Knife River Corp. announced financial results for the second quarter ended June 30, reporting record consolidated revenue of $806.9 million, a 3% increase from the prior-year record revenue, driven by price increases in its aggregates product line and increased contracting services revenues. The company also reported record second quarter net income of $77.9 million, compared to net income of $56.8 million in the prior-year period.
“We had a very strong second quarter and start to our construction season, and I’d like to thank our team for their continued effort to execute on our Competitive EDGE plan to help deliver record results,” Knife River President and CEO Brian Gray said. “We are pleased to report record second quarter revenue, net income and Adjusted EBITDA, building upon the previous records set in the second quarter of 2023. We also continued to improve our Adjusted EBITDA margin. On a trailing-twelve-month basis through June 30, Adjusted EBITDA margin grew by 240 basis points, to 15.9%. Driving these strong results were favorable market conditions, continued pricing initiatives, disciplined bidding for higher-margin work and solid project execution.”
“By completing more preconstruction activities in the first quarter, we pulled costs forward and were able to hit the ground running earlier in the second quarter,” Gray said. “Gross profit margin for contracting services increased by 320 basis points from the same quarter last year. Additionally, we have nearly $1 billion in backlog, at margins we expect to be slightly higher than the prior-year period.
“At the same time, we continue to optimize the pricing of our materials to reflect their value in the market,” Gray said. “These efforts are creating record profitability and have more than offset volume declines.
“Looking ahead, we see continued support for infrastructure investment,” Gray said. “We still expect to benefit from the Infrastructure Investment and Jobs Act – approximately 56% of IIJA funding has yet to be obligated in our market areas. Further, our states are continuing to be proactive. As of July 1, lawmakers in eight of Knife River’s 14 states have introduced additional legislation to fund construction projects. Funding in our states is at or near record levels, and the states are continuing to pursue long-term, resilient revenue solutions. It is clear there is public demand for safer, less-congested roads and bridges.
“We are excited about the second half of the year and beyond, including line-of-sight growth opportunities,” Gray said. “We are actively working on several potential acquisitions across our segments, focused on materials-based businesses, and we have the strong balance sheet to support these investments. We are in the right markets, with the right team and the right plan to deliver for our shareholders.
“Given our second quarter results and the visibility we have into the second half of the year, we are raising our guidance for 2024,” Gray said. “We anticipate revenue in the range of $2.8 billion to $3.0 billion and Adjusted EBITDA in the range of $445 million to $485 million.”