Core Insights - The focus is on identifying value companies primarily in the commodities sector, particularly those with sustained free cash flows and low leverage [1] - There is an emphasis on companies in emerging markets that exhibit high margins and present good medium to long-term investment opportunities [1] - The analysis prioritizes firms with a strong pro-shareholder attitude, including consistent buyback programs and dividend distributions [1] Company Characteristics - Target companies are those experiencing some level of distress but possess high recovery potential [1] - Preference is given to sectors that are often overlooked by the market, such as oil & gas, metals, and mining [1] - Companies operating outside the United States are particularly of interest for uncovering value [1] Investment Philosophy - The investment strategy is centered around companies with solid financial fundamentals, including sustainable debt levels over time [1] - The analyst has a background in financial education, specializing in company valuation, which informs the investment approach [1] - The goal is to share insights and information with the investment community to enhance individual decision-making [1]

Financial Data and Key Metrics Changes - Consolidated adjusted EBITDA reached $36 million, reflecting a 23.7% year-over-year reduction, with the adjusted EBITDA margin contracting to 20.8%, a decline of 315 basis points year-over-year [5][12][16] - Net loss attributable to the owner of the company totaled ARS 8.5 billion for the quarter, compared to a net gain of ARS 27.9 billion in the same quarter last year [15][16] - Net debt declined by $9 million quarter-over-quarter to $206 million, with a net debt-to-EBITDA ratio of 1.49 times, up from 0.89 times at the end of 2024 [5][16][18] Business Line Data and Key Metrics Changes - Revenue in the cement segment declined 13.2% year-over-year, driven by a 5.4% contraction in volumes and softer pricing [8][12] - Concrete revenues remained broadly flat versus the third quarter of 2024, with a 37.8% increase in volumes offset by softer pricing dynamics [9][12] - The aggregates segment posted a slight 0.8% revenue decline, despite a 26.3% increase in sales volumes driven by higher activity in road construction [9][10] Market Data and Key Metrics Changes - Cement dispatches fell around 1% in the quarter, largely explained by a soft July, although September volumes were the highest in 22 months [6][7] - VAC cement dispatches reached 44% of total industry dispatches, showing strong performance in line with the previous quarter [7] - October's volumes showed renewed strength, with a 7.4% year-over-year increase, indicating a potential recovery in the market [7][26] Company Strategy and Development Direction - The company aims to optimize performance and support the country's development as conditions normalize, with a focus on unlocking investment projects that have been on hold [19][20] - The recent electoral outcome is expected to provide stability needed for investment projects, with management expressing optimism about higher activity levels [19][26] Management Comments on Operating Environment and Future Outlook - Management noted that key industry activity lost momentum due to a slowing economy and uncertainty around the electoral process, but expressed optimism for recovery following the elections [4][19] - The company expects to see a recovery in pricing in dollar terms with a more stable exchange rate and plans to increase prices above inflation [24][25] Other Important Information - The company began dispatching new 25-kilogram bags during the quarter, which were well received by customers [19] - Cash flow generation from operating activities totaled ARS 32 billion, reflecting higher working capital requirements and lower operational results [16][17] Q&A Session Summary Question: Pricing outlook for the company - Management indicated that pricing dynamics are expected to improve, with plans to increase prices above inflation in the coming months, especially with a more stable exchange rate [22][24] Question: Capital allocation and dividend distribution - Management stated that due to the macroeconomic situation in Argentina, they have not advanced with dividend payments this year but plan to reassess the situation for 2026 [24][25] Question: Early call orders or volumes for the fourth quarter - Management noted a recovery in volumes for October, driven by pre-election investment hesitance and a favorable exchange rate, expressing optimism for continued volume growth [26][27]

Financial Performance - Net revenues reached Ps 2093 billion, down 121% (US$ 154 million) [11] - Adjusted EBITDA stood at Ps 435 billion, down 237% (US$ 36 million) [11] - Consolidated Adjusted EBITDA margin reached 208%, a contraction of 315 bps YoY from 240% [10] - Net Loss Attributable to Owners of the Company in 3Q25 was Ps 85 billion, down from Ps 276 billion in 3Q24 [33] Sales Volumes - Cement, masonry & lime sales volumes decreased by 54% YoY [19, 20] - Concrete sales volumes increased by 378% YoY [19, 20] - Railroad sales volumes increased 39% YoY [19, 20] - Aggregates sales volumes increased 263% YoY [19, 20] Balance Sheet - Net Debt of US$ 206 million, representing a Net Debt/LTM Adjusted EBITDA ratio of 149x [10, 37] - Class 5 bond issuance of US$ 1129 million in July to refinance short-term debt [10, 37]

