Martin Marietta reports 1H cement gross profit up 26%

US-based building materials producer Martin Marietta posted total revenues of US$1.27bn in the 2Q20, representing a marginal decline from US$1.28bn in the 2Q19.

However, the company’s gross profit increased 6.6 per cent from US$356.9m in the 2Q19 to US$380.5m one year later while earnings from operations advanced 7.2 per cent from US$285.9m to US$306.4m during the same period. Net earnings attributable to Martin Marietta were up 14.8 per cent to US$217.6m in the 2Q20 from US$189.5m in the 2Q19.

In the 2Q20 the company’s cement business reported revenues of US$109.5m (2Q19: US$112.3m) and a gross profit of US$43.4m (2Q19: US$42.2m) with a gross margin of 39.7 per cent (2Q19: 37.6 per cent). The company attributes the fall in revenues to a 2.7 per cent drop in 2Q shipments on the back of a reduced demand for West Texas oil-well specialty cement products caused by historically low oil prices.

1H20 results
Consolidated total revenues for the first half of 2020 reached US$2.229bn, up 0.5 per cent from US$2.218bn in the 1H19. Consolidated gross profit advanced 4.6 per cent from US$499.8m in the 1H19 to US$522.9m in the 1H20.

Revenues from its cement activities picked up by 2.2 per cent to US$216.1m in the 1H20 from US$211.4m in the 1H19 while gross profit increased 26.3 per cent to US$70.7m from US$56m.

Ward Nye, chairman and CEO of Martin Marietta, stated, “We are proud to have concluded the first half of 2020 with the highest profitability and best safety performance in Martin Marietta’s history. Our record performance underscores Martin Marietta’s collective commitment to operational excellence and the disciplined execution of our strategic plan as we navigate the uncertainties and economic hardships presented by COVID-19.

“The Company expanded consolidated gross margin by 200 basis points and delivered Adjusted EBITDA of [US]$407min the second quarter, driven by pricing momentum and improved cost management across the Building Materials business. We remain confident that our favourable pricing trends will continue, aided in part by the continued success of our locally-driven pricing strategy. We expect our full-year 2020 aggregates pricing to increase three per cent to four per cent, slightly below our pre-COVID-19 forecast, largely due to YoY geographic and product mix fluctuations.