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]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Loma Negra Compania Industrial Argentina (LOMA) as a strong value stock opportunity based on its financial metrics and rankings [2][4][6]. Company Analysis - Loma Negra Compania Industrial Argentina (LOMA) holds a Zacks Rank of 2 (Buy) and has a Value grade of A, indicating strong potential for value investors [4]. - The stock has a Forward P/E ratio of 10.14, which is lower than the industry average of 10.65, suggesting it may be undervalued [4]. - Over the past 52 weeks, LOMA's Forward P/E has fluctuated between a high of 17.60 and a low of 7.84, with a median of 10.50, indicating volatility but also potential for recovery [4]. Financial Metrics - LOMA has a P/CF ratio of 6.31, which is attractive compared to the industry's average P/CF of 7.89, further supporting the notion of undervaluation [5]. - The P/CF ratio has ranged from a high of 8.14 to a low of 3.35 over the past year, with a median of 5.66, reflecting its cash flow strength [5]. - These financial metrics suggest that LOMA is likely undervalued at present, making it an appealing option for value investors [6].

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $40 million, reflecting a 3.2% decrease in pesos, translating to $36 per ton [9][20] - Net profit attributable to owners of the company totaled ARS 21.5 billion, down from ARS 79 billion in the first quarter of 2024, primarily due to lower financial results [23] - The net debt increased sequentially to ARS 187 billion, with a debt to EBITDA ratio of 0.96x, slightly up from 0.89x at the end of 2024 [24][25] Business Line Data and Key Metrics Changes - The Cement segment experienced a 10.9% revenue drop despite an 8.9% year-over-year increase in volumes, attributed to a softer pricing environment [14] - Concrete revenues declined by 1.4%, with a 22.8% increase in volumes offset by price pressures [14] - The Aggregates segment saw a 14.2% revenue decline despite a 29% increase in sales volumes, impacted by a weak market and pricing dynamics [15][22] Market Data and Key Metrics Changes - Cement consumption showed improvement, with April figures indicating a 28% year-over-year increase and a 14% sequential increase [12][8] - The Argentine economy is projected to grow approximately 5% in 2025, following a 1.7% contraction in 2024 [11][7] - The construction sector is expected to benefit from this economic growth, potentially fueling a more robust recovery [7] Company Strategy and Development Direction - The company remains focused on driving efficiency and controlling costs to protect profitability while delivering quality products and services [29] - The management expressed optimism about the recovery in the construction sector and the overall economy, anticipating a more sustained recovery in the coming quarters [27][28] - The company is also looking to capitalize on investment projects that have been on hold due to previous economic uncertainties [28] Management Comments on Operating Environment and Future Outlook - Management noted that the industry is still in the early stages of recovery, with expectations for a stronger performance as the year progresses [12][28] - The stabilization of economic conditions and easing of capital controls are seen as critical steps for long-term benefits [28] - The management is optimistic about the potential for growth in cement volumes, expecting double-digit growth in 2025 [42] Other Important Information - The company invested ARS 11.1 billion in capital expenditures during the quarter, mainly for ongoing projects [24] - SG&A expenses decreased by 7.8%, primarily due to lower marketing and IT expenditures [19] Q&A Session Summary Question: Competitive dynamics and market share - Management indicated that market share dynamics are in line with their strategy, and climate issues impacted different regions [32][34] Question: Pricing power and cement volume expectations - Management expects pricing to remain around $115 per ton and anticipates a year-over-year growth in cement volumes in the range of 15% to 20% [39][42] Question: Volume outlook and project backlogs - Management is optimistic about upcoming projects, particularly in the renewable energy and public works sectors, which are expected to drive demand [48]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $40 million, reflecting a 3.2% decrease in pesos, translating to $36 per ton [9][20] - Net profit attributable to owners of the company totaled ARS 21.5 billion, down from ARS 79 billion in the first quarter of 2024, primarily due to lower financial results [23] - The net debt increased sequentially to ARS 187 million, with a debt to EBITDA ratio of 0.96x, slightly up from 0.89x at the end of 2024 [24][25] Business Line Data and Key Metrics Changes - The Cement segment experienced a 10.9% revenue drop despite an 8.9% year-over-year increase in volumes, attributed to a softer pricing environment [14] - Concrete revenues declined by 1.4% despite a 22.8% increase in volumes, impacted by competitive pricing pressures [14] - The Aggregates segment saw a 14.2% revenue decline despite a 29% increase in sales volumes, affected by pricing dynamics and a lower average price due to the sales mix [15][22] Market Data and Key Metrics Changes - Cement consumption showed signs of improvement, with April figures indicating a 28% year-over-year increase and a 14% sequential increase [12][8] - The Argentine economy is projected to grow approximately 5% in 2025, following a 1.7% contraction in 2024, which is expected to benefit the construction sector [11][7] Company Strategy and Development Direction - The company remains focused on driving efficiency and controlling costs to protect profitability while delivering quality products and services [29] - The management expressed optimism about the recovery of the industry, indicating that the stabilization plans and easing of capital controls could unlock investment projects [28] Management Comments on Operating Environment and Future Outlook - Management noted that the industry is in the early stages of recovery, with expectations for a more sustained recovery in the coming quarters [27][28] - The company is optimistic about the potential for increased cement demand driven by infrastructure projects and a recovering housing market [48] Other Important Information - The company invested ARS 11.1 billion in capital expenditures during the quarter, primarily for the final stage of the 25-kilogram bag projects [24] - SG&A expenses decreased by 7.8%, mainly due to lower marketing and IT expenditures [19] Q&A Session Summary Question: Competitive dynamics and market share - Management indicated that market share dynamics are consistent with their strategy, and climate issues impacted different regions [32] Question: Pricing power and cement volume expectations - Management expects pricing to remain around $115 per ton and maintains expectations for double-digit growth in cement volumes for 2025 [40][42] Question: Volume outlook and project demand - Management noted positive forecasts for cement demand, with many tenders moving forward for projects expected to start in the second semester [48]