Financial Performance - Net sales revenues decreased by 12.1% year-over-year to Ps. 209,272 million (US$ 154 million) in 3Q25, primarily due to a 13.2% decline in the Cement segment[7] - Consolidated Adjusted EBITDA reached Ps. 43,536 million (US$ 36 million), down 23.7% year-over-year in pesos and 35.1% in dollars[7] - The Consolidated Adjusted EBITDA margin stood at 20.8%, decreasing by 315 basis points from 24.0% in the previous year[7] - The company reported a net loss of Ps. 8,587 million, compared to a net profit of Ps. 27,871 million in the same period last year, reflecting a significant decline in financial results[7] - Gross profit decreased by 32.5% in Q3 2025, totaling Ps. 36,261 million compared to Ps. 53,723 million in Q3 2024[24] - Adjusted EBITDA decreased by 23.7% year-over-year in Q3 2025, totaling Ps. 43,536 million compared to Ps. 57,024 million in the same period of the previous year[27] - The Adjusted EBITDA margin contracted by 315 basis points to 20.8% in Q3 2025 from 24.0% in Q3 2024[28] - Net loss for Q3 2025 was 8,587 million pesos, compared to a profit of 27,871 million pesos in Q3 2024, representing a 90.2% decline[57] Sales and Volume Performance - Cement, masonry, and lime sales volumes decreased by 5.4% year-over-year to 1.37 million tons, despite a 12.8% sequential increase[11] - Concrete segment volumes increased by 37.8% year-over-year, driven by private developments and public infrastructure projects[13] - The Aggregates segment posted a 26.3% year-over-year increase in sales volumes, supported by road construction and railroad projects[13] Debt and Cash Flow - Net Debt increased by 24.3% year-over-year to Ps. 281,519 million (US$ 206 million), with a Net Debt/LTM Adjusted EBITDA ratio of 1.49x[7] - The company issued a new Class 5 Corporate Bond in July for US$ 113 million to refinance upcoming maturities[7] - Total debt at the close of Q3 2025 stood at Ps. 396,740 million, with 61% in short-term borrowings and 39% in long-term borrowings[39] - Net cash generated from operating activities totaled Ps. 31,937 million in Q3 2025, compared to Ps. 83,758 million in the same period of the previous year[44] - The Company generated Ps. 74,281 million in cash from financing activities, mainly driven by the issuance of the Class 5 bond[45] - The Net Debt to Adjusted EBITDA (LTM) ratio stood at 1.49x as of the end of Q3 2025, up from 0.89x as of December 31, 2024[41] Expenses and Costs - Selling and administrative expenses decreased by 11.7% in Q3 2025, totaling Ps. 19,282 million compared to Ps. 21,830 million in Q3 2024[25] - The Adjusted EBITDA margin of the Concrete segment contracted by 1,096 basis points to -6.8% in Q3 2025, from 4.2% in Q3 2024[30] - The cost of sales for the three months ended September 30, 2025, was 144,887 million pesos, up from 110,611 million pesos in the same period of 2024[61] - The company reported a significant increase in interest expense, totaling 16,737 million pesos for the three months ended September 30, 2025, compared to 13,364 million pesos in 2024[59] Assets and Liabilities - Total assets as of September 30, 2025, were 1,848,138 million pesos, an increase from 1,717,690 million pesos as of December 31, 2024[55] - Current liabilities increased to 375,558 million pesos as of September 30, 2025, compared to 326,651 million pesos at the end of 2024[55] - Borrowings rose significantly to 396,740 million pesos as of September 30, 2025, up from 208,442 million pesos at the end of 2024[55] Exchange Rate and Monetary Position - The company reported a 77.8% decrease in gain on net monetary position, from 293,039 million pesos in the first nine months of 2024 to 65,195 million pesos in the same period of 2025[57] - The exchange rate differences resulted in a loss of 29,811 million pesos in Q3 2025, compared to a loss of 12,609 million pesos in Q3 2024, reflecting a 136.4% increase[57] - The company recorded a gain on net monetary position of (18,550) million pesos for the three months ended September 30, 2025, compared to (45,462) million pesos in 2024[59] Cash Flow Activities - Cash flows from operating activities generated 31,937 million pesos in the three months ended September 30, 2025, compared to 83,758 million pesos in the same period of 2024[59] - Cash flows from investing activities showed a net outflow of 61,943 million pesos for the three months ended September 30, 2025, compared to an outflow of 23,227 million pesos in 2024[59] - Cash flows from financing activities generated 74,281 million pesos in the three months ended September 30, 2025, compared to a net outflow of 45,808 million pesos in the same period of 2024[59]

