Granite Construction’s aggregates business is doing well. The group’s “construction materials” division upped revenues by 27.5% year-on-year in the second quarter of 2018 despite the company as a whole reporting a net loss of $8.4 million for the quarter ended June 30, 2018.
According to a statement from Granite Construction: “Second quarter 2018 results include the impact of acquisition expenses of Layne Christensen Company, (“Layne”) and LiquiForce. Excluding the impact of these expenses, second quarter adjusted net income was $17.9 million, or $0.43 per diluted share, a 22.9% increase from $0.35 per share in 2017.”
“After producing the best first-half revenue performance in our Company’s history and with adjusted EBITDA nearly tripling year-over-year through June, Granite teams remain focused on consistent execution, process improvement, and steady, strategic growth,” said Granite President and Chief Executive Officer (CEO) James H. Roberts. “Following the successful completion of two acquisitions in the second quarter, we greatly appreciate the support that our employees and shareholders provided in the execution of our strategic plan. We are quite pleased to expand Granite’s platforms for growth in this opportunistic environment.
And, he added: “These strategic moves extend our reach, as we execute our strategy to diversify and grow across geographies in our core infrastructure markets, inclusive of the water, wastewater, and mining markets. State- and local-led program expansions, coupled with growing federal government investment, and continued private-sector strength are fueling the healthiest market conditions we have experienced in more than a decade. We are particularly encouraged that our core business continues to deliver on project pursuits as well as day-to-day execution. Following the close of the second quarter, we received notification of project wins that are not yet included in our backlog. These four project wins across four operating groups total more than $875 million, with these projects expected to enter our backlog in the second half of 2018 and early 2019.”
The construction materials and aggregates part of the business experienced a strong Q2 in which revenue increased 27.5% to $100.9 million, compared with $79.2 million last year and a “gross profit of $17.5 million” which was “32.6% (up) from $13.2 million last year. Gross profit margin improved nearly 70 basis points from last year to 17.3 percent.”
According to the CEO, James H Roberts: “Today, our outlook reflects a broad opportunity set for steady funding, focused investment, and diverse growth opportunities, which are expected to drive top-line growth and solid bottom-line improvement in 2018 and beyond.” His expectations for 2018, including acquisitions, are: “Mid- to high-teens consolidated revenue growth” coupled with “consolidated adjusted EBITDA margins of 7% to 8%.”