Vulcan’s Aggregates Segment Drives Second Quarter Growth

Vulcan Materials Co. announced results for the quarter ended June 30. Total revenues increased sharply from the prior year driven by double-digit growth in the company’s legacy business as well as the addition of U.S. Concrete operations.

Total revenues were $1.954 billion, up from $1.361 billion in the second quarter of 2021. For the first six months of the year, total revenues were $3.495 billion versus $2.429 billion for the first six months of 2021. 

  • Gross profit increased $48 million, or 12%, to $446 million.
  • Aggregates gross profit increased $29 million, or 8%, to $402 million.
  • Non-aggregates gross profit increased $19 million, or 78%, to $44 million
  • Includes $74 million of higher energy-related costs compared to the prior year’s quarter.
  • Average selling prices increased in each product line, helping to offset inflationary pressures.
  • Aggregates pricing increased 9% (10% mix-adjusted).
  • Average price for asphalt and concrete increased 19% and 14%, respectively.
  • Shipments increased year-over-year in each major product line, reflecting construction activity consistent with the company’s expectations as well as the contribution from acquisitions.

Aggregates segment gross profit was $402 million, an increase of 8% from the prior year. Cash gross profit per ton increased 2% to $7.99 per ton. Strong price growth and solid operational execution helped offset cost headwinds, including significantly higher diesel fuel costs ($32 million) and inflationary pressures for many other parts and supplies. 

Second quarter results also included the impacts of the unexpected and arbitrary shut down by the Mexican government of the company’s Mexico operations in early May and a $3 million unfavorable impact from selling acquired inventory after its markup to fair value.

Price growth in the second quarter was widespread across the company’s markets. Freight-adjusted pricing was $16.25 per ton, an increase of $1.32 per ton, or 9% over the prior year. Adjusting for mix impacts, average selling price increased 10%. The company expects this pricing momentum to continue throughout the remainder of the year as the second round of price increases gains traction across the company’s markets.

Total aggregates shipments increased 9%, reflecting shipment contribution from acquisitions and construction activity consistent with the company’s expectations. On a same-store basis, shipments increased 2%. Shipment activity was particularly good in many southeastern markets and Texas.  

Freight-adjusted unit cash cost of sales increased 16%, or $1.16 per ton, as compared to the prior year’s second quarter. Excluding the impact of higher diesel fuel costs and the impact of selling acquired inventory, cash cost of sales increased 8%, or $0.60 per ton.  

Tom Hill, Vulcan Materials’ chairman and chief executive officer, stated, “Our teams continued to execute well and delivered another quarter of solid earnings growth amidst a challenging backdrop. We are well on our way to delivering another year of double-digit earnings growth. We increased our aggregates gross profit by 11% during the trailing 12 months despite ongoing inflation and other external headwinds. Robust growth in aggregates pricing and a relentless focus on operating disciplines will help us carry this momentum forward. Our asphalt pricing actions, which began late last year, are increasingly offsetting sharply higher liquid asphalt costs, and we remain focused on growing our gross profit in our Asphalt segment. In concrete, leading indicators for private nonresidential construction activity and a favorable pricing environment will support earnings growth in 2022.”

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