubic metres. Asphalt sales volumes fell slightly by 0.6% to 2.8 million tonnes.
‘The positive development of sales volumes, prices and costs shows that we continue to be operationally well on track,’ said Dr. Bernd Scheifele, chairman of the managing board. ‘Thanks to the cost savings measures implemented at an early stage, we see a significant increases in North America and the UK. On group level, however, we had to face growing headwind in revenue and operating income in the third quarter due to the significant strengthening of the Euro.’
Holcim’s financial performance in the Q3 2013 showed an increase in net income and cash flow despite disappointing net sales development, particularly in India and Mexico. These key markets, along with Canada and, to a lesser extent, Brazil, demand for construction materials fell.
However, Holcim generated a slightly improved operating EBITDA margin. Return on Invested Capital (ROIC) before tax increased, while net financial debt was reduced by CHF1.3 billion to CHF10.2 billion from CHF11.5 billion in the third quarter of 2012.
Sales volumes for the company were down in all three segments in the first nine months of the year, with the greatest decline occurring in ready-mixed concrete.
Finally, Lafarge have reported consolidated sales during the third quarter of 2013 were down 4% to €4,236 million affected by adverse foreign exchange. At constant scope and exchange rates they grew 4% supported by higher volumes and improved prices across all product lines to address cost inflation.
EBITDA was also impacted by adverse exchange rates, notably in Brazil, India, South Africa and Canada. At constant scope and exchange rates, Q3 2013 EBITDA increased by 4%. Net income group share in the third quarter, at €304 million, remained stable compared with Q3 2012.
Bruno Lafont, chairman and chief executive officer of Lafarge, said: ‘With improving volume trends and despite the adverse effect of exchange rates, we continued to progress in the third quarter of our strategic action plant. We have reduced net debt by more than one billion Euros compared with September last year, and our cost reduction and innovation actions delivered results in line with our 2013 objectives.’
