Vulcan Materials reports on strong aggregates sector in 2Q23
Vulcan Materials Co has announced total revenues of US$2113m in the second quarter of 2023, up from US$1954m in the same period a year earlier. Adjusted EBITDA has come in at US$595m in the 2Q23, compared to US$450m in the year-ago period, while gross profit has advanced from US$446m in the 2Q22 to US$583m in the same quarter a year later.
Tom Hill, Vulcan Materials’ chairman and CEO, said, “Our earnings growth through the first half of 2023 reflects the compounding benefits of the consistent execution of our strategic disciplines and the strength of our aggregates-led business. Aggregates gross profit margin has expanded 230 basis points, and cash gross profit per ton has improved 23 percent to US$8.98/t. Strong sales and operating momentum across our business is expected to carry through the rest of the year. Shipments have benefitted from large industrial projects, and residential construction activity has been better than expected. As a result, we now expect to deliver full-year adjusted EBITDA of US$1.9bn to US$2bn, an increase of US$150m compared to our initial expectations communicated in February.”
In the aggregates business, gross profit increased 24 per cent to US$499m (US$7.87/t) while the gross profit margin expanded by 290 basis points. This improvement was attributed to strong pricing growth and improving efficiencies from the company’s operating disciplines. Aggregates shipments fell one per cent YoY. Shipment activity in California was particularly strong, following the weather-impacted first quarter, while certain markets in the southeast benefitted from healthy shipment activity to industrial projects. Freight-adjusted selling prices increased 15 per cent, or US$2.44/t, compared to the prior year, with all markets reporting a YoY improvement.
The asphalt segment saw gross profit of US$57m, an increase of US$43m on the 2Q22, driven by a combination of strong shipment growth, continued pricing momentum and lower liquid asphalt cost. Shipments increased 16 per cent on the back of solid growth in Arizona and California, the company’s largest asphalt markets. Pricing increased nine per cent, or US$6.10/t, with improvements seen across all markets.
Gross profit in the concrete business came in at US$27m, with unit gross profit improving 22 per cent, or US$2.35/yd3, despite lower shipments. Second-quarter shipments were impacted by the prior year divestiture of the company’s operations in New York, New Jersey and Pennsylvania, and the slowdown in residential construction activity.
