Argos reports solid start to the year

Argos reported a solid first-quarter results, with a double-digit rise in cement volumes and  price recovery in both Colombia and the US.

Consolidated revenues in the first quarter grew 27 per cent YoY, reaching COP1.7trn (US$669m). EBITDA was up by 18 per cent to COP307bn supported by structural improvements in al regional divisions as the group reported continuous achievements in operational efficiencies an discipline across al fronts of its organisation.  Net income for 1Q15 stood at COP79bn, up three per cent YoY.

Total cement dispatches were up 18 per cent YoY to 3.2Mt in the first three months of the year, while ready-mix concrete volumes rose by seven per cent to 2.5Mm³.

In its home market of Colombia, dispatches increased by 19 per cent YoY to 1.5Mta – outperforming market growth of eight per cent as of March 2015. However, the concrete business saw a seven per cent decline to around 800,0000m³.

Revenues for the Colombia division totalled COP58bn, up by 11 per cent YoY. EBITDA, however, fell by 20 per cent to COP192bn, resulting in a margin of 29 per cent, 142bps above 4Q14. The result also reflects non-recurring expenses related to the maintenance and expansion project at the Rioclaro cement works in the Antioquia department, and a temporary increase in distribution and logistics costs due to the March 2015 transport strike.

The USA division’s cement dispatches increased by 39 per cent to 635,000t. Excluding the Florida operations which were consolidated from 8 March 2014, the annual growth was 27 per cent. In the ready-mix business, 1.6Mm³ were sold in 1Q15, up by 18 per cent YoY. On a like-for-like basis, volumes were up by nine per cent.

The regional US segment achieve a 31 per cent YoY increase in revenue to US$264m, reflecting healthy organic growth as well as the successful integration of Florida assets. Supported by price recovery and operational leverage, EBITDA increased by 671 per cent YOY to US$14.1m. This result represents an EBITDA margin of 5.4 per cent for the period, 445bps above 1Q14.

Cement sales in the Caribbean and Central American division amounted to 951,000t in 1Q15, up by 15 per cent YoY. The positive market dynamics in Honduras, the consolidation of French Guiana assets and general growth in other markets offset declining volumes in Panama due to the completion of shipments to the Canal project. In terms of concrete sales, volumes reached nearly 112,000m³, 19 per cent down on the level recorded in 1Q14, mainly due to a decline in ready-mix volume sales in Panama. However, markets in the Dominican Republic and Suriname increased by 23 and 162 per cent YoY, respectively over the reporting period.

The Caribbean and Central American division registered revenues of US$134m in 1Q15, down 0.5 per cent YoY. EBITDA rose 15 per cent to US$43m, 434bps above the level recorded in 1Q14.