Financial Data and Key Metrics Changes - The Argentine economy is projected to grow approximately 5% in 2025, following a contraction of 1.7% in 2024, which positively impacts the construction sector [6][11] - The company reported an adjusted EBITDA of $40 million, reflecting a 3.2% decrease in pesos, translating to $36 per ton [8][19] - Net profit attributable to owners of the company totaled ARS 21.5 billion, down from ARS 79 billion in Q1 2024, primarily due to lower financial results [22] Business Line Data and Key Metrics Changes - The Cement segment experienced a 10.9% revenue drop despite an 8.9% year-over-year increase in volumes, attributed to a softer pricing environment [14] - Concrete revenues declined by 1.4%, with a 22.8% increase in volumes offset by price pressures [14] - The Aggregates segment saw a 14.2% revenue decline despite a 29% increase in sales volumes, impacted by a weak market activity [15] Market Data and Key Metrics Changes - Cement consumption showed a year-over-year increase of 28% in April, indicating a recovery trend [7][12] - The company’s gross profit declined by 4.7%, but gross margin expanded by 116 basis points to 26.4% [17] - The railroad segment reported a 19.9% increase in transported volumes, although pricing pressures remained due to a higher share of lower-revenue grain transport [16][21] Company Strategy and Development Direction - The company aims to drive efficiency and control costs while safeguarding profitability and delivering quality products [28] - The management is optimistic about the recovery of the construction sector, expecting a more sustained recovery in the coming quarters [26] - Changes in exchange rate policy and easing of capital controls are seen as pivotal for unlocking investment projects [27] Management Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the early stages of recovery in the construction sector, despite challenges from adverse weather conditions [6][12] - The company remains focused on maintaining a strong balance sheet and is committed to protecting profitability [8][28] - The outlook for cement demand is positive, with expectations of double-digit growth in 2025 [43] Other Important Information - The company ended the quarter with net debt of ARS 187 billion and a debt to EBITDA ratio of 0.96x, slightly up from 0.89x at the end of 2024 [23][24] - Cash flow used in operating activities improved significantly, totaling ARS 1.3 billion compared to ARS 12 million in Q1 2024 [23] Q&A Session Summary Question: Competitive dynamics and market share - Management indicated that market share dynamics are in line with their strategy, and weather conditions impacted regional performance [31][33] Question: Pricing power and cement volume outlook - Management expects pricing to remain around $115 per ton, with a positive outlook for volume growth, anticipating double-digit growth in 2025 [38][43] Question: Volume outlook related to construction projects - Management noted positive forecasts for cement demand, with several tenders moving forward, particularly in renewable energy and public works [47][51]

Financial Performance - Net revenues reached Ps 1632 billion, down 89% (US$ 149 million) [11] - Adjusted EBITDA stood at Ps 392 billion, down 32% (US$ 40 million) [11] - Consolidated Adjusted EBITDA margin reached 240%, with an expansion of 140 bps YoY from 226% [11] - Net Profit Attributable to Owners of the Company in 1Q25 was Ps 215 billion, down from Ps 791 billion in 1Q24 [36] - Total finance gain was Ps 89 billion in 1Q25, compared to a net gain of Ps 1032 billion in 1Q24 [36] Volumes and Sales - 1Q25 Volumes Up 11% YoY [14] - Cement, masonry & lime sales volumes increased by 89% year-over-year, but revenues decreased by 109% [21, 22] - Concrete sales volumes improved 228%, but revenues decreased 14% YoY [21, 22] - Railroad sales volumes increased 199%, but revenues decreased 12% YoY [21, 22] - Aggregates sales volumes increased 290%, but revenues decreased 142% year-over-year [21, 22] Balance Sheet and Cash Flow - Net Debt of US$ 174 million, representing a Net Debt/LTM Adjusted EBITDA ratio of 096x [11] - Cash position and Investments of Ps 106 billion and total debt at Ps 1972 billion as of end of 1Q25 [37] - In 1Q25, the cash used in Operating Activities reached Ps 13 billion from a utilization of cash of Ps 120 billion in 1Q24 [37]