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Martin Marietta reports 4Q16 and 2016 results

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World Cement,

Martin Marietta's cement business reported a relatively positive end to the year as cement shipments increased in the three months to 31 December. The increase comes despite headwinds in the key Texan market, which was hit by delays in Texas Department of Transportation projects, reduced construction activity in portions of south Texas, and unseasonably wet weather.

The company shipped 0.81 million short t of cement in 4Q16. Average sales price per short ton also rose from US$102.44 to US$103.94, helping the company to a slight rise in revenues to US$85.4 million.

Over the full year, cement shipments fell from 4.558 million short t to 3.525 million short t. Sales followed a similar trend, going from US$455.4 million in 2015 to US$364 million in 2016. Gross profit was up, however, at US$120 million, compared to US$103.5 million in 2015, helped by a rise in the average selling price from US$98.35 per short t to US$101.96 per short t.

The company also said it had spent US$20.9 million on cement kiln maintenance over the year, which was in line with expectation and included in the cement business results. For 2017, the company expects maintenance costs of US$17.2 million.

The company also said it expected strong growth in cement demand this year going forward.

“With respect to 2017 specifically, we anticipate cement sales to increase 4% in 10% and profitability to increase 8% to 16%,” Ward Nye, Chairman, President and CEO of Martin Marietta, told analysts on a conference call. “At this midpoint, this translates to an estimated US$15 million profitability increase over 2016’s impressive results.

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