Loma Negra (LOMA) Q1 2025 earnings summary

Executive summary

• Net revenues for 1Q25 were ARS 163.2 billion (US$149 million), down 8.9% year-over-year, mainly due to a 10.9% decline in the Cement segment's top line, despite volume rebounds and soft pricing.

• Consolidated adjusted EBITDA reached ARS 39.2 billion (US$40 million), a 3.2% year-over-year decline, but margin expanded to 24%, up 140 basis points.

• Net profit attributable to owners was ARS 21.5 billion, down 73% from ARS 79 billion in Q1 2024, mainly due to lower financial results and inflation adjustments.

• Cement volumes increased 8.9% year-over-year, with bagged cement outperforming bulk; other segments also saw double-digit volume growth.

• Management remains optimistic, citing forecasts for 5% GDP growth in Argentina and a recovering construction sector.

Financial highlights

• Gross profit declined 4.7% year-over-year, but gross margin improved by 116 basis points to 26.4%.

• SG&A expenses decreased by 7.8%, but as a percentage of sales increased to 11.7%.

• Net debt increased sequentially to ARS 187 billion (US$174 million), with a net debt/EBITDA ratio of 0.96x, up from 0.89x at end-2024.

• Cash and investments stood at ARS 10.6 billion at quarter-end.

• Cash flow used in operating activities was ARS 1.3 billion, a significant improvement from ARS 12 million used in Q1 2024.

Outlook and guidance

• Industry recovery is expected to strengthen if Argentina achieves projected GDP growth, with double-digit cement volume growth anticipated for 2025.

• Pricing per ton is expected to remain sustainable around US$115, with potential for increases if costs rise.

• Ongoing tenders in concrete and mining, and public works are expected to support demand in the second half of the year.

• Macroeconomic stabilization and recent policy changes in Argentina are expected to support growth and attract foreign investment.

• Management expects continued recovery in cement consumption, with April volumes up 28% year-over-year and 13% sequentially.