Group 1 - The company is a leader in the Argentine cement industry, attributed to its dominant market position and vertical integration of products and services [1] - The long-term attractiveness of the company is emphasized, indicating solid potential for growth [1]

Long-only investment, evaluating companies from an operational, buy-and-hold perspective.Quipus Capital does not focus on market-driven dynamics and future price action. Instead, our articles focus on operational aspects, understanding the long-term earnings power of companies, the competitive dynamics of the industries where they participate, and buying companies that we would like to hold independently of how the price moves in the future. Most QC calls will be holds, and that is by design. Only a very sm ...

Conference Call 4Q24-Results Disclaimer and Forward-Looking Statement Note: Loma Negra's financial information has been prepared in accordance with the Argentine Securities Commission (Comisión Nacional de Valores-CNV) and with International Financial Reporting Standards. Following the categorization of Argentina as a country with a three-year cumulative inflation rate greater than 100%, the country is considered highly inflationary in accordance with IFRS. Consequently, starting July 1, 2018, the Company i ...

Loma Negra Reports 4Q24 results Buenos Aires, March 6, 2025 - Loma Negra, (NYSE: LOMA; BYMA: LOMA), ("Loma Negra" or the "Company"), the leading cement producer in Argentina, today announced results for the three-month period ended December 31, 2024 (our "4Q24 Results"). FY24 Key Highlights We view 2024 as a transition year, with the most challenging times now behind us. While the recovery remains gradual, it is following a positive trajectory that is expected to strengthen alongside overall economic perfor ...

Group 1 - Loma Negra Compania Industrial Argentina S.A. Sponsored ADR (LOMA) is part of the Construction sector, which includes 88 individual stocks and has a Zacks Sector Rank of 12 [2] - LOMA currently holds a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperforming the market [3] - The Zacks Consensus Estimate for LOMA's full-year earnings has increased by 55.3% in the past quarter, reflecting improved analyst sentiment [4] Group 2 - Year-to-date, LOMA has gained approximately 3.9%, outperforming the average gain of 2.7% for the Construction group [4] - LOMA belongs to the Building Products - Home Builders industry, which has an average loss of 3.4% this year, further highlighting LOMA's strong performance [6] - In comparison, another stock in the Construction sector, Primoris Services (PRIM), has a year-to-date return of 4.2% and a Zacks Rank of 2 (Buy) [5][7]

Financial Data and Key Metrics Changes - The company's top line reached ARS 180.7 billion, marking a 21.2% decrease in the quarter, primarily due to lower cement dispatches [8] - Consolidated adjusted EBITDA was $55 million or ARS 43 billion, down 18.5% compared to the same period last year [8][23] - EBITDA margin stood at 24%, reflecting an improvement of 78 basis points year-over-year [9][23] - Net profit attributable to owners of the company was ARS 20.9 billion, compared to ARS 22.9 billion in Q3 2023 [27] Business Line Data and Key Metrics Changes - The cement, masonry cement, and lime segment declined by 21%, with volumes contracting 17.1% year-on-year [14] - Concrete revenues decreased by 29.7% in the quarter, primarily due to a 22% drop in dispatches [16] - The aggregates segment experienced a 42.7% decline, with sales volume down by 29% [16] - Railroad revenue saw a modest decline of 4.7%, with transported volumes dropping by 7% [17] Market Data and Key Metrics Changes - Industry volume showed a strong sequential improvement, increasing by 25%, although still below last year's level [7] - Bulk cement dispatches reached 62%, recovering more quickly than other dispatch modes [12] - Positive indicators such as the recovery of real wages, downward trend in inflation, and lower interest rates are essential for driving sustainable growth [13] Company Strategy and Development Direction - The company is focused on maintaining operational flexibility and production strategy to mitigate the impact of seasonal costs [34] - The management is optimistic about the economic recovery, particularly in the construction sector, driven by credit expansion and foreign investment [35][36] - The company is analyzing capital allocation alternatives for potential dividend improvements in the future [42][45] Management's Comments on Operating Environment and Future Outlook - Management noted that the third quarter showed significant sequential improvement, indicating a move past the worst part of the recession [34] - The company is closely monitoring economic challenges, including inflation and interest rate declines, which could provide a solid foundation for growth [35] - The reduction in country risk is seen as a positive step toward attracting foreign investment [36] Other Important Information - The company ended the quarter with a net debt of ARS 172 billion, achieving a net debt-to-EBITDA ratio of 1.03x, down from 1.4x at the end of 2023 [29] - Cash generation from operational activities reached ARS 64 billion, up from ARS 45 billion in the same period of 2023 [30] - The company allocated ARS 17.4 billion to capital expenditure, with a significant portion directed towards a new project [31] Q&A Session Summary Question: Pricing dynamics and its effect on volumes and revenues - Management is closely monitoring pricing dynamics and may adjust prices less frequently if inflation stabilizes [38][39] Question: Catalysts for larger construction projects and bulk cement demand - Management expects larger projects and public works to impact bulk cement sales positively in the upcoming months [40] Question: Potential for dividend improvements - Management indicated that there are no immediate plans for dividends but is analyzing capital allocation alternatives [42][45] Question: Impact of InterCement situation on debt repayment covenants - Management confirmed there are no covenants regarding change of control that may impact the company [47] Question: Details on the 25-kilo bag project and cement volume recovery - Management noted that profitability between cement and bulk is similar, and they expect a significant recovery in volumes next year [49][50] Question: Recovery of the mortgage market in Argentina - Management observed a recovery in real estate sales, which could boost future construction projects and cement sales [51]

