Argos reports a 26% EBITDA growth in 1H23

Argos (Group Argos) had a solid operating period in the 1H23 recording an EBITDA of US$278m, an increase of 26 per cent and a sales rise of eight per cent or US$1.5bn.

During the accounting period, Argos shipped 7.9Mt of cement, a contraction of 2.7 per cent when compared with the 1H22 and 3.5Mm³ of concrete, down 6.5 per cent on the 1H23. This was caused mainly by the higher number of rainy days in the USA, the slowdown in house building in Colombia and by the difficult social and political situation in Haiti.

USA
Despite the heavy rains that occurred in the southern part of the United States and operational issues at the Newberry plant in Florida, productivity and pricing improvements allowed Argos to achieve a record EBITDA for the first half in this region, which reached US$158m and increased 41 per cent compared to the same period in 2022. Similarly, sales reached US$860m, 14 per cent higher than the previous year. Based on this, cement shipments remained steady and concrete shipments decreased by 7.8 per cent. 

Colombia
In Colombia EBITDA achieved was US$72m, an increase of seven per cent compared to the same months of 2022, and the revenues totalled US$318m, four per cent less than the first half of the previous year. 

With respect to Colombian cement volumes, there was a slight decrease of 5.6 per cent during the period. On the other hand, concrete volumes decreased by 5.5 per cent. This decrease was mainly due to a lower market dynamic and the strategy of prioritising profitability in all of its business lines. On the other hand, cement exports increased by 13.5 per cent thanks to shipments to the US.  

Caribbean and central America
Meanwhile, the company's efforts to capitalise on the opportunities in the Caribbean and central America allowed it to achieve an Ebitda in this region of US$63m an increase of 2.8 per cent over the same period of the previous year, and revenues of US$286m, an increase of 3.7 per cent compared to the 1H22. Cement shipments decreased by 3.8 per cent while concrete shipments increased by 7.5 per cent compared to the first six months of last year. 

These results were supported, to a large extent, by a satisfactory recovery in volumes in Panama and a strong dynamic in the Dominican Republic, where the company started a project to expand its cement production capacity by approximately 25 per cent. 

Argos also recently reached an agreement to evaluate viable structures that would enable the supply of aggregates to the Caribbean basin from Costa Rica. 

USB analysis of Argos' 2Q23
Analysts USB comments that Argos reported positive 2Q23. Net revenue came at COP$3332bn/ US$825.1m (UBSe COP$3,417bn), EBITDA reached COP$662bn (versus UBSe COP$560bn) and net income reached COP$101bn (UBSe COP$43bn). The company delivered volumes below last year's, with cement down five per cent and 10 per cent down for ready-mix LfL. Furthermore volmes in the US  were down five per cent YoY on cement and ready-mix declined by 12.5 per cent.