Summit Materials Inc (SUM) Q3 2024 Earnings Call Highlights: Record EBITDA Margins Amid Weather ...

GuruFocus News
4 min read

In This Article:

  • Adjusted EBITDA Margin (Q3): 28.3%

  • Trailing 12-Month EBITDA Margin: 24.3%

  • Net Leverage: 2.2 times, down from 2.5 times last quarter

  • Return on Invested Capital (ROIC): 8.9%

  • Weather-Related EBITDA Impact (Q3): Approximately $15 million

  • Adjusted EBITDA Outlook for 2024: $970 million to $1 billion

  • Aggregate Pricing Increase: Double-digit growth expected for 2024

  • Cement Pricing Increase: Mid-single-digit organic pricing gains expected for 2024

  • Capital Expenditure (CapEx) for 2024: Approximately $400 million

  • Adjusted Diluted Earnings Per Share (Q3): $0.75

  • Aggregate Sales Volume (Q3): 15.4 million tons, up 0.7% organically

  • Aggregate Average Selling Price (Q3): $15.34, up 7.4% year-over-year

  • Cement Average Selling Price (Q3): $155.76 per ton

  • Cement Volume Decline (Q3): Down 11.3% organically

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Summit Materials Inc (NYSE:SUM) achieved record quarterly adjusted EBITDA margin of 28.3% and trailing 12-month EBITDA margin of 24.3%, demonstrating strong financial performance.

  • The company successfully executed strategic progress, including integration activities and strengthening its cement platform, with plans for Green America Recycling expansion underway.

  • Summit Materials Inc (NYSE:SUM) maintained a safety-first approach, resulting in zero safety incidents during severe weather events.

  • The company reported double-digit pricing gains in aggregates and mid-single-digit organic pricing gains in cement, contributing to sustainable margin growth.

  • Summit Materials Inc (NYSE:SUM) has substantial liquidity and is pursuing accretive aggregates-oriented acquisitions to fuel greater growth and returns.

Negative Points

  • Severe weather events, including hurricanes, led to lower volumes and higher costs, resulting in approximately $15 million in foregone EBITDA for the third quarter.

  • Organic volumes for aggregates and cement were down, with cement volumes expected to decline in the mid-single-digit range for the full year.

  • The company faced challenges in private end markets, which remain choppy and locally dispersed, impacting demand.

  • Adjusted diluted earnings per share decreased by $0.06 compared to the prior year, primarily due to higher non-cash depreciation and amortization as well as higher interest expenses.

  • Summit Materials Inc (NYSE:SUM) had to adjust its discretionary spending and recalibrate capital expenditure to align with the current volume environment.

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