Martin Marietta has confirmed its building materials business achieved a record fourth-quarter products and services revenues of $1.3 billion, a 26.9% increase.
Thebusiness segmentalso attained a record product gross profit of $318.4 million, a 6.6% increase. The business experienced strong shipment levels across all product lines and primary end-use markets, aided, in part, by weather conditions that extended 2021 construction activity. Pricing also increased across all product lines.
The company completed the acquisition ofLehigh HansonWest Region business , which included a portfolio of 17 active aggregates quarries, two cement plants with related distribution terminals, and targeted downstream operations, predominantly in California and Arizona. Lehigh West Region’s aggregates, asphalt and Arizona ready mixed concrete businesses are reported within the company’s West Group. The remainder of the Lehigh West Region’s operations, namely the cement and California ready mixed concrete businesses, are classified as assets held for sale/discontinued operations. The company is actively exploring strategic alternatives for these businesses.
Fourth-quarter organic aggregates shipments increased 9.3%, reflecting growing product demand that overcame continued contractor and transportation-related capacity constraints. Organic pricing increased 2.8%, in line with management’s previously stated expectations.
Total aggregates shipments, including acquired operations, grew 19.7%. Acquired operations have selling prices below the company’s average, which limited overall pricing growth to 1.4%.
East group total shipments increased 13.8% and benefited from robust construction activity across all three primary end-use markets and volume from the acquired Minnesota-based Tiller operations. Pricing, inclusive of acquisitions, decreased slightly. On a mix-adjusted basis, East Group pricing grew 2.7%.
West group total shipments increased 30.5% from strong underlying demand in both Texas and Colorado and shipments from newly-acquired operations. Pricing increased 6.1%, or 2.6% on a mix-adjusted basis, driven by improving long-haul shipments from higher-priced distribution yards.
Fourth-quarter aggregates product gross margin decreased 450 basis points to 26.2%, driven primarily by $15.3 million in higher diesel costs and a $13.4 million increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting. Excluding the impact of acquisition accounting, adjusted aggregates product gross margin was 27.9%.
Texas cement shipments increased 0.3% to nearly 1.1 million tonnes, a quarterly record. Large and diversified projects, coupled with improving demand for specialty oil-well cement products, offset one less shipping day relative to the prior-year quarter. Pricing grew 11.6%, or 9.9% on a mix-adjusted basis, reflecting favourable Texas market dynamics. Cement product gross margin declined 350 basis points to 41.0% as higher energy and raw materials costs outpaced shipment and pricing gains.