Financial Performance - Net sales revenues decreased by 21.2% YoY to Ps. 180,686 million (US$ 185 million) in 3Q24, primarily due to a 21.0% decline in Cement segment sales volumes[3]. - Consolidated Adjusted EBITDA reached Ps. 43,279 million (US$ 55 million), down 18.5% YoY in pesos and 16.5% in dollars, with an EBITDA margin of 24.0%, an increase of 78 basis points YoY[3][7]. - Net profit for 3Q24 was Ps. 21,153 million, an 8.7% decrease from Ps. 23,177 million in the same period last year, with a notable improvement in net total finance gain[3][15]. - Gross profit fell 23.5% YoY to Ps. 40,774 million in 3Q24, with a gross profit margin contraction of 69 basis points to 22.6%[21]. - The company reported a total net financial gain of Ps. 12,599 million in 3Q24, compared to a net financial cost of Ps. 4,884 million in 3Q23[28]. - The company reported a significant decrease in finance costs, down 70.6% to ARS 12,902 million in Q3 2024 from ARS 43,914 million in Q3 2023[50]. - The company’s total shareholder's equity rose to ARS 714,674 million as of September 30, 2024, from ARS 593,095 million as of December 31, 2023[48]. Sales and Volume Trends - Cement, masonry, and lime sales volumes fell by 17.1% YoY to 1.44 million tons, although there was a sequential recovery of 32%[11]. - The Concrete segment experienced a 22.2% YoY decline in sales volumes, with a sequential improvement of 28%[12]. - The Aggregates segment saw a 28.7% decrease in sales volumes year-over-year, indicating ongoing challenges in the market[12]. - Railroad segment revenues decreased by 4.7% YoY, with a 7.0% decline in transported volume, partially offset by positive pricing dynamics[19]. - Net revenue for Q3 2024 was ARS 180,686 million, a decrease of 21.2% compared to ARS 229,223 million in Q3 2023[50]. Cost and Expenses - Cost of sales decreased by 20.5% YoY to Ps. 139,911 million in 3Q24, primarily due to lower sales volumes and improved energy inputs[20]. - Selling and administrative expenses decreased by 12.9% to Ps. 16,569 million in 3Q24, reaching 9.2% of sales, up 87 basis points YoY[22]. - The cost of sales for the three months ended September 30, 2024, was 110,611 million pesos, up from 41,856 million pesos in the same period of 2023, representing a rise of 164.5%[54]. Debt and Liquidity - Net debt decreased to Ps. 171,888 million (US$ 177 million), resulting in a Net Debt/LTM Adjusted EBITDA ratio of 1.03x, down from 1.40x in FY23, reflecting a US$ 40 million reduction in indebtedness during the quarter[3][7]. - Total debt as of September 30, 2024, was Ps. 185,606 million, down from Ps. 296,811 million YoY, with a net debt to LTM adjusted EBITDA ratio of 1.03x[30][34]. - Cash generated from operating activities in 3Q24 was Ps. 63,570 million, compared to Ps. 45,154 million in 3Q23, mainly due to positive working capital effects[36]. - Cash and cash equivalents at the end of the period were 13,718 million pesos, consistent with 64,610 million pesos at the end of the same period in 2023[52]. Future Outlook - The company anticipates a stronger recovery as macroeconomic factors stabilize, indicating optimism for future performance[6][8]. - The company provided a forward guidance of 8% revenue growth for Q4 2023, projecting revenues between $2.7 billion and $2.8 billion[55]. - The company plans to enter two new international markets by the end of 2023[55]. Operational Highlights - The Adjusted EBITDA margin for the Concrete segment improved to 4.2%, up 355 basis points YoY, while the Aggregates segment contracted to negative 17.0%[25]. - The company experienced a net cash used in investing activities of 17,629 million pesos for the three months ended September 30, 2024, compared to 13,321 million pesos in the same period of 2023, reflecting an increase of 32.5%[52]. - The company reported a net cash used in financing activities of 34,767 million pesos for the three months ended September 30, 2024, compared to 61,206 million pesos in the same period of 2023, indicating a decrease of 43.2%[52]. - The company’s inventories increased to ARS 166,065 million as of September 30, 2024, from ARS 154,181 million as of December 31, 2023[48]. Market and Product Development - New product launches contributed to a 20% increase in sales in the consumer electronics segment[55]. - Market expansion efforts led to a 25% increase in sales in the Asia-Pacific region[55]. - The company completed a strategic acquisition of a tech startup for $200 million to enhance its product offerings[55]. - The company invested $150 million in R&D for new technologies, focusing on AI and machine learning[55]. - Customer satisfaction ratings increased to 90%, reflecting improved service and product quality[55].

