Rock Products

JUN 2019

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

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12 • ROCKproducts • June 2019 IN THE KNOW single- and multi-family housing, driven by favorable demographics, job growth, land availability, steady interest rates and efficient permitting. On a national level, housing starts remain below the 50-year annual average of 1.5 mil- lion despite notable population gains. The residential market accounted for 23% of first-quarter aggregates shipments. Ward Nye, chairman, president and CEO of Martin Marietta, stated, "Our com- pany delivered strong operating and financial performance for the first three months of 2019, including first-quar- ter records for revenues and Earnings Before Interest, Taxes, and Depreciation and Amortization (EBITDA). Driven by improved shipments, pricing and cost management, we are off to a promising start to what we expect to be another record year for Martin Marietta. Notably, the Building Materials business benefitted from robust pent-up demand as well as modestly improved weather across portions of our geographic footprint, which allowed for an early beginning to the construction season. These encouraging trends, combined with favorable pricing momentum and growing contractor backlogs, reaffirm our confidence in our full-year outlook. "Consistent with our expectations, con- struction activity in our key regions, supported by strengthening public- and private-sector spending, is outpacing the nation as a whole. Infrastructure construction has begun in earnest on several transportation projects in North Carolina, Georgia and Florida following the recent acceleration in public let- tings and contract awards in these key states," Nye said. "Additionally, nota- ble employment gains and population growth continue to support private-sec- tor strength in our leading markets. These favorable dynamics bode well for a busy construction season throughout the remainder of the year." Summit Materials Inc. reported a first-quarter 2019 net loss of $68.8 million, compared to a net loss of $53.7 million in the comparable prior-year period. Summit's net revenue increased 5.5% in the first quarter of 2019 compared to the comparable 2018 period, while net income and earnings per share decreased in 2019 as compared to the comparable 2018 period, primarily due to the $14.6 million loss on debt financ- ing to redeem the 8.5% senior notes in March 2019. Tom Hill, CEO of Summit Materials, stated, "We were very pleased to see our organic average sales prices for aggregates increased by 6.3% in the first quarter as compared to a year ago. We continue to believe end market fundamentals remain intact for the con- struction industry going into 2019." Hill commented, "Cement sales volumes were up slightly in the first quarter of 2019 as compared to 2018 despite challenging weather conditions. How- ever, an extended annual maintenance shutdown and record flooding on the Mississippi River that has continued into the second quarter has negatively impacted our Cement business. "Underlying demand conditions in most of our markets remain favorable and are expected to remain so during the remainder of 2019," continued Hill. In Summit's public markets, state trans- portation funding measures in Texas, coupled with steady increases in federal subsidies, are contributing to increased lettings activity. Single-family housing starts and permits remain well below peak levels in Summit's major markets. Aggregates net revenues increased by 30.3% to $87.9 million in the first quarter 2019, when compared to the prior-year period. Aggregates adjusted cash gross profit margin improved to 43.2% in the first quarter 2019, compared to 41.5% in the prior-year period, as pricing gains exceeded input costs. Organic aggregates sales volumes increased 6.6% in the first quarter 2019, when compared to the prior-year period. Organic average selling prices on aggregates increased 6.3% in the first quarter 2019 when com- pared to the prior-year period due to FAST FACT Aggregates net revenues increased by 30.3% to $87.9 million in the frst quarter 2019, when compared to the prior-year period. Summit Materials Aggregates Revenue Rises in First Quarter Ward Nye Tom Hill

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