Core Insights - Loma Negra reported a net loss of Ps. 8.6 billion in 3Q25, a significant decline from a net profit of Ps. 27.9 billion in the same period last year, primarily due to lower operational performance and a decrease in financial results [35][36] - The company experienced a 12.1% year-over-year decline in net revenue, totaling Ps. 209.3 billion, largely attributed to a 13.2% decrease in the Cement segment [17][8] - Adjusted EBITDA decreased by 23.7% year-over-year to Ps. 43.5 billion, with a margin contraction of 315 basis points to 20.8% [27][28] Financial Performance - Net revenue for 3Q25 was Ps. 209,272 million, down from Ps. 238,067 million in 3Q24, reflecting a decline in the Cement segment [17][8] - Gross profit fell by 32.5% to Ps. 36,261 million, with a gross profit margin of 17.3%, down from 22.6% in the previous year [24][6] - The company reported a net loss attributable to owners of Ps. 8.5 billion, with a loss per share of Ps. 14.5122 compared to a gain of Ps. 47.2609 in 3Q24 [36][9] Operational Highlights - Cement, masonry, and lime sales volumes decreased by 5.4% year-over-year to 1.37 million tons, despite a sequential increase of 12.8% [11][12] - The concrete segment saw a volume increase of 37.8% year-over-year, driven by private developments and public infrastructure projects [13] - The aggregates segment also experienced a 26.3% year-over-year volume increase, supported by road construction and railroad projects [20] Debt and Capitalization - Total debt as of September 30, 2025, was Ps. 396.7 billion, with a net debt to LTM adjusted EBITDA ratio of 1.49x, up from 0.89x at the end of 2024 [37][38] - The company issued a Class 5 corporate bond for US$113 million in July 2025, aimed at refinancing upcoming maturities [39][38] - Cash and cash equivalents increased to Ps. 115.2 billion compared to Ps. 18.1 billion in the previous year [37] Cash Flow Analysis - Net cash generated from operating activities was Ps. 31.9 billion, down from Ps. 83.8 billion in 3Q24, reflecting higher working capital needs [40][41] - Cash used in investing activities totaled Ps. 61.9 billion, primarily due to short-term allocations from the bond issuance [42] - Financing activities generated Ps. 74.3 billion, mainly from the bond issuance, net of repayments [42]

Core Insights - The article emphasizes the competitive advantages of Loma Negra in the Argentine construction materials sector, particularly after a transition year [1]. Company Positioning - Loma Negra is positioned favorably within the Argentine construction materials market, which is crucial for its future growth prospects [1]. Investment Approach - The investment strategy focuses on companies with competitive advantages, strong cash flow generation, growing income, healthy margins, solid asset bases, and sustainable debt levels [1].

Group 1 - The core investment strategy of Quipus Capital focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective rather than market-driven dynamics [1] - Quipus Capital emphasizes understanding the long-term earnings power of companies and the competitive dynamics within their industries [1] - The majority of recommendations from Quipus Capital will be holds, indicating a cautious approach to investment opportunities [1] Group 2 - The articles produced by Quipus Capital aim to provide important information for future investors and introduce a healthy skepticism in a generally bullish market [1]

