LOMA - Earnings call transcript Q4 2020 | Loma Negra Compañía Industrial Argentina Sociedad Anónima

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Operator

Good morning, and welcome to Loma Negra Fourth Quarter 2020 Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Also Mr. Sergio Faifman will be responding in Spanish immediately following an English translation. this being note, Please Instructions] event recorded. is [Operator turn over to would now conference to like I Mr. the Pinnel, Gastón Head of Investor Relations. ahead. Please, go Gastón,

Gastón Pinnel

Thank presentation earnings yesterday welcome and and to were our everyone you. distributed Negra's release access call, Good quarter and both press fourth which the should to have close. fiscal today's call. after conference Loma XXXX market earnings By for now, year morning of

of our the of on will this Board CEO our and and call President available them for Both Faifman, me Joining the be CFO, Vice Q&A morning the be Gradin. Directors; of session. Sergio Marcos will

will refer Before changed the statements the non-GAAP to section to our turn statements. would new financial obligation Safe release. the circumstances. press This no Sergio, to I of Harbor statements is the assume filings recent release We like reflect call I to include Today's SEC. update forward-looking call I press forward-looking with to events in you over full the contain the included reconciliation following or call forward-looking make any will measures measures. The revise and also discussion to or and earnings statements corresponding or conference financial on

the Now, Sergio. call I to would like turn to over

Sergio Faifman

you Thank thank Gastón. you, Hello, today. everyone, for us joining and

you First, healthy. I and hope your family and are safe

and our some we review to of quarter provide question. and fourth and market then few results. then I the I'm walk the always, will highlights mention will you to call remarks, As through a going After your final Marcos open will financial that,

XX%, in on The the in in same cement is cement month. consolidated, we recovery fourth of dispatch yesterday, issued our around quiet increase our on encouraging control expansion us of XXX country was and on basis cost by sequential cement we The per with our shown cement and with undergoing an and EBITDA the the achieved overall reach Coupled business. release discipline the quarter expand momentum our record-high similar diligence of experienced from as growth of pricing strong saw an a as our fourth EBITDA, cement volume performance dynamics. margin enabled every our demand our outstanding the back you ton. the pathway volume division increase, quarter, points the bagged bulk grow as As to volume in

quarter in expansion adjustment Our was same of million, the the to an EBITDA XX% with $XX quarter last compared year.

of year able uncertainly while an L��Amali the solid fiscal again executing For million, full of XXXX highlight along mind I balance $XXX faces the further strategic strengthening resiliencies the and project. expansion in our we determination year, to Together, of our bearing excellent organization. with sheet and XX%, we margin the would EBITDA like results, were deliver our and to

be to later expect start We to will and this operation producing by month fully middle XXXX. clinker

Yet, we the Although, we economic challenge, need country we as battle alert the to trust Please, you to pandemic. as call additional are the getting stimulus to hand and stay environment right Marcos the and economy in coexist additional with results. who a the to financial as sector go several will the delicate Gradin, and Marcos, to now virus, continue off ahead. I and focused, review dynamics will construction with signal restriction. face remains Argentina COVID-XX will our particular. world We bring the walk our that market and whole through and

Marcos Gradin

day, Good Sergio. you, Thank everyone.

and drop year of a As fourth XXXX, XX%. fierce full drop of on you the quarter of slide of beginning estimated behind of see leaving year GDP drop an the with four, X.X% ended the can in XXXX

volumes. XX.X% industry needing decade go find to back cement the similar to XXXX, industry year full almost to X.XX a tons, the dropped For by million

bag far as bagged definitely positive In momentum our tests volumes a recovery sense, a main behind of During to of XXXX, posted outlook, activity watch bagged and around Certainly as the points which a similar in is levels. sectors a we months the the last to on quarter of trend percentage by surge for particularly by pre-pandemic The share are construction cement this sustained the reopening Surprisingly, economic XX% with volume couple XXXX expansion carefully the expansion increased the since from XX% high in of by a in different demand. started self-construction sold while cement October first January growth record XXX and faces with growth. driver in year-on-year February in revolve mid-single-digit still and in XXXX observed expectation GDP a posted is in XX.X%. economy sales, and cement quarter contribute respectively. first of quarter. strength they by of this from expanding XX% XXXX, and of level Promisingly, almost Positively, almost the demand, even industry macroeconomic XX% explained retail which we November, with cement businesses. positive this the have different for growth dynamic,

