Martin Marietta Pushes Up Aggregate Volumes by More Than 2%

SOURCE: Martin Marietta Materials | May 17, 2020

Martin Marietta has had a good first quarter with aggregate volumes up by more than 2%.

According to Ward Nye, president and CEO of Martin Marietta Materials: “We established a new first-quarter record for consolidated revenues, as product demand led to improved shipments and pricing across most of our building materials business.

“Notably, production efficiencies improved our year-over-year per unit aggregates cost. While this is what we aim for … lower unit cost served to reduce aggregates inventory valuation.”

And: “While our solid first-quarter performance provided a promising start to 2020, we recognize this will now be a challenging year for our country, customers, communities and industry as a whole.

“With that said, we remain confident that the attractive underlying market fundamentals and long-term secular growth trends in our key geographies, both of which underpinned the Company’s record 2019 performance and strong first-quarter 2020 results, remain intact and will be evident once again as the U.S. economy stabilizes and recovers.

“The company’s balance sheet remains healthy and we have ample liquidity for the foreseeable future. Martin Marietta, along with our customers, continues to operate as an “essential business” in most jurisdictions and, through the end of April, we have seen minimal disruption to our operations, workforce and supply chains from the effects of COVID-19 and related government agency responses.”

In its building materials division, Martin Marietta says: “First-quarter operating results demonstrated the strength of overall demand, most notably in Colorado, Iowa, Indiana and Maryland, against a challenging prior-year comparison.

“The aggregates, cement and downstream operations in Texas, the Company’s largest state by revenue, experienced project delays as the Dallas/Fort Worth area experienced record first-quarter precipitation.

“Additionally, Georgia, the Company’s fourth-largest state by revenue, experienced its sixth wettest first quarter in 125 years.”

However, despite all the bad weather: “First-quarter aggregates shipments and pricing improved 2.3 percent and 2.7 percent, respectively, compared with the prior-year quarter.”

Also: “First-quarter cement shipments increased 5.2 percent, driven by strong underlying demand in South Texas (but) ready mixed concrete shipments decreased 14.1 percent, resulting from weather-impacted project delays. 

“Our first-quarter 2014 results reflect the continued economic momentum from 2013’s fourth quarter as well as successful execution of our strategic initiatives to improve performance and maintain a lean cost structure. This combination helped drive both revenue growth and improved profitability. Aggregates product line shipments increased 8%. Importantly, shipments in March 2014 increased 13% compared with March 2013, an indicator of accelerating demand as the annual construction season begins. The Aggregates business’ gross margin (excluding freight and delivery revenues) expanded 400 basis points, despite the impact of adverse winter weather conditions on production volume and costs.

“In addition, our Specialty Products business posted first-quarter record net sales, making a significant contribution to our quarterly results.

“Private construction continues to be solid across all of our geographies. We also noted public-sector volume growth in Texas and Colorado, where robust state-funding programs are providing additional funds for transportation investment. Public construction in other areas, however, continues to be unsettled by uncertainty in long-term federal funding.”

Mr. Nye continued, “We remain excited about our pending combination with Texas Industries, which we announced in January. The combination provides an expanded platform for growth and greater leverage to construction activity in Texas and California, thus creating long-term value for shareholders of both companies. We are cooperating with regulatory agencies; the process is advancing as planned.”

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