Financial Data and Key Metrics Changes - The consolidated margin for the quarter stood at 21.2%, showing a year-over-year decline primarily due to a challenging competitive environment [6] - Adjusted EBITDA for the quarter was $34 million, down 31% in real terms when measured in pesos, reflecting a contraction in EBITDA margin [7][17] - Net profit attributable to owners of the company totaled ARS 0.4 billion for the quarter, a significant decline from ARS 41 billion in the same quarter of 2024 [20] Business Line Data and Key Metrics Changes - Cement dispatch volumes grew by 14% year-over-year, but the Cement segment revenue declined by 9.9% due to weaker pricing [11][12] - Concrete revenues declined by 1.1% despite a 44% increase in volumes, impacted by price pressures [14] - The Aggregates segment posted a slight revenue increase of 0.8%, driven by a 44% increase in volumes [14] Market Data and Key Metrics Changes - The Argentine economy showed a year-over-year growth of 5.8% in the first quarter, with forecasts for the full year around 5% [9][10] - The Construction Activity Index (ISAC) indicates a positive rebound in the industry, although recovery is not uniform across all sectors [11] Company Strategy and Development Direction - The company is focused on operational efficiency and innovation, with a commitment to transitioning to 25-kilogram cement bags [27] - The management remains optimistic about the future, expecting double-digit growth in cement dispatches for 2025 [26] Management Comments on Operating Environment and Future Outlook - Management noted that the recovery is still in the early stages, with potential political volatility due to upcoming midterm elections [11] - The competitive environment is stable, with expectations for pricing recovery in the second half of the year [34][64] Other Important Information - The company successfully issued a new corporate bond for $112.9 million to address upcoming debt maturity and improve its maturity profile [8][24] - Cash flow used in operational activities totaled ARS 22.3 billion, driven by lower operational results and higher income tax paid [22] Q&A Session Summary Question: Timing of price increases and competitive trends - Management indicated that the competitive environment has been challenging, but they foresee an increase in pricing above inflation by the end of the year [33][34] Question: Outlook for construction in the second half of the year - Management expects a gradual moderate growth in construction activity, driven by public works and private investments [39] Question: Expectations for volume growth in 2025 - Management maintains a double-digit growth forecast for volumes in 2025, with specific expectations for low to mid-teens growth [42][50] Question: Impact of energy prices on margins - Management acknowledged that both energy prices and competitive dynamics have affected margins, but they expect a recovery in pricing [56][64] Question: Public work program recovery outlook - Management believes there is significant potential in public infrastructure projects, but the impact in the second half of the year may be limited [67]

Financial Performance - Net revenues reached Ps 174511 million, down 80% (US$ 149 million)[12] - Adjusted EBITDA stood at Ps 37005 million, down 306% (US$ 34 million)[12] - Consolidated Adjusted EBITDA margin reached 212%, with a contraction of 691 bps YoY from 281%[11] - Net Profit Attributable to Owners of the Company in 2Q25 was Ps 04 billion, down from Ps 41309 million in 2Q24[36] - Consolidated Gross Profit declined 305% year-over-year, while margin contracted by 659 basis points to 204%[28] Volumes and Sales - Cement business dispatches continue its recovery, growing 11% YoY[9] - Total Net Revenues decreased by 80% year-over-year[22] - Concrete sales volumes improved by 440% year-over-year[22] - Aggregates sales volumes increased by 341% year-over-year[22] Balance Sheet - Balance sheet remains solid, with Net Debt of US$ 215 million, representing a Net Debt/LTM Adjusted EBITDA ratio of 134x[11] - Cash position and Investments of Ps 159 billion and total debt at Ps 2721 billion as of end of 2Q25[37] - Successful US$1129 million Class 5 bond issuance in July to refinance short-term debt, extending average duration and preserving a balanced maturity profile[11]

