Loma Negra (LOMA) Q2 2024 earnings summary

Executive summary

• Net revenues for 2Q24 were ARS 136.1 billion, down 28% year-over-year, mainly due to a 32.5% drop in cement segment volumes, but sequential recovery signs appeared late in the quarter.

• Adjusted EBITDA reached ARS 38.3 billion, down 11.7% year-over-year, with margin expanding to 28.1%, up 520 basis points year-over-year.

• Net profit attributable to owners was ARS 29.6 billion, up from ARS 9.5 billion in Q2 2023, driven by operational improvements and financial gains.

• Demonstrated operational resilience and flexibility, with gradual recovery in cement volumes and strong cost control.

• Balance sheet remains strong with net debt of US$217 million and a net debt/LTM Adjusted EBITDA ratio of 1.26x, improved from 1.40x at FY23.

Financial highlights

• Cement, masonry & lime revenues fell 26.1% year-over-year, with volumes down 32.5%, partially offset by strong pricing.

• Concrete revenues dropped 47.1% year-over-year, with volumes down 45.2%.

• Aggregates revenues declined 35.6% year-over-year, with volumes down 24.9%.

• Railroad revenues decreased 14.5% year-over-year, with volumes down 22.5%, but margin expanded to 6.3%.

• Gross profit margin for 2Q24 was 27.0%, up 329 bps year-over-year.

Outlook and guidance

• Management expects further recovery in cement volumes and industry activity in the second half of 2024 as macroeconomic stabilization continues.

• Margin expansion expected to persist, supported by operational efficiencies and normalization of key economic variables.

• Recovery in public and private works anticipated, supported by lower inflation, increased credit, and regulatory changes (RIGI).