Martin Marietta Materials, Inc. has released its results for 2Q14 ending 30 June 2014. During the period the company’s consolidated net sales reached US$601.9 million, an improvement on 2Q13’s US$507.3 million.
Specialty Products achieved net sales of US$61.9 million, up 9.3% y/y. This increase has been attributed to growth within the chemicals product line. Meanwhile, the ready-mixed concrete product line experienced a 48% rise in net sales, boosted by a 27% improvement in volumes and a 12% increase in pricing. A positive performance was also reported for the company’s asphalt product line, with higher shipments driving a 20% rise in net sales.
Aggregates volumes grew by 12.7% y/y overall. On a regional basis, aggregates shipments were up by 22% in the West Group, 5.1% in the Mid-America Group and 7.3% in the Southeast Group. In terms of end-use sectors, the nonresidential market accounted for 31% of 2Q14 aggregates shipments, residential for 14%, ChemRock/Rail for 10% and infrastructure for 45% of volumes. All of these areas registered growth in volumes compared to 2Q13: nonresidential at 16%, residential at 20%, ChemRock/Rail at 13% and infrastructure at 9%.
Acquisition of TXI
In June 2014, Martin Marietta announced that it had formed an agreement with the US Department of Justice, which was approved by the US District Court for the District of Columbia, that resolved competition issues related to its acquisition of Texas Industries, Inc. (TXI). As part of this agreement, the company will divest its North Troy aggregates quarry, Oklahoma, and two rail yards in Dallas and Frisco, Texas, in 2H14. The acquisition of TXI was completed in July 2014, following shareholder approval. The combination is expected to generate annual pre-tax synergies of US$70 million by 2017.
“Second quarter 2014 results reflect strong operational performance and demonstrate our ability to significantly grow overall earnings and expand margins as construction activity begins to recover from historically low levels [...] Based on our performance through the first half of the year and key economic indicators, we are raising our full-year aggregates product line volume guidance to a range of 6% to 8% over 2013 levels,” commented Ward Nye, Chairman, President and CEO of Martin Marietta.
“This is an exciting time for Martin Marietta. We continue to see numerous positive indicators that underpin our confidence in the momentum and growth trajectory of our business. Additionally, our strategic acquisition of TXI enhanced our ability to benefit from the significant levels of construction activity in Texas and California. As we integrate the TXI operations and begin realising expected synergies, we will remain focused on further improving our balance sheet and increasing our financial flexibility, which should lead to opportunities for additional value creation for our shareholders,” added Nye.
Adapted from press release by Louise Fordham
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