Financial Data and Key Metrics Changes - Total net financial costs increased to ARS3 billion in Q2 2023 from ARS0.7 billion in the same quarter last year, primarily due to higher debt and negative exchange rate effects [3] - Adjusted EBITDA for Q2 2023 was $63 million, flat compared to Q2 2022, while in pesos it decreased by 26.1% to ARS11.7 billion, with a consolidated EBITDA margin of 22.9%, contracting 608 basis points year-on-year [15][38] - Net profit attributable to owners was ARS2.5 billion, down from ARS5.4 billion in Q2 2022, reflecting lower operational results and higher financial costs [39] Business Line Data and Key Metrics Changes - Cement segment saw a decrease in sales volume of 12.4% year-on-year, with a margin contraction of 536 basis points to 27.1% [20][65] - Concrete revenues increased by 26.6% in the quarter, with volumes up 14.8%, driven by strong demand from private construction and public works [50] - Railroad revenues decreased by 13.4% year-on-year, with adjusted EBITDA down to ARS42 million, reflecting lower transported volumes [8][52] Market Data and Key Metrics Changes - Cement national industry sales showed resilience, with a cumulative record for the first half of 2023 despite a 1.9% decrease in Q2 [2] - Bulk cement dispatch mode gained market share, reaching 45% compared to 43% in Q2 2022, indicating a shift in demand dynamics [35] - The overall economic activity level is expected to remain below 2022 figures, but still robust in historical terms [19][57] Company Strategy and Development Direction - The company aims to maintain strong performance despite political uncertainty and economic challenges, positioning itself for a potentially strong second half of 2023 [25] - The strategy includes implementing price adjustments to maintain margins amid high inflation, with expectations of better margins in the upcoming quarters [46][57] - Continued focus on the Concrete business is anticipated, with expectations for growth to persist into the second half of the year [60] Management Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic struggles and political uncertainty are affecting economic activity, but the cement industry remains resilient [14] - For the second half of the year, volumes are expected to be slightly below 2022 figures, but the company remains optimistic about maintaining a strong performance [19][57] - The company is not expecting significant competitive changes in the market, despite ongoing inflationary pressures [57] Other Important Information - The company announced two dividend payments totaling approximately $120 million, maintaining a strong balance sheet with a low net debt ratio of 0.82 times [16] - Capital expenditures for the quarter were ARS3.1 billion, primarily for maintenance [53] - The company issued a Class 2 domestic bond for a total amount of $71.7 million, reflecting positive market response and investor confidence [40] Q&A Session Summary Question: What are the expectations for natural gas prices and their impact on margins? - Management expects natural gas prices to be lower than last year, with new contracts starting in September and October at reduced rates [59] Question: What are the perceptions for demand in the second half of the year, especially regarding bulk and bagged sales? - Management anticipates continued growth in the Concrete business, with expectations for demand to remain strong [60] Question: How will pricing and cost pressures be managed in light of ongoing inflation? - The company plans to implement price adjustments to maintain margins, despite potential temporary impacts from inflation [57]
Loma Negra pania Industrial Argentina Sociedad Anonima(LOMA) - 2023 Q2 - Earnings Call Transcript