CanWel Building Materials Group Ltd. (“CanWel”) announced its 2Q 2020 financial results for the period ended June 30, 2020.
Consolidated revenues increased by 7.1% to $412.9 million when compared to $385.7 million in the same period in 2019. Despite the general economic impact of the COVID-19 global pandemic, sales for the Distribution segment increased by $31.3 million or 8.4%, demonstrating the company’s continued resilience and steady overall end-market demand for its products. The year-over-year increase in the company’s sales is attributable to improvements in both sales volumes and pricing. Quarantine-related home improvement activities resulted in increased demand from consumers spending more time and effort on home renovation and repair projects.
Additionally, construction materials pricing generally increased during the 2Q 2020, as the economy started to re-open in certain jurisdictions that previously had restricted activity. The company’s sales by product group in the quarter were made up of 67% construction materials, compared to 62% last year, with the remaining balance resulting from specialty and allied products of 28%, and forestry and other of 5%.
Gross margin dollars increased 8.3% to $58.9 million, compared to $54.4 million during the corresponding period in 2019. Gross margin percentage also increased to 14.3% of revenues versus 14.1% during the same period in 2019. The increase in margin dollars and margin percentage is mainly attributable to the improvements in sales and construction materials pricing during the 2Q 2020.
EBITDA for the period increased 20.1% to a quarterly record at $32.8 million compared to $27.3 million during the 2Q 2019, largely due to the improvements in both sales volumes and construction materials pricing as a result of the quarantine-related home improvement activities during the second quarter of 2020. As a result, net earnings for the quarter ended June 30, 2020 increased 62.8% to $12.7 million compared to net earnings of $7.8 million in the same quarter of 2019.
Founded in 1989, CanWel is Canada’s only fully integrated national distributor in the building materials and related products sector.