Loma Negra posts 9% drop in 3Q net profit

Loma Negra reported a net sales revenue of ARS180,686m (US$185m) in the third quarter of 2024, down 21.2 per cent YoY due to a 21 per cent drop in sales volumes of the company’s cement business. Sales volumes of cement, masonry and lime decreased by 17.1 per cent YoY to 1.44Mt in the 3Q24 but bagged cement dispatches are showing a quicker recovery. Bulk cement has been more impacted by the economic environment, the public works standstill and lower activity levels in larger private projects – all compounded by a softer pricing dynamic, according to the company.  Concrete volumes fell by 22.2 per cent YoY to 0.12Mm3. Aggregates volumes were down 28.7 per cent YoY to 0.24Mt while the railway segment reported a seven per cent decline in volumes to 1.08Mt.

Consolidated adjusted EBITDA fell by 18.5 per cent YoY to ARS43,279m in the 3Q24 while in US dollar terms, it declined by 16.5 per cent to US$55m. The consolidated adjusted EBITDA margin expanded by 78 basis points to 24 per cent from 23.2 per cent in the year-ago period, despite lower volumes.

There was an 8.7 per cent decline in net profit in the 3Q24 to ARS21,153m from ARS23,177m in the 3Q23. The lower operational result was partially offset with an improvement in the net total finance gain.

The company’s net debt decreased to ARS171,888m, representing a net debt/LTM adjusted EBITDA ratio of 1.03x, compared to 1.40x in FY23, reflecting a reduction in indebtedness of US$40m during the quarter.

Commenting on the financial and operating performance for the third quarter of 2024, Sergio Faifman, Loma Negra’s CEO, noted: “We are pleased to present Loma Negra’s third-quarter results. Industry volumes this quarter showed a strong sequential improvement, rising 25 per cent. While still below last year’s levels, the steady recovery in activity signals
that the most challenging period is behind us.

“While economic challenges persist, we are already seeing encouraging results that give us confidence we are in the final stages of a transitional phase. As macroeconomic factors stabilise and the economic landscape improves, we anticipate a much stronger recovery ahead,” he added.

January-September 2024
The company posted a 25.3 per cent decrease in net revenue to ARS485,991m in the 9M24 from ARS650,629m in the 9M23. Cement, masonry and lime volumes were down 26.6 per cent YoY to 3.59Mt. Concrete volumes saw a 36.5 per cent drop to 0.29Mm3 while aggregates volumes fell 31.2 per cent to 0.69Mt. Volumes sold by the railway segment were 18.6 per cent less than in 2023, falling to 2.61Mt.

Adjusted EBITDA fell by 22.9 per cent YoY to ARS120,708m in the 9M24 from ARS156,574m in the year-ago period. The adjusted EBITDA margin increased by 77 basis points to 24.8 per cent from 24.1 per cent over the same period.

Net profit surged by 102.2 per cent to ARS121,735m in the 9M24 from ARS60,210m in the equivalent period of the previous year.