The second quarter of 2024 was another strong one for Summit Materials, as the company reported a net revenue increase of 58.1 percent ($395.1 million) to $1.075 billion.
The increase follows an 89.9 percent increase Summit Materials reported in the first quarter following its merger with Argos USA.
According to Summit, $464 million of net revenue was due to acquisitions, primarily the Argos USA transaction. This greatly offset its $46.6 million net revenue decrease related to divestitures. Organic prices increased across all business lines, the company adds.
Summit’s operating income increased in the second quarter to $172.9 million, a 33.4 percent increase that was largely due to the Argos USA transaction, the company says.
The company’s adjusted EBITDA increased 54.5 percent ($104.4 million) to $296.2 million, reflecting the contribution from the Argos USA assets, continued pricing gains and operational improvements across the enterprise – including integration synergies.
“We are pleased and proud to report that our teams safely and successfully managed through weather-related disruptions to deliver a strong quarter of strategic execution and solid financial results,” says Anne Noonan, Summit Materials president and CEO. “Our resilient performance was supported by positive pricing momentum across all lines of business, ongoing cost savings initiatives underway across our network and a more durable portfolio. As a result, our 2024 financial targets are virtually unchanged. Namely, we are still on track to generate at least $40 million of Argos USA synergies, drive significant pro forma margin expansion this year, and confidently deliver 2024 adjusted EBITDA within our previous guidance range.
“Without question, Summit Materials is well positioned to capitalize on a constructive pricing environment and tap operation improvements across our enterprise to profitably grow in an uneven demand environment,” Noonan adds. “This growth, together with a fortified and capable balance sheet, will help generate significant shareholder value this year and the years ahead. Our team remains focused on controlling what we can, acting with agility and delivering on all of our 2024 stakeholder commitments.”
Summit’s performance in aggregates
Summit’s aggregate business made several gains in the second quarter.
According to Summit, its second-quarter net revenue in aggregates increased by $4.6 million to $187.1 million. Adjusted cash gross profit margin related to aggregates was 54.1 percent higher in the second quarter, as compared to 53.6 percent in the prior-year period.
Despite these gains, Summit’s aggregate sales volumes decreased 10 percent in the second quarter. Organic aggregate sales volumes decreased 9.4 percent as a result of wet weather conditions and restrained private end-market activity, the company says.
Summit’s average selling prices for aggregates increased 11.8 percent, with organic pricing increasing 10.8 percent.
Pricing growth was strong throughout the company’s footprint, Summit says, but growth was led by its East segment, which increased 14.8 percent versus the prior-year period.
