Martin Marietta Materials Inc. reported results for the fourth quarter and year ended Dec. 31, 2019. Fourth quarter 2019 revenues were $1,100,430, up from $1,020,218 in the fourth quarter of 2018. Full-year 2019 revenues were $4,739,098, up from $4,244,265 in 2018.
Ward Nye, chairman, president and CEO of Martin Marietta, stated, “We are pleased to have concluded 2019 as the most profitable year in our company’s history. Driven by improved shipments, pricing and profitability across the vast majority of our Building Materials business, we achieved our eighth consecutive year of growth for revenues, gross profit, adjusted EBITDA and earnings per diluted share (after adjusting for the one-time earnings per diluted share benefit in 2017 from the Tax Cuts and Jobs Act of 2017). This year’s record-setting results, combined with our team’s shared commitment to safety and operational excellence, yielded a 64 percent total shareholder return. Building on this momentum and our more than 25-year history as a public company, Martin Marietta is well-positioned for responsible long-term growth and further shareholder value creation in 2020 and beyond.”
Fourth-quarter operating results reflect the continuation of strong underlying product demand, partially offset by the timing of infrastructure projects, the company stated. The aggregates and downstream operations in Colorado, the company’s second-largest state by revenues, experienced project delays resulting from significant precipitation and extreme temperatures along the Front Range of the Rocky Mountains and unplanned maintenance and repair activities.
Fourth-quarter aggregates shipments and pricing improved 4.0% and 5.3%, respectively.
- Shipments for the Mid-America Group increased 3.5%, driven primarily by wind energy and data center projects in the Midwest. Lower infrastructure shipments and unfavorable product mix limited pricing growth to 1.0%.
- Shipments for the Southeast Group increased 7.5%, reflecting strong private-sector construction activity in the North Georgia and Florida markets that was partially tempered by infrastructure project delays. Pricing improved 3.0%.
- West Group shipments increased 3.4%, driven by strong underlying Texas demand that was offset by Colorado’s weather-impacted construction delays and unanticipated operating downtime. Pricing growth of 12.9% reflected favorable product mix and a higher percentage of commercial rail-shipped volumes.
Martin Marietta’s fourth-quarter aggregates shipments by end use are as follows (all comparisons are versus the prior-year quarter):
Aggregates shipments to the infrastructure market decreased modestly, reflecting project delays in North Carolina, Georgia and Colorado. The infrastructure market accounted for 34% of fourth-quarter aggregates shipments. For the full year, the infrastructure market represented 35% of aggregates shipments, remaining below the company’s most recent 10-year average of 45%.
Aggregates shipments to the nonresidential market increased, driven by ongoing commercial and heavy industrial construction activity. The company continued to benefit from distribution center, warehouse, data center and wind energy projects in key geographies, including Texas, the Carolinas, Georgia, Florida and Iowa, as well as the early phases of several large energy-sector projects along the Gulf Coast. The nonresidential market represented 37% of fourth-quarter aggregates shipments.
Aggregates shipments to the residential market increased, driven by a continued and attractive homebuilding dynamic in Texas, the Carolinas, Georgia and Florida. The residential construction outlook across the company’s geographic footprint remains positive for both single- and multi-family housing, driven by favorable population demographics, job growth, land availability, low interest rates and efficient permitting. On a national level, housing starts remain below the 50-year annual average of 1.5 million despite notable population gains. The residential market accounted for 23% of fourth-quarter aggregates shipments.
“Looking ahead, our 2020 outlook remains positive across our three primary construction end-use markets,” Nye stated. “We believe construction growth in Martin Marietta’s top 10 states will continue to outpace national averages and serves to reinforce our positive pricing outlook. Further supported by attractive market fundamentals and demand trends across our geographic footprint, as well as region-specific third-party forecasts, we expect the current construction cycle to expand at a steady and sustainable pace. Specifically, we anticipate infrastructure shipments, particularly for aggregates-intensive highways and streets, to meaningfully benefit from lettings and contract awards in our key states, strong federal and state funding levels and proposed regulatory reform. We are confident that states have the necessary visibility and resources to advance planned and future construction projects, regardless of a successor infrastructure bill passing prior to the September 2020 expiration of the Fixing America’s Surface Transportation Act (FAST Act). Furthermore, the Council on Environmental Quality recently proposed recommendations that, if approved, will reduce the regulatory burden of permitting large highway and bridge projects.”
Nye concluded, “With enhanced levels of needed infrastructure activity on the horizon and a healthy private sector, we expect 2020 to be another record year for Martin Marietta. Our ability to repeatedly deliver industry-leading safety, financial and operational performance demonstrates the successful execution of our proven strategy and our steadfast dedication to the world-class attributes of our business – including, safety, ethics, cost discipline and operational excellence. Importantly, we continue to strengthen this foundation for long-term success through strategic geographic positioning, cost management, price discipline, sustainable practices and prudent capital allocation. We will continue adhering to our strategic priorities and look forward to extending our long track record of consistently delivering profitability growth and enhanced shareholder value.”