Loma Negra pania Industrial Argentina Sociedad Anonima(LOMA) - 2025 Q1 - Earnings Call Transcript

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]