USA: Martin Marietta 3Q16 cement sales generate US$60.1m

Martin Marietta's 3Q16 results showed its cement business generated US$60.1m of net sales and US$29.7m of gross profit for the company. EBITDA growth for the company in the 3Q16 was US$32.8m, representing a 30.1 per cent increase on the US$248.2m for the same period in 2015.

The company sees improving conditions in most Texas markets despite cement and aggregate shipments being negatively impacted during the 3Q16 by department of transportation project delays and slower activity in the south Texas markets, in addition to wet weather.

Martin Marietta's aggregates business net sales for 3Q16 amounted to US$542.7m, up 2.4 per cent on the US$530 recorded in 3Q15.

Chairman, President and CEO of Martin Marietta, Ward Nye, said: "This growth was driven by early and small advances in both non-residential and residential demand. Importantly, these results were achieved despite some market challenges we faced during the quarter. Indeed, volume headwinds were more prevalent than tailwinds during the quarter and constrained construction activity in our markets.

"...Our record financial results demonstrate our ability to overcome these and other macro headwinds as our employees focus on executing our business plan and meeting our objectives."

Planned cement kiln maintenance costs of US$1.8m were also incurred during the quarter and are expected to reach US$9.7m in the fourth quarter.

Looking ahead to 2017, Mr Nye addded, "We anticipate infrastructure activity should grow as the impact of the US$305bn FAST Act, together with increased state department of transportation funding initiatives, begin to meaningfully flow into the construction pipeline. We see solid non-residential demand in our key markets driven, in part, by growth in warehousing, data center and wind farm construction, despite the perception of weakening activity at the macroeconomic level. We believe this perception relates to volatility in quarterly construction start data that is better explained by the natural ebb and flow of mega projects moving through the construction cycle. Residential construction in our key markets is expected to continue increasing, driven largely by historically low levels of construction activity over the previous several years together with low mortgage rates, significant lot absorption and higher multi-family rental rates."