Rock Products

SEP 2018

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14 • ROCK products • September 2018 www.rockproducts.com IN THE KNOW to achieve our stated synergies. Addi- tionally, in the second half of June, we enhanced the scale of our Midwest business by acquiring several Omaha, Neb.-based sand and gravel operations and a permitted greenfield site, adding approximately 30 million tons of aggre- gates reserves. These value-enhancing transactions demonstrate our ability to prudently deploy capital to drive significant value for our shareholders, customers and other stakeholders. "We believe the United States is in the midst of a construction recovery that will continue through the remainder of 2018 and beyond," Nye concluded. "Consistent with our forecasts at the beginning of the year, we expect con- struction activity to accelerate during the second half of this year, with faster growth in our key geographies due to these regions' attractive economic driv- ers and population trends. We remain confident about Martin Marietta's near-and long-term growth trajectory and expect 2018 to be another record year, as evidenced by our decision to raise our 2018 EBITDA guidance." Martin Marietta's second-quarter her- itage aggregates shipments by end use are as follows (all comparisons are versus the prior-year quarter on a her- itage basis): Aggregates shipments to the infra- structure market increased 2 percent, driven by large public projects in North Carolina and partially offset by project delays in Texas and Colorado as well as the previously-noted poor railroad service in Texas, south Georgia and Florida. The company is encouraged by the recent acceleration of state lettings and contract awards; however, some contractors are reporting a longer lag time between contract awards and the commencement of projects. As state Departments of Transportation (DOTs) and contractors address labor constraints and the broader indus- try benefits from further regulatory reform, management remains confi- dent that infrastructure demand will continue to improve from the funding provided by the Fixing America's Sur- face Transportation Act (FAST Act) and numerous state and local transporta- tion initiatives. Notably, once awarded, public con- struction projects are typically certain to be fully completed; thus, delays from weather or other factors merely extend the duration of the construction cycle for the company's single largest end use. Overall, aggregates shipments to the infrastructure market comprised 40 percent of second-quarter aggre- gates volumes, which remains below the company's most recent five-year average of 43 percent.

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