Polaris Materials Corp. reported preliminary sales volumes for the quarter and nine months ended Sept. 30, 2017, and further increased its full-year sales expectations.
Sales volumes in the third quarter were 973,000 tons, an increase of 50 percent over the second quarter of 2017, and broadly in line with its expectations for the quarter.
Two ships with total freight of approximately 160,000 tons were under way to the San Francisco Bay area at the end of the quarter, but did not arrive in time to be counted as sales in the third quarter. Had these ships arrived as per the original nominated schedule, third quarter volumes would have been at the top end of expectations, according to the company.
Year-to-date sales volumes are 2.18 million tons, compared to 2.27 million tons in the first nine months of 2016. Sales volumes year-to-date are 4 percent below 2016, but grew by nearly 18 percent year-to-date on a like-to-like basis (excluding the impact of the conclusion of the Hanson contract), and would have been up by 3 percent had the above-noted ships arrived according to the original commitment dates.
Volumes in its Long Beach terminal continued to climb, with sales of 103,000 tons during the quarter and 243,000 tons year-to-date. Delays in ramp-up at Silver Lake and the Los Angeles Rams stadium continued to impact demand, however “we have added several additional projects to the schedule in the fourth quarter and currently have nearly 200,000 tons scheduled for delivery to Los Angeles during the balance of the year,” the company said.
“We are pleased to confirm our second sale of fine sand occurred in the quarter, with a shipment being delivered to Hawaii in September, and a third shipment currently scheduled for December 2017. Our Orca Quarry team continues to operate safely and has now passed 760 days of operations without a lost time incident,” the company said.
The company added, “We now expect full year sales volumes to be 3.2 to 3.4 million tons, a 6-12 percent increase from 2016 and a 400,000 ton increase from our initial expected range for 2017. The increase is primarily driven by improved market share in San Francisco, as local supply continues to see significant constraints to availability.”
Current sales expectations for the fourth quarter of 2017 are in the range of 1.1 to 1.3 million tons, consistent with increased full-year expectations. In addition to the two ships that were in transit to the San Francisco Bay Area, another 14 ships are committed to deliveries to San Francisco, Los Angeles and Hawaii during the fourth quarter, for a total of 16 deliveries scheduled during the quarter. The company said it continues to focus on managing operating costs while positioning the business to meet significantly increased demand.
“The third quarter was among our best quarters operationally, although we were disappointed that vessel scheduling issues led to two shipments arriving past the end of the quarter,” said Ken Palko, president and CEO. “Ongoing developments in the San Francisco Bay area have contributed positively to our volume expectations, and mean that the fourth quarter and full-year 2017 have the potential to be among our best ever. We are proud of the work that our team has done to position us as a premier construction aggregate producer with real strategic value.”