Summit Materials Inc. announced results for the first quarter ended April 1, reporting net revenue of $407.3 million, versus $392.5 million in the first quarter of 2022, a 3.8% increase.
Aggregates Segment net revenues increased by $20.3 million to $143.7 million in the first quarter. Aggregates adjusted cash gross profit margin decreased to 35.0% in the first quarter as compared to 36.3% in the prior year period. Aggregates sales volume decreased 6.2% in the first quarter due, in part, to divestitures in the East Segment.
Organic aggregates sales volumes declined 3.4% due to unfavorable weather conditions and residential softness in the West Segment that more than offset organic aggregates volume growth from the East Segment. Average selling prices for aggregates increased 20.5%, the strongest quarterly growth rate in the company’s history. Growth was witnessed across all markets and led by the strongest gains in Texas and the Intermountain West.
Cement Segment net revenues increased 17.1% to $54.1 million in the first quarter. Cement Segment adjusted cash gross profit margin increased to 9.6% in the first quarter, compared to (2.0)% in the prior year period as strong pricing gains coupled with a greater contribution from Green America Recycling more than offset higher variable costs. Sales volume of cement decreased 1.2% reflecting, in part, lower import volume. Average selling prices increased 14.8% in the first quarter due to January pricing actions and the compounding impact from price increases implemented in 2022.
“It’s clear by our record first quarter results that we have a solid head start as we enter the prime construction season,” commented Anne Noonan, Summit Materials president and CEO. “As expected and due to January pricing actions, we witnessed significant pricing momentum across each of our lines of business and in all of our markets. Those pricing gains, coupled with demand resiliency and solid operational execution, fueled our second consecutive quarter of year over year margin growth. This early performance, together with stronger pricing and improved demand expectations gives us the confidence to raise our full year Adjusted EBITDA outlook. And while second half visibility is challenging, particularly when it comes to residential demand, supply chain constraints, and uncertain cost trends, we feel we have enough within our control to deliver on these upgraded financial commitments for 2023.”
Scott Anderson, executive vice president and CFO of Summit Materials added, “On top of our first quarter financial progress, we continue to press forward on our strategic goals. Our commercial and operational excellence initiatives are well underway and expected to produce margin-enhancing results this year. Consistent with our Elevate Summit plan, we are pursuing a capital allocation strategy that prioritizes growth. Organically, that means continued investment in high-growth greenfields and capital projects with attractive return profiles. Inorganically, that means leveraging a fortified balance sheet to strengthen the portfolio via M&A in an approach I’d characterize as price-disciplined and value-creative. These avenues, I believe, represent our greatest growth opportunities and alongside solid execution can drive attractive returns for Summit shareholders.”