Core Viewpoint - The construction materials industry is focusing on green, low-carbon, and high-quality development during the "14th Five-Year Plan" period, achieving significant advancements in various areas such as industrial structure, technological development, and digital transformation. The upcoming "15th Five-Year Plan" is seen as a critical period for innovation and transformation in the industry [1]. Group 1: Industry Upgrades and New Growth Engines - During the "14th Five-Year Plan," the construction materials industry accelerated its full supply chain upgrade, with the processing products sector accounting for 66%, an increase of 8 percentage points from 2020 [2]. - The industry is witnessing the emergence of three major growth engines: optimization of traditional materials, development of inorganic non-metallic new materials, and integration of non-metallic mineral resources [2]. - Green building materials, photovoltaic glass, and fiberglass composite materials have become the "new three samples" of high-quality development in the industry, with green building materials revenue exceeding 250 billion yuan, growing at an annual rate of 20% [2]. Group 2: Carbon Neutrality and Environmental Initiatives - The construction materials industry has achieved carbon peak status, marking its entry into the carbon neutrality era [3]. - The industry will implement a dual control system for total carbon emissions and intensity during the "15th Five-Year Plan," with an increased focus on carbon reduction efforts [3]. Group 3: Integration of AI and Smart Manufacturing - The integration of artificial intelligence (AI) technology is accelerating the transformation of the construction materials industry towards smarter, greener, and higher-end production [4]. - By 2024, the numerical control rate of key processes in the industry is expected to reach 66.5%, with the emergence of digital mines, smart factories, and industrial internet platforms [4]. - A series of world-leading technologies and products, such as zero-purchase electricity demonstration plants and carbon capture technologies, have been showcased, indicating significant advancements in the industry [4]. Group 4: Quality Control and Automation - The industry is moving towards a fully automated quality control system, with significant improvements in efficiency and accuracy in production processes [5]. - The implementation of AI predictive models allows for proactive quality management, reducing energy consumption by 12% compared to similar production lines [5]. Group 5: Demand-Driven Development and Material Quality - The construction materials industry is shifting from a production-oriented model to a demand-driven model, enhancing brand building and service support systems [7]. - The industry emphasizes the importance of "good materials" in constructing "good houses," focusing on health, safety, environmental sustainability, and quality [8]. - The China Building Materials Federation is promoting the development of a "good materials" supply system to facilitate industry transformation and upgrade [9].

Financial Data and Key Metrics Changes - Sales volume increased by 7.1% year over year, driven by stronger demand for cement and concrete, particularly for infrastructure projects [4] - Consolidated EBITDA reached $130.2 million, a 9% increase compared to the same period last year, despite rising expenses from collective bargaining negotiations [4][11] - Revenues for the quarter increased by 5.9% year over year, totaling $484.1 million, with gross profit rising by 11.2% [11] - Net profit surged by 29.9% this quarter compared to the same period last year, attributed to increased revenues and reduced financing expenses [16] Business Line Data and Key Metrics Changes - Cement sales rose by 6.3% this quarter compared to the same period last year, with gross margin increasing by 3.2 percentage points [14] - Concrete, pavement, and mortar sales increased by 9.8% this quarter, driven by projects like the Piura Airport, although gross margin decreased by 3.2 percentage points due to project execution costs [15] - Precast materials sales grew by 4.1% this quarter, with a gross margin decrease of 1.5 percentage points [16] Market Data and Key Metrics Changes - The company is positioned to benefit from ongoing infrastructure projects in Peru, addressing significant infrastructure and housing deficits [5][6] - The introduction of new ports, such as Shanghai, may alter competitive dynamics, particularly affecting areas close to the port [28][29] Company Strategy and Development Direction - The company emphasizes its role in addressing infrastructure challenges in Peru, focusing on delivering high-quality products that enhance quality of life [5][6] - The strategy includes public-private partnerships to finance infrastructure projects, showcasing the benefits of concrete solutions [7][9] - The company remains optimistic about future growth, expecting to maintain a positive trend in sales volumes and profitability [10][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a single-digit growth trend in sales volumes for the second half of the year, contingent on the timely execution of infrastructure projects [21] - The company plans to sustain its capital expenditures at around 100 million soles annually, focusing on maintenance rather than significant capacity increases [22] - Management indicated that EBITDA margins are expected to remain stable between 28-29% [25] Other Important Information - Administrative expenses increased by 13.8% in Q2 2025 compared to Q2 2024, primarily due to higher personnel costs from union bonuses [12] - The net debt to EBITDA ratio stands at 2.6 times, which management considers a comfortable level [17] Q&A Session Summary Question: Expectations for volumes in the second half - Management expects a continuation of the single high-digit growth trend for volumes, dependent on infrastructure project timelines [21] Question: CapEx expectations for the second half - Management indicated sustaining CapEx around 100 million soles annually, with no substantial increases planned [22] Question: Margin expectations for the second half - EBITDA margins are expected to remain stable between 28-29% [25] Question: Dividend distribution expectations for 2025 - Management stated that dividend decisions are made at the board level, with no anticipated changes to the consistent dividend policy [25][26] Question: Impact of CEMEX using Shanghai port on competitive dynamics - Management noted that while new ports may influence market dynamics, the primary impact would be localized to areas near the port [28][29]

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]