Argos, (Grupo Argos) recorded revenues and strong demand for cement and ready-mix, mainly in the United States and Colombia, as well as stable operating results in an environment of high-cost inflation helped by its strategy, the flexibility of its fuel matrix and the partial hedging of fuel prices.
From April to June 2022 (2Q22), the cement company generated revenues for COP2.9trn (US$670m), 15.3 per cent higher compared to the same months of the previous year. Also, it obtained an adjusted EBITDA of close to COP525bn, 2.6per cent higher than the second quarter of 2021. Net income decreased compared to 2021 due to non-recurring operations of asset sales that were reflected in the results of the second quarter of 2021.
It is noteworthy that the adjusted volume of ready-mix in the period rose 13.4 per cent and reached 1.9Mm3, while the adjusted volume of cement stood at 4.2Mt, representing a comparable growth of 6.2 per cent if the trading business is excluded and a decrease of four per cent in general.
USA
During the second quarter, revenues in the USA were US$416m, 7.5 per cent higher than those registered in the same months of 2021. Adjusted EBITDA, remained stable at US$75m, results achieved in part by the US$11m in savings derived from the fuels hedging strategy. Regarding adjusted volumes, the company experienced strong demand across most of its operations. Therefore, dispatches of ready-mix rose 6.4 per cent and totalled 1.2Mm3, as did cement dispatches, which also increased 6.4 per cent and totalled 1.7Mt.
Colombia
The strong market dynamics continued during the second quarter of the year, supported by the retail segment, residential construction, and infrastructure projects. In the country, Argos' revenues grew 27.1 per cent, reaching COP678bn, and adjusted EBITDA increased 12.7 per cent, totalling COP136bn.
Continuing with the positive performance, concrete sales rose 25.1 per cent and reached 656,000Mm3, cement sales increased 13.3 per cent, for a total of 1.5Mt shipped from April to June.
Caribbean & Central America
In the second quarter, revenues were USD138m, while adjusted EBITDA closed at USD32m, 18.8 per cent below the same period of the previous year, affected by the combination of lower volumes in Honduras and Haiti and the already known inflationary pressures.
In this region, shipments of concrete were positive, increasing 58.9 per cent and stood at 71,000Mm3. For its part, cement volumes reached 1Mt, with an improvement in those of the local market with respect to the first quarter of the year and a lower dynamic on the trading business, which resulted in a decrease in shipments of 30 per cent cement. If this line is excluded, cement volumes fall 4.7 per cent.
Calcined clay project
In line with its commitment to sustainability and, specifically, to the reduction of emissions, the company began a pilot test for the use of calcined clay in the United States and expects to reach production of 3Mta of clay in all of its geographies by 2030, which translates into the production of green cement and concrete.
“The calcined clay pilot that we are starting in the USA is another important milestone in our roadmap to produce carbon-neutral concrete by 2050. The results of the second quarter were very positive both in terms of revenue growth and volumes; driven, mainly, by the solidity of demand in the United States and the good dynamics of the Colombian economy amidst a challenging situation of high inflation and increase in interest rates” said Juan Esteban Calle, CEO.
