Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Consolidated Adjusted EBITDA Margin Contracted to 20.8% in the quarter, reflecting a 23.7% reduction year-over-year. This was due to higher cost pressures, including seasonally affected energy costs during the winter period.
Net Debt Declined by $9 million quarter-over-quarter to $206 million. This was achieved through improved maturity profile and maintaining a comfortable leverage metric.
Revenue in Cement, Masonry Cement, and Lime Segment Declined 13.2% year-over-year, driven by a 5.4% contraction in volumes and softer pricing year-over-year. Bagged cement was particularly impacted due to weaker retail and residential demand.
Concrete Revenues Remained broadly flat year-over-year as a 37.8% increase in volumes offset softer pricing dynamics in a competitive environment.
Aggregate Segment Revenue Declined slightly by 0.8% year-over-year. Sales volumes rose 26.3%, driven by higher activity in road construction and railroad projects, but pricing was affected by a sales mix favoring lower-priced fine aggregates.
Railroad Segment Revenue Declined 14.9% year-over-year. Transported volumes decreased by 3.9%, and weaker pricing was compounded by disruptions in the Bahia Blanca railway line, affecting longer-haul traffic.
Consolidated Gross Profit Declined 32.5% year-over-year, with gross margin contracting by 524 basis points to 17.3%. This was due to weaker pricing and higher winter energy costs, although effective cost management helped mitigate some impacts.
SG&A Expenses Decreased 11.7% year-over-year, mainly due to lower freight and sales tax expenses, reduced sales volumes, and lower salaries and consulting fees. As a percentage of sales, SG&A remained flat at 9.1%.
Net Loss Attributable to the Company Totaled ARS 8.5 billion for the quarter compared to a net gain of ARS 27.9 billion in the same quarter last year. This was driven by weaker operational performance, lower financial results, and higher FX exposure.
Net Debt-to-EBITDA Ratio Increased to 1.49x from 0.89x at the end of 2024, reflecting higher working capital requirements and lower operational results.
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Operating Highlights
25-Kilogram Bagging Project: The company successfully launched the new 25-kilogram bags, which were well-received by customers and final consumers.
Market Recovery: The cement industry experienced a temporary slowdown due to electoral uncertainty, but October volumes showed a 7.4% year-over-year increase, indicating renewed strength.
Public Infrastructure Projects: Provincial-level public works gained momentum, contributing to bulk cement dispatches.
Adjusted EBITDA: Adjusted EBITDA for the quarter was $36 million, reflecting a 23.7% year-over-year decline. The EBITDA margin contracted to 20.8%.
Cost Management: Effective cost management helped offset weaker pricing, with reductions in thermal energy prices and maintenance costs.
Debt Management: Net debt declined by $9 million quarter-over-quarter to $206 million, and the company issued a $113 million Class 5 bond to improve its maturity profile.
Economic Stability and Investment: The recent electoral outcome and ratification of the government’s economic plan are expected to provide stability and unlock investment projects.
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Risk or Challenges
Economic Uncertainty: The broader economy is slowing, and the electoral process has created uncertainty around the sustainability of the economic framework. This has negatively impacted shipping levels and overall industry activity.
Higher Interest Rates: Higher interest rates in pesos have adversely affected shipping levels and increased financial expenses, impacting operational performance and working capital requirements.
Weaker Cement Demand: Cement dispatches declined by 1% in the quarter, with bagged cement being the most impacted due to weaker retail and residential demand. This has led to a 13.2% year-over-year revenue decline in the cement segment.
Pricing Pressures: Softer pricing dynamics in a highly competitive environment have affected revenues across multiple segments, including cement, concrete, and aggregates.
Railroad Disruptions: Ongoing disruption of the railroad line in Bahia Blanca has reduced longer-haul traffic, impacting revenue generation in the railroad segment.
Energy Costs: Seasonal higher energy costs during the winter period have added cost pressures, although partially mitigated by effective cost management.
FX Exposure and Peso Devaluation: The devaluation of the peso and higher FX exposure have led to a net financial loss, further weakening the company's financial results.
Increased Leverage: Net debt-to-EBITDA ratio increased to 1.49x from 0.89x, reflecting higher leverage and reduced cash flow generation from operational activities.
Working Capital Challenges: Economic uncertainty and higher interest rates have increased working capital needs, coupled with higher income tax payments.
Competitive Pressures in Concrete Segment: The concrete segment experienced a significant decline in EBITDA margin due to softer pricing dynamics and high competition, despite higher volumes.
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Guidance & Outlook
Future Cement Industry Recovery: The company expects the recent electoral outcome and the ratification of the government economic plan to provide stability, potentially unlocking investment projects that have been on hold. This is anticipated to gradually restore the recovery of the cement industry.
October Cement Volume Growth: October's cement volumes showed a 7.4% year-over-year increase, indicating renewed strength in the market.
Bulk Cement Dispatches: Bulk cement dispatches are expected to continue performing well, supported by industrial and commercial projects, larger housing developments, and provincial-level public works.
Bagged Cement Demand: Bagged cement demand remains under pressure due to weaker retail and residential consumption, with no immediate recovery indicated.
Economic Growth Expectations: Full-year growth expectations for the Argentine economy have been revised down to around 3.9%, reflecting a weaker economic environment.
Operational Readiness: Loma Negra remains focused on optimizing performance and is prepared to support Argentina's development when economic conditions normalize.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:How does the company see the pricing approach and evolution for prices in dollar terms moving forward?
A:The company expects to adjust prices above inflation in the second half of the year. While FX corrections impacted prices in dollar terms this quarter, they anticipate recovering prices in better terms with a more stable FX scenario.
Q:What is the management's view on the likelihood of dividend distribution for this year or 2026?
A:Due to the macro situation in Argentina, including high interest rates and political uncertainty, the company has not advanced in paying dividends this year and does not expect to do so for the remainder of the year. They will reconsider dividend payments next year based on the new macro scenario.
Q:What drives the better-than-expected performance in volumes for October, and are these dynamics expected to continue for November and December?
A:The better-than-expected performance in October was driven by delayed infrastructure investments before elections and the FX adjustment, which lowered costs in dollar terms, enabling projects to gain pace. The company is optimistic about November and December, expecting stable FX, low rates, and public works to further boost activity levels.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the exact pricing evolution in dollar terms and used general terms like 'adjusting prices above inflation' and 'recovering prices in better terms.' Additionally, while they mentioned reconsidering dividend payments next year, no concrete plans or criteria were shared.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ARS decline
ARS gain
Cement segment
Class bond
President CEO
Railroad
addition
bond issuance
cement industry
cement lime
completion
consumption
contraction
cost pressure
depreciation
dispatch mode
dispatch volume
disruption
dynamic environment
election
grain gypsum
gypsum sand
hand
haul traffic
income tax
industry dispatch
industry recovery
inventory
leverage
line haul
peso balance
rate peso
sand generation
segment result
tariff
traffic grain
uncertainty
unit
volume pricing
winter
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
Frequently Asked Questions
Where does this earnings call transcript come from?
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Why do some answers appear as “Unclear” or “Inaudible”?
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Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
