Martin Marietta to take over Texas Industries
Martin Marietta Materials, currently the fourth-largest US aggregates producer, is making an agreed, all-share offer for Texas Industries. If concluded, it will leave existing Martin Marietta Materials shareholders with around 69 per cent of the combined equity, with the remaining 31 per cent going to the existing owners of Texas Industries.
Martin Marietta will thereby enter the cement industry and the merged entity will control some 400 quarries, pits and distribution points across 36 states of the USA, and some in Canada, the Bahamas and the Caribbean. The proposed deal should add some 725Mt of aggregates reserves to Martin Marietta's total, taking the total to in excess of 13,500Mt.
Martin Marietta Materials' underlying turnover improved by 6.0 per cent in 2013 to US$1,943.2m and the EBITDA of US$394.8m was 19.7 per cent higher than the figure showed a year ago. The trading profit recovered by 39.6 per cent to US$218m. Net debt at the end of December was 4.1 per cent lower at US$980.7m, which represents a gearing level of 62.3 per cent.
Martin Marietta's aggregates production edged ahead by 0,1 per cent in 2013 to 116.51Mt (128.43Mst) while Texas Industries sold close to 13.5Mt, suggesting that the combined group could sell in excess of 130Mt (143Mst) in 2014. The average price received by Martin Marietta in 2013 was three per cent higher.
Volumes in the company's south-eastern area were yet again the weakest, with a 5.6 per cent decline to 15.04Mt, but the average price improved by 1.9 per cent. That area, which includes Florida and Alabama, represented just 12.9 per cent of the group aggregates volume. In the western region, which includes Texas, Oklahoma, Arkansas and Iowa, aggregates volume increased by 1.2 per cent to 47.36Mt, or 40.6 per cent of the group total. The mid-eastern area sold 0.4 per cent less aggregates at 53.46Mt and the average price improved by 3.2 per cent. Of the aggregates division's turnover, pure aggregates represented 78.5 per cent, with road paving contributing 9.2 per cent, ready-mixed concrete 8.5 per cent and asphalt 3.8 per cent.
Ready-mixed concrete deliveries rose by a further 17.6 per cent to 1332Mm³ and average sales price improved by 8.4 per cent to US$109.52/t. The asphalt volume came off by 5.3 per cent to 2.8Mt (3.09Mst), while the average price improved by 1.3 per cent to US$46.40/t (US$42.09/st).
For the current year, Martin Marietta Materials is expecting underlying aggregates volumes to improve by 4-5 per cent helped further growth in housebuilding activity and a modest improvement in civil engineering. Aggregates prices are expected to increase by 3-5 per cent on average and production costs per ton should show a modest reduction.
The special products division increased turnover by 11.5 per cent to US$225.6m and the trading profit improved by 7.3 per cent to US$73.5m. Turnover in 2014 is currently forecast to be between stable and four per cent, with magnesia-based chemicals being the main sales contributor.