expect stable We month. on this breakdown the rather to following remain

gain bag expect up catch are some momentum the works construction to private on making public as segment demand continues lifted We again. and restriction works larger to

top-line market review XX.X% our business year-on-year which higher lime back cement by with Turning pricing. by of demand, consolidated revenues to to a core participation increased due of performance and together segment, masonry Slide stable higher the XX.X% X expanded on for revenues our by

city. year. cements segment Buenos volumes the by softer was COVID-XX quarter versus expansion the year-on-year mentioned than X% XX.X% positively were revenues positive also the by in XX.X% as being sales energetic be works declined XXXX. the private quarter highway execution the around higher lower first volume. And comparable As previous the airport the Railroad decreased main XXXX offset continues transported of Concrete revenues by lifted. mix. XX% this mildly this first impacted to growing bagged restrictions driver behind pricing Yet recovery in were pricing more in before grew same in since by Aires XX% metropolitan around year-on-year as by quarter bulk sales to cement figure increased volumes project Thus concrete as affected last quarter compared

decreased performance X.X% aggregates compensated Finally decline. X.X% partially volume a by as pricing

year ARS billion segment XXXX a suffering XXXX annual of XX.X billion increased net fiscal decline across XX.X For business core ARS revenue from segments in to our revenues declines with XX.X% all with milder X.X%.

and XX.X% was benefit in margin the basis the on core Moving the an XXX strength profit X, back up consolidated by by to volume mainly our early consumptions. of higher negotiation with expansion Slide margin for improvements for with a result expanded turn Cement decreased gross extraordinary underpinned points, from gross of prices expenses quarter business. cement from year-on-year percentage as sales basis volume. benefiting higher revenues in energy together XXX to unitary sales X% from inputs by due X. X.X% Please cost to discipline. Slide to points SG&A Energy of

stood in in was EBITDA to quarter This million. adjusted And our core our in segment expanded basis expanded XX.X% XXX energy due a up to to In mainly record margin high by volume basis XX.X%, increase points Our ton the margin $XX thanks EBITDA contributed XXX business. a basis expansion per reaching points by inputs. an $XX, sales posting mainly at EBITDA Railroad XX.X% highway pricing period EBITDA the volume. Concrete XXXX to improved third transported and to outstanding compared year margin XX% adjusted XX.X% around offset softer decrease negative partially volumes. and minus mix adjusted sales to by higher cost and margin declined worsening X.X% by in compared sequential impacted with deteriorated basis XX% out-weighted above quarter last EBITDA a to same with increasing fourth pricing and as and quarter. in level versus the

Finally structure was to aggregates margin decreased which million associated $XXX to volume million compared EBITDA adjusted sales $XXX $X of better efforts. adequacy in X.X% lower out-weighted XXXX and XXXX minus X% with being from to by cost. administrative included million in pricing commercial nonrecurring higher and costs productive EBITDA minus

denominated and position or of sale compared $XX in million line depreciation X, $XX net by continuous Measured excluding million net lower our When YguazÃº, real in Moving compared financial due explained total XX.X% driven contrast, expenses by driven rate EBITDA debt. the the to was income dollars, Income loss X XXXX than finance XXXX. financial the foreign X.X $XX a income gain discontinued the lower adjusted by US ARS related operation of operations the from a was foreign on on mostly EBITDA lower Slide and for to of Cementos higher year in million Ps.XXX our net $XXX expansion surged billion ARS fiscal lower in peso. debt was in million in by profit year XXXX to XXXX. and currency net exchange reached growth By to $XX million. million bottom fiscal from stake income billion to the to full

sheet. on Moving balance to the

out-weighted X, needs generation operational the the our As working cash higher healthy a on see a you profitability billion, can resulting of Slide capital raise. XX% Ps.X year-on-year in in higher flow quarter,

quarter, the we XX% expansion X.X to for were which of capital Ps project. made During billion, expenditure L ´AmalÃ dedicated

portion Paraguay. position, repurchase for of our the purpose related extraordinary a shareholders, share attractive we value paid expecting of dividend cash February, current out of approximately an share return million our the of company's given applying value sale the we US$XX generate greater On year. Additionally, to the a to efficiently in the program announced for with

reaching with $XX X.XX a We net financial as million end of X.XX situation a to our debt-to-EBITDA year-end XXXX. the million, times the debt ended reduction net year, During by ratio strengthened. $XXX compared times was of of with of XXXX further

would to the for final I Now remarks, back call like handover our to Sergio.

