Martin Marietta Materials Inc. reported results for the second quarter ended June 30, noting revenues of $1.764 billion versus $1.821 billion in the second quarter of 2023, a 3% decline.
Second-quarter aggregates shipments decreased 2.8% to 53.0 million tons. Shipments from acquired operations were more than offset by poor weather, most notably in Texas and the Central Division, and softening warehouse, office and residential demand. Average selling price (ASP) increased 11.6% to $21.61 per ton, or 12.0% on an organic mix-adjusted basis.
Aggregates gross profit increased 6% to $392 million, as contributions from acquired operations and organic pricing growth more than offset lower shipments. Notably, aggregates gross profit per ton increased 9% to a second-quarter record of $7.41 notwithstanding weather-driven inefficiencies negatively impacting operating leverage and the $20 million (or $0.37 per ton) headwind of selling acquired inventory after its markup to fair value as part of acquisition accounting.
Cement and ready mixed concrete revenues decreased 37% to $261 million and gross profit decreased 44% to $72 million compared with the prior-year quarter, primarily due to the February 2024 divestiture of the South Texas cement plant and related concrete operations, as well as extremely wet weather in Texas.
Asphalt and paving revenues and gross profit increased modestly to $245 million and $37 million, respectively, both second-quarter records.
On April 5, the company completed the acquisition of 20 active aggregates operations in Alabama, South Carolina, South Florida, Tennessee and Virginia from Blue Water Industries LLC (BWI Southeast) for $2.05 billion in cash.
Ward Nye, chairman and CEO of Martin Marietta, stated, “Martin Marietta experienced a series of factors in the second quarter impacting product shipments. Historic precipitation in Texas and in parts of the Midwest, together with ongoing restrictive monetary policy, curtailed volumes for the three-month period. While we view these circumstances as temporary, they nonetheless negatively impacted our financial results. Yet, despite these interim challenges, we made substantial progress during the period. Specifically, Martin Marietta concluded the first half of 2024 with record aggregates profitability and the best safety performance in our company’s history. Equally, in the second quarter we expanded our Adjusted EBITDA margin and increased aggregates gross profit per ton by 9% despite shipments that were notably encumbered by April and May’s historically wet weather. These results demonstrate the resiliency of our aggregates-led business and our steadfast focus on what we can control. The quarter was also highlighted by the April 5th acquisition and subsequent integration of the Blue Water Industries operations. This pure-play aggregates acquisition not only strengthens the durability of our business and enhances our margin profile, but also expands our advantaged nationwide presence into attractive SOAR 2025 target markets including Tennessee and South Florida.
“Putting the quarter in broader perspective, recent macroeconomic data indicates that the typical lag effects of restrictive monetary policy are slowing product demand in the interest-rate-sensitive private construction sector. Consequently, we lowered our 2024 full-year Adjusted EBITDA guidance to $2.2 billion at the midpoint. That said, we fully expect this rate-driven private construction softness will be relatively short-lived as single-family housing remains fundamentally underbuilt; and recent inflation and employment data should provide support for more accommodative monetary conditions beginning in September.”
Nye concluded, “Over the longer time frame, stakeholders should continue to expect Martin Marietta to build upon our foundation that has proven successful – an aggregates-led growth platform focused on the nation’s most vibrant markets, disciplined execution of our strategic plan and an unwavering commitment to employee safety and commercial and operational excellence. Together with our unrivaled attractive growth opportunities, these core foundational elements provide us confidence in our ability to responsibly navigate through macroeconomic cycles and continue driving superior shareholder value.”