The company says the year-over-year earnings improvement was driven primarily by effective cost control and price growth in aggregates.
Total revenues were US$1.323m versus US$1.328m in the second quarter of 2019. Year-to-date revenues were US$2.372m versus US$2.324m in the first six months of 2019.
Aggregates segment sales were US$1.071m for the quarter, versus US$1.062m for Q2 2019. Year-to-date aggregates segment sales were US$1.938m versus US$1.897m in the first six months of 2019.
Vulcan Materials chairman and CEO Tom Hill said the results demonstrate the resiliency of the company's aggregates-led business and reflect the proactive response by its employees to the COVID-19 pandemic.
Our operational execution was integral to widespread gains in unit profitability, despite some disruptions to construction activity during the quarter," said Hill. "I am proud of our employees' ability to quickly adapt to the necessary additional safety protocols we have put in place in this environment, while maintaining their focus on operating safely and positioning Vulcan for continued success."
Adjusted EBITDA was US$408m in Q2, an increase of 10%. Second quarter segment earnings improved in each major product line. Despite a 2% decline in aggregates shipments, mix-adjusted pricing improved 3.3%, and freight-adjusted unit cost of sales decreased 1%. As a result, aggregates unit gross profit increased 9% to US$6.25 per tonne.
Hill added: "Certain leading indicators of demand have shown signs of improvement, and our quote activity remains robust. However, our visibility beyond the near-term remains restricted due to the evolving effects of the pandemic. The recent surge in new COVID-19 cases could impact the progress made so far if new restrictions on economic activity are put in place. We believe this uncertainty could continue to weigh on construction activity in the second half of the year, making it difficult to predict the level and timing of shipments."
Second quarter aggregates shipments were 2% lower than the prior year's second quarter. Shipping patterns varied widely across the Company's footprint as a result of economic uncertainty and wet weather but were generally supported by healthy backlogs and our essential business status in our markets. Key markets in the Southeast and coastal Texas were negatively affected by wet weather while shipments in California were reduced by tighter restrictions on shelter-in-place. Shipments were higher in Georgia, Illinois, Tennessee and Texas. On a mix-adjusted basis, all of the Company's key markets reported year-over-year price growth. For the quarter, freight-adjusted average sales price increased 3 percent versus the prior year's quarter, inclusive of 30 basis points of unfavorable mix.
The asphalt segment gross profit was US$30m, an improvement of US$3m from the prior year. The year-over-year improvement was driven by higher material margins (sales price less cost of raw materials). Although asphalt volumes in the second quarter declined 5% versus the prior year, Vulcan says it captured the benefit of lower liquid asphalt costs.
Concrete segment gross profit was US$14m compared with US$13m in the prior year's second quarter. Shipments decreased 4% versus the prior year, and average selling prices increased 1% compared to the prior year.
Calcium segment gross profit was US$0.7m, down slightly from the prior year quarter.
Regarding the company's outlook, Hill stated: "Although the economic environment is showing signs of improvement, the pandemic's effect on demand and the broader economy remains unclear. As a result, we are not reinstating earnings guidance at this time.
"While demand is subject to market fluctuations outside of our control, we remain focused on those things we can control such as our cost and our pricing discipline, both of which help to compound our unit margins. Our year-to-date results demonstrate those capabilities. On a trailing-twelve month basis our cash gross profit in aggregates is nearly US$7 per tonne."
