Vulcan Materials Co. announced results for the quarter ended December 31, 2019, noting that higher segment earnings in Aggregates and Asphalt helped drive 15 percent year-over-year growth in the company’s fourth quarter earnings from continuing operations.
Full year revenues were $4.9 billion, up 12 percent as compared to the prior year, and net earnings were $618 million, an increase of 20 percent. Adjusted EBITDA increased 12 percent to $1.27 billion. At year end, total debt was $2.8 billion, or 2.2 times trailing-twelve month Adjusted EBITDA.
“2019 marks another year of strong earnings growth and cash generation. We are particularly proud of our people who worked hard to achieve these results while ensuring another year of world-class safety performance,” said Tom Hill, Vulcan chairman and CEO, in a press release. “Widespread improvements in pricing helped drive 8 percent growth in our industry-leading unit profitability and double-digit growth in Adjusted EBITDA, a strong result despite some higher-than-expected costs in the fourth quarter. Industry leadership in safety and pace-setting unit margins are both evidence of our strong and healthy business. Going forward, our compounding unit margins and our disciplined capital allocation position us to increase our cash flows and improve our return on invested capital again in 2020.”
Fourth quarter sales increased 10 percent, while gross profit grew 7 percent to $275 million or $5.32 per ton. Fourth quarter aggregates shipments increased 4 percent compared to the same quarter a year prior. The freight-adjusted average sales price increased 5.5 percent to $13.96. The fourth quarter was negatively impacted by higher repair and maintenance costs, geographic volume mix including higher sales volumes in rail-served remote markets, and lower tipping fees for clean fill.
For the full year, segment sales increased 14 percent, driven by volume growth of 7 percent and price growth of 5.6 percent. The freight-adjusted price per ton for the full year was $13.99. Gross profit increased 16 percent, and unit profitability grew by 8 percent to $5.32 per ton. Cash gross profit for the year was $6.74 per ton.
“Looking ahead, demand in our markets will continue to benefit from higher levels of highway funding and continued growth in residential and nonresidential markets,” Hill said. “This visibility into demand growth has already set the stage for solid price improvement in 2020. Price improvement coupled with our four strategic initiatives (Commercial and Operational Excellence, Logistics Innovation and Strategic Sourcing) should continue to increase unit profitability.”