Vulcan generates strong profit recovery

Vulcan Materials' first-half turnover rose by 6.9 per cent to US$1365.6m and the EBITDA advanced by 27 per cent to US$211.7m.

The trading profit jumped from US$36.8m to US$297.9m and after a net interest charge 55.0 per cent higher at US$160.6m, the pre-tax result went from a US$64.2mloss to a profit of US$141.9m. The net attributable earnings line went from a negative US$26.1m to a positive US$100m.

Capital investment jumped by 93.7 per cent to US$116.3m, having advanced by 78.8 per cent this stage last year. Net debt was reduced by 27.3 per cent to US$1,778.9m, giving a gearing level of 43.5 per cent compared with 64.2 per cent a year earlier.

Turnover from aggregates improved by 15.3 per cent to US$999.9m, with external sales being 15.7 per cent ahead. The total volume advanced by 8.7 per cent to 66.48Mt (73.276m short tons), with the external tonnage rising by 10.1 per cent to 62.17Mt. The average price achieved was 2.6 per cent higher at US$12.15 per tonne. The second quarter saw growth rates exceeded 15 per cent in Georgia, Illinois, North Carolina, Texas and Virginia and it reached 12 per cent in Southern California and 11 per cent in Florida. For the full year, Vulcan is expecting aggregates deliveries to rise by between 7 per cent and 9 per cent and prices to increase by between 3 per cent and 5 per cent.

Ready-mixed concrete and concrete products turnover declined by 13.8 per cent to US$189.8m, reflecting the sale of the Florida concrete operations in March. In the continuing business there was an 11.8 per cent increase to US$157.1m. Reflecting this disposal, ready-mixed concrete deliveries were 15.4 per cent lower at 1.46Mm³ while the average price was 5.3 per cent ahead at US$127.01/m³. Sales of asphalt mix generated a turnover 14.1 per cent higher at US$190.8m, but the average price declined by 1.6 per cent to US$58.77 per tonne on volumes were 8.8 per cent ahead at 2.99Mt. For the full year, Vulcan estimates that the concrete and asphalt operations will make a gross profit of about three times the level seen in 2013.

Vulcan's cement turnover for the period that it was included amounted to US$10.8m, a reduction of 54.7 per cent. Cement deliveries were 66.1 per cent lower at 156,000 tonnes, but the average price in the period that it was consolidated showed an 11.6 per cent improvement to US$101.97 per tonne (US$92.51 per short ton). The calcium business has been retained and this generated a second quarter turnover of US$2.2m.