Sergio Faifman

Marcos. Thanks,

you Now remembered years will to ask of Slide to XX. as one presentation, I decade. to challenging XXXX most the wrap please turn in up the Definitely be

customers. taken we has of community That We committed is firm beginning and Since of adopt the the our monitoring are priority to of health their manage been and the and our proud families. situation. why our people, after safety look our the and to our this crisis, and people quickly action

plant, and the costing reforming never this able of needs, supported our Firstly, margin importance of expansion we we our well in project Under in of deliver EBITDA by the to lost we capital results, on resiliencies security production priorities. strong situation, a generation our of focus this with temporarily million of XXXX our sense purpose $XXX spending again were organization, XX%. context during capital of the of and excellent as as need suspend security optimizing and working

of made challenges. to Our completion new solid the project approaching are we balance us and our ´AmalÃ that strategic feel L confident sheet face ready expansion

X.X% for face economic XXXX. a coexist COVID-XX be the to economy that, to second of to are the situation semester, In sanitary we One the to getting economic stimulus up a and will semester stronger our say and country could subject to recovery yet used the construction to the growth [ph] country challenges with sector the the battle we with year-on-year several after Having in recovery focused, GDP we experience that in world first restriction. leaving remains said pandemic. to in environment and economy around Argentina, which will that some and expect the delicate decline we bring sharp how In extent virus, additional as their evolves. need XXXX, remain the continue the as and trust we signal particular. line right the could the for dynamics the construction additional Forecast sector partial and as of whole the alert Argentine a

we that the future. growth a and We for ourselves generation cash in are confident flow sustainable have positioned

would this like during unprecedented Finally, result difficult, to thank set and I without who our of been particularly solid these would people stakeholders, times. have all very

now Operator, please questions. open ready the call to question. for take are We

Operator

Thank you.

conduct Our English be Faifman the will Morgan in translation. Mr. please We Nikolaj that Spanish Stanley. responding following ahead. Instructions] question-and-answer Go Lippmann first session. note Also Instructions] now a question from is will Sergio [Operator [Operator immediately from

Nikolaj Lippmann

there. much, really thanks is on very the to related my numbers solid My strong costs. questions. taking you for Thank Congrats very question and

two of that. elements So

L´Amalí sustainability any cost petcoke? on what reduction related buying similar that at and that you you some very are to be a And the question degree, approaches again of To basically level congrats and winter the you the that numbers. rely vis-à-vis to a U.S. cost to will back First, local and have Thank you cash trying degree you market? think that in and related then do -- for do into this what gas ton addition expansion. to can reduction there to do as cost think keep degree thinking that, to what on of much -- the you of you -- invest EBITDA per will your you will

Sergio Faifman

in This they for looking forward. energy, our we year yes, considerable variable you electrical thank Language] Nikolaj, your Hi, and had our a [Foreign question. cost Regarding energy reduction energy. we cost, are sustainable believe thermal in

using future we able advantage second going petcoke. increased in way, gas comparing that going We because to more have the to line, have to be This natural run working we're in and optimize produce further L´Amalí to is an in our to winter. advantage capital the be to once

there Regarding benefits those Logically the of line fixed benefit the to line structure our is Those less. already in productivity higher improved we related already we a from thermal costs, have no already second implemented. implemented. doubt from L´Amalí, benefits most the of second are were that and costs electrical and the since

them be with what Looking we're the the structure. forward, going going line. And a we're we independently able going second same volumes past happened in better also -- to -- performance be the from the what to are produce higher to have to in

Nikolaj Lippmann

Thank you much. very

Operator

Valerio Alberto ahead. from Go is Our from next UBS. question

Alberto Valerio

on [Foreign my Language] three one quick side. I have

one year. And And dollar? in the foreign can the that long be would how debt or it's for those about it U.S. new more saw payments maturities next would get payments -- first must The official dollars for currency I go be how this for the mostly right? Loma