Financial Performance - Loma Negra reported net sales revenues of Ps. 174,511 million (US$149 million) in 2Q25, a decrease of 8.0% year-over-year, primarily due to a 9.9% decline in the Cement segment[8] - Consolidated Adjusted EBITDA reached Ps. 37,005 million (US$34 million), down 30.6% year-over-year, with an Adjusted EBITDA margin of 21.2%, a decline of 691 basis points from 28.1%[8] - Net profit for the quarter was Ps. 385 million, a significant drop of 99.1% compared to Ps. 41,246 million in 2Q24, mainly due to decreased net finance results[8] - Gross profit decreased by 30.5% in Q2 2025, totaling Ps. 35,594 million compared to Ps. 51,215 million in Q2 2024[24] - Net profit for Q2 2025 was Ps. 0.4 billion, a significant decline from Ps. 41.2 billion in the same period last year[34] - Net revenue for Q2 2025 decreased by 8.0% to 174,511 million pesos compared to 189,753 million pesos in Q2 2024[56] - Gross profit for the six-month period ended June 30, 2025, was 81,324 million pesos, down 18.0% from 99,214 million pesos in the same period of 2024[56] - The net profit for the period in Q2 2025 was 385 million pesos, a significant decrease from 41,246 million pesos in Q2 2024[60] Segment Performance - Cement dispatch volumes grew by 11.1% year-over-year, reaching 1.21 million tons, indicating a continued recovery in the sector[12] - The Concrete segment saw a 44.0% increase in volumes, although revenue declined by 1.1% due to competitive pricing pressures[20] - The Aggregates segment experienced a 34.1% increase in sales volumes, but revenue growth was nearly flat at 0.8% year-over-year due to weaker pricing dynamics[21] - Railroad revenues declined by 8.6% in 2Q25, despite a 10.6% increase in transported volumes, impacted by pricing conditions and disruptions in service[22] - The cement, masonry cement, and lime segment contributed 149,622 million pesos, accounting for 87.1% of total net revenue in Q2 2025[60] - The railroad segment generated 15,907 million pesos in revenue for Q2 2025, a 30.4% increase from 12,165 million pesos in Q2 2024[60] - The aggregates segment's revenue increased to 4,774 million pesos in Q2 2025, up from 3,305 million pesos in Q2 2024, reflecting a growth of 44.5%[60] Cost and Expenses - Selling and administrative expenses (SG&A) increased by 5.3% to Ps. 18,676 million in Q2 2025, with SG&A as a percentage of sales rising by 135 basis points to 10.7%[25] - Cost of sales increased to 119,521 million pesos in Q2 2025, up from 76,011 million pesos in Q2 2024, representing a 57.2% rise[60] - Selling, administrative expenses, and other gains & losses totaled 15,753 million pesos in Q2 2025, compared to 10,945 million pesos in Q2 2024, marking a 43.5% increase[60] - Depreciation and amortization expenses rose to 2,659 million pesos in Q2 2025, up from 1,269 million pesos in Q2 2024, an increase of 109.5%[60] Debt and Financing - A successful bond issuance in July raised US$112.9 million, aimed at meeting upcoming short-term maturities while maintaining a healthy debt profile[8] - Net Debt stood at Ps. 256,186 million (US$215 million), with a Net Debt/LTM Adjusted EBITDA ratio of 1.34x, up from 0.89x in FY24[8] - Total debt as of June 30, 2025, was Ps. 272,081 million, with 99% classified as short-term debt[37] - Net Debt to Adjusted EBITDA (LTM) ratio increased to 1.34x as of June 30, 2025, up from 0.89x at the end of 2024[39] - The company generated Ps. 45,605 million in cash from financing activities during Q2 2025, primarily from new borrowings[44] Cash and Assets - Cash and cash equivalents at the end of Q2 2025 were Ps. 15,894 million, compared to Ps. 4,294 million at the end of Q2 2024[42] - Cash and cash equivalents at the end of Q2 2025 were 15,894 million pesos, up from 11,567 million pesos in Q2 2024[58] - Total assets as of June 30, 2025, increased to 1,647,447 million pesos from 1,620,947 million pesos as of December 31, 2024[54] - Current liabilities rose to 394,378 million pesos as of June 30, 2025, compared to 308,254 million pesos at the end of 2024, indicating increased financial obligations[54] Other Financial Metrics - The company reported a finance cost reduction of 59.2% in Q2 2025, amounting to 9,775 million pesos compared to 23,930 million pesos in Q2 2024[56] - The company experienced a 75.5% decrease in gain on net monetary position, dropping to 17,079 million pesos in Q2 2025 from 69,597 million pesos in Q2 2024[56] - Earnings per share for Q2 2025 were 0.6809 pesos, a drastic decline of 99.0% from 70.7981 pesos in Q2 2024[56] - Adjusted EBITDA for Q2 2025 was 39,218 million pesos, compared to 44,836 million pesos in Q2 2024, reflecting a decrease of 12.0%[60] - The concrete segment reported a negative adjusted EBITDA of (1,713) million pesos in Q2 2025, worsening from (148) million pesos in Q2 2024[60]