Vulcan Materials Co. announced results for the quarter ended Dec. 31, 2020, and the full year. Total revenues in the fourth quarter were $1,175.1 billion, down from $1,186.2 billion in the fourth quarter of 2019. Total revenues for the full year were $4,856.8 billion down from $4,929.1 billion in 2019.
Fourth quarter Aggregates segment gross profit increased to $276 million due to growth in pricing and effective cost control, despite a 1% decline in shipments. Gains in unit profitability were widespread and marked the fourth consecutive quarter of growth in gross profit per ton.
For the full year, gross profit per ton increased 5%, despite 3% lower volumes. This growth marks the 10th consecutive quarter of year-over-year improvement in the company’s trailing-12-month unit profitability.
The pricing environment continues to be positive across the company’s footprint. On a mix-adjusted basis, all of the company’s markets reported full-year price growth. For the year, mix-adjusted pricing increased 3.1% (reported freight-adjusted sales price increased 3.2%) despite a 3% decline in shipments. For the quarter, mix-adjusted sales price increased 1.8%, and reported freight-adjusted pricing increased 3.3%.
Fourth quarter operating efficiencies and lower diesel fuel costs helped to mitigate increased spending to remove overburden ahead of future shipments and the timing of repair costs. The Aggregates segment earnings impact from lower diesel fuel cost was $8 million in the quarter.
For the full year, freight-adjusted unit cost of sales increased 2% and 1% on a cash basis. Flexible operating plans, disciplined cost control, and lower diesel fuel costs mitigated the impact of operational disruptions caused by the pandemic during the year.
Tom Hill, chairman and chief executive officer, said, “Our best-in-class aggregates business, along with the efforts and dedication of our employees, allowed us to overcome COVID-19 related disruptions in 2020. Most impressive, we delivered year-over-year gains in aggregates unit profitability throughout each quarter in 2020. Our ability to leverage Vulcan’s four strategic disciplines enabled us to expand unit margins, deliver improved cash flows, and increase returns on invested capital. Our team’s hard work along with Vulcan’s leading market positions and strong financial footing will enable us to capitalize on an improving demand outlook in 2021.
“Construction employment gains in key markets are a positive signal that activity levels are recovering across our footprint, as compelling fundamentals in residential construction support growing demand in 2021,” Hill continued. “Shipments into private nonresidential continue to benefit from growth in heavy industrial projects such as data centers and warehouses, while construction starts in other categories remain below the prior year. Recent improvements in highway lettings and contract awards indicate growing confidence and visibility fueling advancement of planned projects, particularly in the second half of 2021. The pricing environment remains positive, and we continue to execute at a high level, positioning us well for 2021. We expect our 2021 Adjusted EBITDA will range between $1.340 billion to $1.440 billion.”
In Vulcan’s other segments:
Asphalt segment gross profit increased 53% to $17 million in the fourth quarter. The year-over-year improvement was driven by higher material margins (sales price less unit cost of raw materials). Segment earnings benefited from price discipline and effective cost containment, including lower liquid asphalt costs. Shipments in the current year’s quarter were lower than the prior year, as prior-year shipments included certain large projects in the Arizona and Tennessee markets.
Fourth quarter Concrete segment gross profit increased 28% to $9 million as a result of higher material margins. Shipments decreased 12% versus the prior year, and average selling prices increased 2% compared to the prior year. Fourth quarter shipments were impacted by the lingering effects of cement supply shortages in Northern California.
Calcium segment gross profit was $1.2 million versus $0.8 million in the prior-year quarter.