The building materials business at Martin Marietta achieved products and services revenues of $1.2 billion in the second quarter – a 7.4 percent increase – and a product gross profit of $356.9 million.
According to Martin Marietta, its building materials business benefitted from solid product demand driven by single-family housing growth, infrastructure investment and notable heavy industrial projects of scale. The company’s aggregate, cement and ready-mixed concrete operations in Texas experienced project delays, as Martin Marietta says the state marked its 11th-wettest second quarter in 127 years.
Additionally, Martin Marietta says its aggregate and downstream operations in Colorado faced a difficult comparison versus the second quarter of 2020, which benefitted from unseasonably favorable weather conditions.
Aggregate
Second-quarter organic aggregate shipments and pricing increased 1.5 percent and 3.4 percent, respectively, Martin Marietta reports. Total aggregate shipments and pricing increased 3.3 percent and 2.9 percent, respectively.
Total shipments in Martin Marietta’s East Group increased 7 percent, reflecting strong construction activity in the Carolinas, Georgia, Florida and Maryland – and across all three primary end-use markets and shipments from the recently acquired Tiller Corp. operations. The growth more than offset weather-induced project delays in the Midwest, Martin Marietta says. Pricing increased 3.6 percent, reflecting a favorable geographic mix.
In the West, Martin Marietta’s shipments decreased 3.6 percent, as significant rainfall in Texas and Colorado hindered robust construction activity. Pricing increased 0.7 percent, the company adds, reflecting a lower percentage of higher-priced commercial rail-shipped volumes. On a mix-adjusted basis, West Group pricing increased 2.4 percent.
“Our second-quarter results demonstrate Martin Marietta’s strong execution of our proven Strategic Operating Analysis & Review plan and the benefit of strengthening product demand, pricing gains across all product lines and targeted growth initiatives,” says Ward Nye, chairman and CEO of Martin Marietta. “The company established new quarterly records for revenues, profits and safety, notwithstanding significant rainfall that adversely impacted operations in several of our key geographies – most notably Texas and Colorado, our two largest revenue states.”
Look ahead
Martin Marietta remains confident that favorable pricing dynamics will continue. Additionally, the company anticipates single-family housing growth, expanded infrastructure investment and notable heavy industrial projects of scale will drive increased shipment levels.
Martin Marietta expects these demand drivers, combined with the ancillary construction necessary for housing community buildouts and the potential for increased infrastructure investment from a comprehensive federal surface transportation package, to result in sustained, multi-year growth in product demand.
“Importantly, Martin Marietta is poised to capitalize on long-term secular demand trends that are expected to support growing construction activity and contribute to favorable pricing dynamics across our footprint,” Nye says. “We remain on track to once again deliver record revenues and adjusted EBITDA (earnings before interest, tax, depreciation and amortization) for the full year.
