For the second consecutive quarter, Martin Marietta experienced decreases in total revenue, gross profit and aggregate shipments, and an increase in gross profit related to aggregates.
Despite these setbacks, pricing growth in aggregates continued from the first quarter. The company reported an 11.6 percent increase in aggregate pricing in the second quarter, up to $21.61 per ton.
Second-quarter total revenue and aggregate shipments each decreased by 3 percent – down to $1.76 billion and 53 million tons, respectively. Martin Marietta says shipments from acquired operations were more than offset by poor weather, especially in Texas and its central division. Softening warehouse, office and residential demand also played a factor.
Martin Marietta says aggregates gross profit increased 6 percent to $392 million in the second quarter. Contributions from acquired operations and organic pricing growth helped to counteract lower shipments in the quarter, according to the company.
Additionally, aggregates gross profit per ton increased 9 percent to a second-quarter record of $7.41. This is notwithstanding weather-driven inefficiencies negatively impacting operating leverage and the $20 million ($0.37 per ton) headwind of selling acquired inventory, the company says.
“Martin Marietta experienced a series of factors in the second quarter impacting product shipments,” says Ward Nye, chairman and CEO of Martin Marietta. “Historic precipitation in Texas and in parts of the Midwest, together with ongoing restrictive monetary policy, curtailed volumes for the three-month period. While we view these circumstances as temporary, they nonetheless negatively impacted our financial results.
“Yet, despite these interim challenges, we made substantial progress during the period,” Nye adds. “Specifically, Martin Marietta concluded the first half of 2024 with record aggregates profitability and the best safety performance in our company’s history. Equally, in the second quarter we expanded our adjusted EBITDA margin and increased aggregates gross profit per ton by 9 percent despite shipments that were notably encumbered by April and May’s historically wet weather. These results demonstrate the resiliency of our aggregates-led business and our steadfast focus on what we can control.”
Nye goes on to say that he expects rate-driven private construction softness to be relatively short-lived, and he anticipates more accommodative monetary conditions beginning in September.
His outlook for Martin Marietta for the remainder of 2024 is a positive one.
“Over the longer time frame, stakeholders should continue to expect Martin Marietta to build upon our foundation that has proven successful – an aggregates-led growth platform focused on the nation’s most vibrant markets, disciplined execution of our strategic plan and an unwavering commitment to employee safety and commercial and operational excellence,” Nye says. “Together with our unrivaled attractive growth opportunities, these core foundational elements provide us confidence in our ability to responsibly navigate through macroeconomic cycles and continue driving superior shareholder value.”
