Elevated aggregate and asphalt pricing drove gains in Granite Construction’s materials business in the third quarter, the company reports.
The materials segment’s revenue was up 5.9 percent in the third quarter to about $171 million. The materials segment’s gross profit was also up in the quarter – 33.8 percent higher, in fact – to about $29 million.
Additionally, Granite says oil and energy costs have normalized this year compared to the inflation experienced in 2022. Those costs negatively impacted Granite’s materials gross profit margin last year.
Companywide, Granite’s third-quarter revenue was up $108 million to $1.1 billion versus the prior-year period. Granite’s construction business segment also experienced a revenue increase, with the company’s California and Mountain Groups up 15 percent and 11 percent, respectively.
“I am pleased with our third-quarter performance,” says Kyle Larkin, president and CEO of Granite. “These results demonstrate the strong progress we are making towards the goals identified in our strategic plan that we introduced just over two years ago. We have built record CAP while also de-risking our project portfolio by focusing on best value projects.
“During this same time, we have also bolstered our materials business through both greenfield and bolt-on investments, and we improved segment margins,” Larkin adds. “We are growing revenue and increasing adjusted EBITDA margin and believe we are on track to reach our 2024 financial targets.”