Group 1 - The article introduces Ignacio Zorzoli as a new contributing analyst for Seeking Alpha, encouraging individual investors to share their investment ideas [1] - Zorzoli has over 10 years of trading experience and focuses on value companies linked to commodity production, particularly in emerging markets [2] - The analyst emphasizes the importance of companies with sustained free cash flows, low leverage, and a solid pro-shareholder attitude, including buyback programs and dividend distributions [2] Group 2 - The article highlights Zorzoli's preference for analyzing underappreciated sectors such as oil & gas, metals, and mining, which may present good investment opportunities [2] - It is noted that past performance is not indicative of future results, and no specific investment recommendations are provided [3]

Group 1 - The article discusses the potential for investment opportunities in countries, specifically highlighting Argentina's long-standing economic struggles due to overspending [1] - The author has a successful track record in stock market investments, averaging over 31% returns over a one-year period from their articles [1] - The investment strategy focuses on deep value stocks, primarily in small-cap companies, which constitute 50-75% of the author's portfolio [1] Group 2 - The author has a beneficial long position in the shares of LOMA, indicating a personal investment interest [2] - The article emphasizes that past performance is not indicative of future results, highlighting the inherent uncertainties in investment [2] - The author expresses independent opinions without any business relationships with the companies mentioned, ensuring unbiased analysis [2]

Core Viewpoint - Loma Negra's 2Q24 results reflect a challenging macroeconomic environment in Argentina, with significant declines in sales volumes and ongoing operational adjustments to mitigate costs [1][2]. Group 1: Company Performance - Loma Negra's sold volumes decreased by 30% in 2Q24 compared to the previous year, with concrete volumes down 45% [3]. - Despite the decline in sales, the company managed to improve its margins by 500 basis points in both gross and EBITDA, resulting in an 11% contraction in adjusted EBITDA and a 12% contraction in operating income [3]. - The company halted clinker production and grinding operations to reduce costs, which may not be sustainable in the long term due to potential inventory cost increases [3]. Group 2: Market Conditions - Argentina is experiencing a significant recession, with the economy expected to decline by mid-to-high single digits this year, severely impacting the cement industry [2]. - Retail buyers are facing reduced disposable income, and real estate developers are hesitant to invest due to high construction costs and a lack of buyers [2]. - The national government has ceased all public works since December, further diminishing demand for cement [2]. Group 3: Ownership and Control Issues - Loma Negra's controller, Intercement, has been burdened by debt and is seeking to sell its stake in Loma, with Companhia Siderurgica Nacional (CSN) holding exclusive negotiation rights [4]. - Intercement filed for asset protection in Brazil, which does not affect Loma's operations but increases the urgency of selling its stake [4]. - The potential change in ownership could attract interest from other strategic players, including local investors [4]. Group 4: Valuation Insights - Loma's current valuation is challenging to assess due to the ongoing recession, with a market cap of approximately $820 million and potential cash profits estimated between $55 million to $70 million [5]. - The most negative scenario suggests a yield of about 6.6%, which is not particularly attractive given Argentina's economic instability [5]. - The stock is viewed as a Hold, as the company is expected to cycle between periods of growth and decline without significant long-term profitability improvements [5].