Argos closed the first half of 2014 with an 87 per cent increase in net profit driven by acquisitions and positive market trends, most notably in the US which generated earnings in the second quarter that were almost twice the EBITDA of full year 2013 in the regional division.
The company's consolidated second quarter EBITDA rose to US$142m, some 11 per cent higher than the year before. Over the first six months of the year, EBITDA reached US$272m, 12 per cent higher YoY despite non-recurring expenses amounting to almost US$20m, mainly stemming from recent acquisitions.
After integrating the cement and concrete assets that were acquired in Honduras, Florida and French Guiana, consolidated revenues for the first half rose by about 18 per cent. Cement and concrete sales volumes increased by 9.3 and 17.9 per cent, respectively.
“The results that were recorded for this second quarter came from a solid demand in most of the geographies in which we operate. It is especially satisfactory to see the recovery of profitability in the United States, the successful integration of the company’s recent acquisitions and the strategic advantage that Argos draws from the fact that it operates in 12 countries, with dynamic markets and different economic cycles,” says Jorge Mario Velásquez, Argos’ CEO.
In the United States, second-quarter EBITDA was nearly twice as high as that generated in the whole of 2013. The strong performance was driven by increasing sales volumes during the first semester, with a 59 and 27 increase in cement and concrete dispatches, respectively.
In Argos’ domestic market of Colombia, it reported a three and seven per cent increase in its cementitious and concrete sales, respectively. Revenues amounted to more than US$604m for the first half of 2014, which similar to last year’s results. During this period, the company noted an increase in bulk sales as well as positive trends in housing construction, thanks to a higher number of building permit approvals, the continuation of mortgage subsidies and the first contracts being awarded for 4G contracts. During the period, Argos also opened a new distribution centre in Cartegena, allowing the company to serve the northern region more efficiently.
In the Caribbean and Central American division, during the first half revenues rose 20 per cent while EBITDA improved 38 per cent, reflecting the positive effect of including the results of operations in Honduras and the grinding facility in French Guiana.
