Vulcan Materials Co. announced results for the quarter ended June 30, reporting total revenue of $2.014 billion versus $2.113 billion for the same period in 2023. Year to date, the company is reporting total revenue of $3.560 billion, versus $3.762 billion in the first half of 2023.
Second quarter segment aggregates gross profit increased 6% to $529 million ($8.79 per ton), and gross profit margin expanded 120 basis points. Cash gross profit per ton improved 12% to $10.92 per ton. Continued pricing and operational execution drove margin expansion despite lower shipments and challenging weather conditions throughout the quarter.
Aggregates shipments decreased 5% as compared to the prior year’s second quarter as a result of significant rainfall in many key markets, particularly in Texas and across the Southeast.
Price growth in the second quarter was strong with all markets realizing year-over-year improvement. Freight-adjusted selling prices increased 12% (mix-adjusted 11%) as compared to the prior year.
Challenging weather conditions also impacted operating efficiencies and contributed to the year-over-year increase in freight-adjusted unit cash cost of sales in the quarter. On a trailing-12-months basis, unit cash cost has increased 10%.
Tom Hill, Vulcan Materials’ chairman and chief executive officer, said, “Our aggregates-led business delivered another quarter of earnings growth and margin expansion. Even with significant rainfall disrupting construction activity and operating efficiencies, our aggregates cash gross profit per ton increased 12%. Gross profit margin expanded 120 basis points. These results demonstrate our consistent execution and the durable characteristics of our business. The construction environment remains supportive of continued aggregates price growth, and our focus remains on compounding aggregates unit profitability to drive earnings growth and strong cash generation.”
Regarding the company’s outlook, Hill said, “Significant weather disruptions throughout the first half of the year impacted both construction activity and operating efficiencies, resulting in adjustments to our aggregates volume and cost outlook for the full year. Despite the challenging environment, aggregates cash gross profit per ton has increased double-digits this year, and we expect this trend to continue for the remainder of the year. The pricing environment remains positive, and overall demand fundamentals continue to underpin long-term growth.”
Management expectations for 2024 include the following:
- Continued improvement in Aggregates segment cash gross profit per ton ($9.46 in 2023).
- Total shipments down 4% to 7% (234.3 million tons in 2023).
- Freight-adjusted price improvement of 10% to 12% ($19.00 in 2023).
- High-single digit increase in freight-adjusted cash cost (freight-adjusted price less segment cash gross profit per ton; $9.54 in 2023).