Eagle Materials reports record 1Q results

US-based Eagle Materials revenues advance 15 per cent to a record of US$428m in the first quarter of FY20-21 (ended 30 June).

Michael Haack, President and CEO, said, “Against the backdrop of a global health crisis and unprecedented business disruption, our Company continued to perform well during the quarter, and our markets have proven to be resilient in the current environment. The integration of the Kosmos Cement Business proceeded on schedule and for the first time in Eagle’s history, we sold over two million tons of cement during a quarter. Market demand for our wallboard also remained healthy with shipments up seven per cent. Our low-cost operations continued to generate meaningful cashflow during the quarter, which, combined with the proceeds from the sale of our northern California businesses, significantly improved our balance sheet and liquidity position.”

Cement, concrete and aggregates
Revenue in the Heavy Materials sector (cement, concrete and aggregates, and the Joint Venture and intersegment cement) saw a 30 per cent surge to US$305.5m and operating earnings increased 62 per cent YoY to US$65.9m. The rise reflects record cement quarterly sales and the contribution of the recently-acquired Kosmos Cement, which represents around US$47.6m of revenue and US$10.5m of operating earnings during the quarter.

The average net sales price for cement in the FY20-21 slipped one per cent YoY to US4109.10/t although excluding the impact from Kosmos Cement, the average net sales price improved by one per cent.

Concrete and aggregates revenue increased 12 per cent YoY to US$44.1m. The company attributes the increase to the results of the concrete and aggregates business it acquired in August 2019, partially offset by the sale of its northern California concrete and aggregates businesses in the 1QFY20-21. First-quarter operating earnings saw a 22 per cent uptick to US45.4m, reflecting improved concrete sales volume and pricing as well as lower diesel costs.

Outlook
Looking ahead, Mr Haack said: “While we are very pleased with our first-quarter performance, we recognise a high level of uncertainty persists in our markets and the overall economy: despite the decline in jobless claims from the March peak, total unemployment remains historically high; state and local governments face ongoing revenue pressure, which could have the potential to constrain infrastructure budgets; and, in some geographic areas important to our business, COVID-19 case numbers continue to escalate. We are closely monitoring the disruptions caused by the COVID-19 pandemic and their possible impact on our business in current and future periods. With this in mind, we continue to enforce strict health and safety protocols to protect our employees, customers and business partners, and we will continue to manage our cash flow prudently and protect our balance sheet.”