Martin Marietta 3Q17 results see cement shipments down 9.7%
Martin Marietta's 3Q17 total revenues for the building materials business, which includes the aggregates, cement, ready-mixed concrete and asphalt and paving product lines, were US$1.024bn, down slightly from US$1.039bn. The cement product line generated pricing growth of 3.9 per cent, driven by ongoing construction activity in the Dallas/Fort Worth area. Ready-mixed concrete and asphalt pricing increased 4.9 per cent and 11.8 per cent, respectively.
Average selling prices improved across all product lines and segments despite lower shipment volumes, reported Martin Marietta. The aggregates product line average selling price improvement of 5.1 per cent was led by a 9.6 per cent increase in the southeast group. The Mid-America group and west group reported increases of 6.2 per cent and 1.1 per cent, respectively.
Total cement shipments decreased 9.7 per cent. Aggregates product line shipments decreased 3.2 per cent compared with the 3Q16, driven by ongoing project delays, customer- and DOT-related labour constraints, government uncertainty and near-record precipitation compounded by major hurricane and tropical storm activity. The west group's shipments decreased 6.8 per cent and were most negatively affected by wet weather, notably in Texas where third quarter 2017 marked the fourth wettest third quarter in the last 123 years. The southeast group overcame the impact of Hurricane Irma and other storms, reporting aggregates volume growth of 4.7 per cent, driven by strong residential and nonresidential construction activity. Ready-mixed concrete and asphalt shipments decreased 13.1 per cent and 10.7 per cent, respectively.
Ward Nye, Chairman, President and CEO of Martin Marietta, stated, "Our third-quarter results reflect our ability to adapt to external challenges and deliver solid operating results. While Hurricanes Harvey and Irma unquestionably impacted our business, negatively affecting revenues and profitability, weather-related events are short-term in nature and dislocations or delays are subsequently resolved.
"We remain confident in Martin Marietta's long-term outlook, with the fundamental drivers for broad-based construction activity supporting a steady and extended, yet somewhat slower than anticipated, cyclical recovery across our geographic footprint.
"Positive momentum in residential and nonresidential construction has been offset by lackluster infrastructure activity, which continues to be significantly hindered by project delays and uncertainty concerning regulatory and other related reform. As a result, we expect aggregates shipments will continue its steady growth through the extended recovery."
