Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) Q4 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The financial performance shows mixed results: a significant revenue decline but improved EBITDA margins and net profit. The Q&A reveals uncertainty in dividend distribution and CapEx plans, with some positive outlook for 2025. The market recovery expectation and debt reduction are positive, yet economic and regulatory risks persist. Overall, the sentiment is neutral as the positive and negative factors balance out.
Key Financial Performance
EBITDA $50 million, up 2.4% year-over-year, driven by strong performance in the cement segment and improved cost management.
EBITDA Margin 29%, improved from 22.8% in Q4 2023, reflecting a 600 basis point expansion due to cost efficiency.
Consolidated Revenues ARS 699 billion, down 23.9% year-over-year, primarily due to a weaker performance in the cement segment.
Gross Profit Stable at 0.1% year-over-year, with gross margin expanding by 640 basis points to 32.6% despite lower volumes.
Net Profit ARS 22.4 billion, compared to a net loss of ARS 43 billion in Q4 2023, supported by improved financial results and lower financial costs.
Net Debt ARS 162 billion, down from 1.4x to 0.89x net debt-to-EBITDA ratio, reflecting a $20 million sequential reduction.
Cash Flow from Operating Activities ARS 47.8 billion, down from ARS 57 billion in Q4 2023, primarily due to less favorable working capital impacts.
Adjusted EBITDA for the Year $198 million, down 17% year-over-year, but with a margin expansion of 211 basis points to 25.10%.
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Operating Highlights
Market Positioning: 2024 was a challenging year for the construction sector, with a significant decline in cement consumption. However, the company anticipates a recovery in 2025, supported by improved economic conditions and renewed credit availability.
Market Expansion: The company expects double-digit growth in 2025, driven by the initiation of large-scale projects and a significant housing gap in Argentina.
Operational Efficiency: Loma Negra achieved a significant expansion of its EBITDA margin by over 600 basis points, reaching 29% despite lower volumes.
Cost Management: The company implemented effective cost management strategies, which helped mitigate the impact of a weaker top line and supported margin expansion.
Strategic Shift: The company views 2024 as a transition year, focusing on improving operational efficiencies and preparing for future growth opportunities.
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Risk or Challenges
Market Demand Risks: The downturn in the construction industry has reduced demand for Loma Negra's products, leading to a significant decline in sales volumes and revenues.
Economic Factors: The company faces challenges due to economic instability in Argentina, which has affected cement consumption and overall market conditions.
Regulatory Issues: Suspension of many public works projects as they await the establishment of a new regulatory framework has further impacted the construction sector.
Competitive Pressures: Increased competition in the concrete segment has led to pricing pressures, negatively affecting profit margins.
Supply Chain Challenges: The company has experienced fluctuations in energy costs and supply chain disruptions, impacting operational efficiency and cost management.
Financial Risks: Despite a reduction in net debt, the company remains exposed to financial risks related to currency fluctuations and interest rates, particularly with a significant portion of debt denominated in USD.
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Guidance & Outlook
Sustainability Report: Released a new sustainability report aligning with 2030 goals, focusing on energy and water optimization, carbon footprint reduction, and social inclusion programs.
Debt Management: Reduced net debt by $20 million, reaching $157 million, with a net debt ratio below 1x.
Capital Expenditure: Invested ARS 21.2 billion in capital expenditures, primarily for 25-kilogram bags projects and maintenance.
Market Recovery: Anticipated recovery in cement consumption driven by improved economic conditions and renewed credit availability.
2025 Growth Outlook: Expecting double-digit growth in 2025 supported by economic expansion and new credit rules.
Cement Consumption: Cement consumption per capita is at historically low levels, indicating significant growth potential.
Financial Projections: Forecasting a recovery in cement consumption due to the initiation of large-scale projects.
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Shareholder Return Plan
Net Debt Reduction: Net debt declined by $20 million, reaching $157 million.
Net Debt to EBITDA Ratio: Net debt-to-EBITDA ratio reduced to 0.89x.
Cash Flow from Operating Activities: Cash flow from operating activities reached ARS 47.8 billion.
Capital Expenditure: Invested ARS 21.2 billion in capital expenditure.
Financial Activity: Used ARS 31.2 billion in financial activity, mainly for repayment of borrowings and interest payments.
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Key Q&A
Q:How should we think of strategies for pricing into 2025?
A:In 2025, we believe that the pricing dynamic is going to be similar to the one we saw in the last couple of years. Maybe with a deceleration of inflation, we're going to have more space between price increments compared to the years with low inflation.
Q:What do you expect for volume this year?
A:For 2025, we are expecting an increase of two digits year-on-year, maintaining the volumes that we had in the last part of 2024.
Q:Could we expect dividends for this year?
A:With a more clear scenario in terms of volume for 2025, we are analyzing with the board the best way to go in terms of capital allocations for 2025.
Q:Did you see any points of pressure in your cost structure for 2025?
A:We have seen some improvements in terms of energy inputs and are working hard in terms of efficiency and cost management.
Q:Could you guide us on CapEx for 2025?
A:For this year, we have only maintenance CapEx, and we are not expecting any further disbursement in CapEx, just maintenance CapEx.
Q:Could you give us a ballpark number for maintenance CapEx for 2025?
A:Between all the business, between $55 million, $60 million approximately.
Q:What is the remaining CapEx to complete the 25-kilo bag project?
A:The remaining CapEx for the 25-kilogram bag projects is approximately $20 million.
Q:Review of Unclear Management Responses
A:Management did not provide a clear answer regarding the potential for dividend distributions in 2025, stating they are still analyzing capital allocation without committing to a specific outcome.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ARS capital
Aires province
Buenos Aires
CO
Chief
Officer
action
aggregate
average cement
cement segment
contract
cost control
decline sale
development
diversity
emission
equivalent
expansion
gap
goal
grain
inclusion
industry average
kilometer
margin improvement
material
people
principle
product
reduction
resilience industry
sale mix
segment cost
segment decline
segment margin
shift
sustainability
territory
ton cement
water
weight
LOMA Transcript
Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) Q3 2025 Earnings Call Transcript
Unknown11-7
The earnings call reveals several challenges: declining revenues across segments, increased leverage, and working capital challenges. Despite some optimism in volume performance, the company faces significant financial pressures, including FX exposure and competitive pressures. The Q&A section highlights uncertainties in pricing and dividend plans, adding to investor concerns. Overall, the sentiment leans negative due to financial struggles and lack of clear positive catalysts.
Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) Q2 2025 Earnings Call Transcript
Neutral8-8
Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) Q1 2025 Earnings Call Transcript
Unknown5-7
The earnings call presents a mixed outlook. While there is optimism for double-digit growth in 2025 and a strong EBITDA margin, current financial metrics show a decline in revenue and net profit, alongside increased net debt. The Q&A reveals stable market share but lacks clarity on key projects. Economic, competitive, and supply chain risks persist, impacting sentiment. With no new partnerships or significant guidance changes, the stock reaction is likely neutral, reflecting both positive long-term growth potential and short-term challenges.
Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) Q4 2024 Earnings Call Transcript
Unknown3-7
The financial performance shows mixed results: a significant revenue decline but improved EBITDA margins and net profit. The Q&A reveals uncertainty in dividend distribution and CapEx plans, with some positive outlook for 2025. The market recovery expectation and debt reduction are positive, yet economic and regulatory risks persist. Overall, the sentiment is neutral as the positive and negative factors balance out.
LOMA Report
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