For the first nine months to the end of February, Texas Industries increased turnover by 5.9% to US$472.4m. After a net interest charge 29.4% lower at US$26.8m, the pre-tax loss declined by 41.8% to US$54.0m. However, a reduced tax credit meant that the net loss was just 5.5% lower at US$52.7m. The net debt at the end of February stood at US$627.3m to give a gearing level of 97.9%. Capital expenditure in the period was boosted by investment in the Hunter cement works in Texas and rose by almost 2½ times to US$96.3m.
Commenting on the results, CEO Mel Brekhus said: "Modest improvements in shipments reflect my expectation that improved construction activity will lag the broader economic recovery.”
The cement turnover improved by 11.3% to US$228.3m as cement shipments rose by 10% to 2.36Mt (2.60Mst) while the average price improved by 0.6% to US$86.10/t (US$78.11/st). The trading loss did drop by 81.3% to US$1.2m. In the third quarter, cement deliveries were stable in Texas but advanced by 22% in the California marketing area, with Texas accounting for about 69% of the company volume. Average cement prices improved by 2% in Texas, but eased by 1% in California.
Aggregates shipments were down by 8.3% to 7.55m tonnes (8.32Mst) and the average price declined by 3.0% to US$7.95/t (US$7.21/st) and the turnover from aggregates eased by 3.4% to US$121.7m. The trading profit dropped by 25.6% to US$6.2m. Group ready-mixed concrete deliveries did improve by 7.1% to 1.40Mm³ (1.84yd3) but the average price was off by 0.5% and the trading loss jumped by 62.8% to US$10.2% on a turnover that was 6.2% higher at US$183.1m.
Cement sales increased US$3.8m from the prior year period. The company’s Texas market area accounted for approximately 69% of cement sales in the current period compared to 72% the year before. Average cement prices increased 2% in the Texas market area and decreased 1% in the California market area. Shipments were comparable in our Texas market area and increased 22% in our California market area.
Brekhus added: "We continue to make good progress toward our goals of a 15% gross profit margin and SG&A expense at 8% of sales for fiscal year 2014. Efforts are ongoing throughout the company to reshape TXI in a manner that both improves our ability to serve our customers' needs and facilitates our ability to achieve our short and long-term goals.
"Finally, we remain on track to complete the construction on the expansion of our central Texas cement plant this fall. The new kiln will enhance our ability to meet the growing customer needs in this very attractive market.”