Marcos Gradin

it's question. you access to The debt are relying that dollars. payments situation only in It's we we change. our be There are can obviously maturity. to on FX, for the going are that use payments official going your -- one getting are those -- on to to confident thank yes. able concentrated several we are of that have U.S. we not Alberto, we maturity And to make. profile, obtain But

Alberto Valerio

any Perfect Marcos. one project steps gone long you next this much. dividends you the use in for are reaching distribute cash M&A? or Thank Loma would about net if extension or next when will year there and them, of mid is And can plan you second company my be probably the L’Amali very How the thinking Are quarter. you by firepower? the increased the

Sergio Faifman

question. working going undertaken of Hi that's to Alberto, So, currently, present committee project end that at of last Board are Language] year financial the that we that thank the of all are analyzing [Foreign after plan we alternatives Directors your the you for year is within was our on now. where further repurchase the expansion made the we is decision took L’Amali. The the

cons So, are pros the still alternatives for -- the other of use under analysis. have that cash which and

Alberto Valerio

And congrats.

Sergio Faifman

thank you and You're much. welcome very

Operator

turn Gastón we question-and-answer closing would concludes another our Nikolaj conference for we from Nikolaj Lippmann back. I another the Stanley have to This remarks. session. have to like back Lippmann Pinnel has over Wait, Morgan And question. person.

Sergio Faifman

Okay.

Operator

Nikolaj. ahead Go

Nikolaj Lippmann

thanks I you for shortly. Sorry concession rail expire will for And just if here. coming taking another wondering your was -- back. question could

an could seeing be If Thanks. sort it how base provide to now what's a right your you can of of some you're the potentially update it going on of case affect as and bit operations?

Sergio Faifman

Nikolaj XXXX. [Foreign Language] is The on railway due concession

XX years So, the renewal. original extension for this government is starting concession for had additional an and a provision the

are go did idea not able doesn't with concessionists meetings that be having be we the open the to where on and the -- So, scheme that yet. access a would formal -- entity current have operate trucks. going current trucks we to And are to on the to the information the the an have government

care So, in government the railways. And that operator of operate a to on care investment pay government of trucks. the should of maintain take then the to maintenance to national -- each way should and going is those the wagons the take yes, fee or the

this be only investments. logistic the Negra -- So, be but not reduced, we for as the should expect should costs structure that new should beneficial have Loma also

Nikolaj Lippmann

much you very Thank guys.

Operator

from is ahead. from HSBC. Go Coleman Our Clyde next question

Coleman Clyde

Thank you for Hi question. my taking gentlemen.

bag us bit in there's and give lot expect a the outlook that And reversing volumes a you in little of a much well the do have that pricing And Obviously, had as on Could color on margin bag side. did year. cement last bulk -- for versus quick of the year. the year that this breakdown, Just that carrying expect benefit volume through reverse this see you on you finished note terms obviously, XXXX? What year? you in do do momentum a strong sales kind one. more Thanks. How year? you then very of XXXX? of And the

Sergio Faifman

Hi, we this So growth Language] [Foreign Coleman, thanks expecting and for between year, your GDP for question. X%. are X.X%

do provision times not cement we a approximately. of have has a the still So a history, growth, the for multiplier taking the industry growth. two But look industry to there been

be in this in with consider Negra FX -- component dollars. provinces, to that of different a we which price of public as do and be and We in the Profitability US starting province the always as So both increases volumes. the with we bag quite many a mix is implemented. which bulk see Loma of works the also coming to a in is similar. cost from our we depreciation mention, have are And the bulk between for segment, And announcements inflation. cost part recovery -- -- in line other lower as are inflation our expectation the

have profitability. in this the impact shouldn't consolidated an So,

Coleman Clyde

it. you much. Thank very Got

Sergio Faifman

welcome. You’re

Operator

This would remarks. concludes our the question-and-answer to conference for Gastón session. closing to I Pinnel over like turn

Gastón Pinnel

updates Thank again, forward providing stay you your We to joining coming Thanks over company. you months the may available participation and the meantime, always you to the answer today. look questions that meeting remains and interest in next us your appreciate team We quarter. financial for our and any In safe. business and have.

Operator

concluded. for Thank today's you attending has conference now presentation. The

disconnect. now may You

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) 11 Mar 212020 Q4 Earnings call transcript