Nye: 2022 was Martin Marietta’s ‘most profitable year ever’

Although aggregate shipments decreased in the fourth quarter at Martin Marietta, price increases contributed to another successful stretch at the company.

Fourth-quarter aggregate shipments dropped 12 percent, Martin Marietta says, largely due to inclement weather in a number of key markets compared to the unseasonably warm and dry prior-year period that extended 2021 construction activity. Aggregate pricing, however, increased 16.5 percent – a quarterly record – or 13.8 percent on a mix-adjusted basis, due to the cumulative effect of multiple price increases throughout the year.

Fourth-quarter aggregate product gross profit at Martin Marietta, meanwhile, improved 10.1 percent to a fourth-quarter record of $239 million. Similarly, product gross margin improved 200 basis points to 28.2 percent, with robust pricing growth more than offsetting lower shipments and increased costs.

“2022 marked our company’s 11th consecutive year delivering increased products and services revenues, gross profit and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), as well as our most profitable year ever,” says Ward Nye, chairman and CEO of Martin Marietta. “We achieved record financial results and world-class safety incidence rates while also seamlessly integrating a large platform acquisition and completing non-core asset divestitures against a backdrop of rapid monetary tightening, a resulting housing slowdown and cost inflation at 40-year highs.

“These accomplishments are a testament to our team’s disciplined execution of our strategic plan and unyielding focus on what we can control,” Nye adds. “Moreover, in a notably weather-impacted fourth quarter, our team nonetheless expanded aggregates margins and increased gross profit per shipped ton by 25 percent over the prior-year quarter. These successes were underscored by an all-time quarterly record of aggregates pricing growth and position our company well to deliver another record year in 2023.”

The outlook

Nye

Martin Marietta expects some factors contributing to 2022 momentum to carry into 2023.

“Entering 2023, near-term product demand visibility is supported by healthy customer backlogs driven by an acceleration in public infrastructure investment and announced large-scale energy and domestic manufacturing projects,” he says. “While single-family residential construction is slowing, we expect a resumption of growth in this end market in Martin Marietta markets beyond 2023, as population growth continues and mortgage rates stabilize.”

While Martin Marietta expects aggregate shipments to be relatively flat this year, the company expects to find ways to grow.

“Our resilient and durable business model gives us the confidence in our ability to continue our industry-leading operational, financial and regulatory performance while successfully navigating the dynamic macroeconomic environment and sustainably delivering value for shareholders,” Nye says.