LOMA - Earnings call transcript Q1 2021 | Loma Negra Compañía Industrial Argentina Sociedad Anónima

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Operator

Good morning, and welcome to Loma Negra’s First Quarter 2021 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, Sergio Faifman will be responding in Spanish immediately following an English translation. [Operator Instructions] Please note that this event is being recorded. to conference like to now would turn over the Mr. I Head of Pinnel, Investor Gastón Relations. ahead. go Please

Gastón Pinnel

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

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

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

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

Sergio Faifman

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

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

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

and relate stabilizing XXX around XX.X% world-class operational levels. our to our in accelerating of profitability input in production [indiscernible] leverage in margin strong performance together mainly and year’s first EBITDA now sales basis higher us by enable we points. with our expand yesterday, back the great we our last this quarter had grow by release from saw the The good performance to cement a volume momentum The cement business. could issued you As are pre-pandemic experienced on in

the EBITDA XXXX, the COVID-XX million lockdown $XX in pandemic first quarter quarter $XX million adjustment Our when establishes. in was compared to where

profitability capital working our Our ratio X.XX levels, a solid into cement flow and structure tier top times. focus management on debt a with capital strong deleveraging generation of net and our cash result our

you continue Full Finally, start review L´Amalí Gradin, the I project, will and commissioning Marcos. off Marcos is of we our market financial coming towards call to walk to the move next the which days. programming second our expansion the to clinker hand completion strategic of through expect in results. producing for Please, we line will now who month.

Marcos Gradin

Thank you, Sergio. Good day, everyone.

to the industry much first month see case the format. the As year sales in X.X% in you figures. drops months the around last the two stabilized of stronger, double-digit X, estimated the the contracted ended year, the of X.X%. volumes, in the In behind the sales, on an the recovery seems XXXX, XXXX. was of and around After GDP of a can the quarter have drop with seven Slide XXXX, increase national in of second the first since economic beginning of quarter of amount activity steady collapse bagged And of leaving first especially fierce pre-pandemic

to The X% first in is tons Consequently, up almost in started Bulk segment, almost the to XX% quarter contribute is increased which first this bagged XX% a than lagging with growth of XXXX. lower which quarter quarter main when posted cement X.X only by points compared sales, First percentage XXXX in XXXX, behind volumes around of total XXXX year-on-year from cement of and quarter positive first still trend almost bulk XXXX. XXXX, sold driver than basis by figures posted year-on-year quarter behind increase XXX quarter million but XX%. first first an first X% X% XXXX. XX.X% higher quarter

month could bulk economy our expansion total construction the resumption. We and rather on expectation an lockdown. In for the stable the were far XX% the the the still industry sense, with initial affect about and from COVID-XX definitely macroeconomic remain compared XXXX moderate outlook April wave XXX% last increase second the pre-pandemic when on they to carefully GDP recovery. of projects sectors expect uncertainty as to affected respectively, faces around presented different different whole economic by figures reopening growth most Naturally The are breakdown trend to major year, the cements and mid-single these the following Certainly, digit are businesses. whether as particularly tests, macroeconomic with outstanding for levels. March we context watch a revolve although

Turning by positive around momentum experienced the to pre-pandemic Consolidated a Slide line review on which by core of our X stabilizing XX.X% levels. segment cement is segment. top now for business, year-on-year increased revenues mainly reflecting performance our by

of sales and poor of XX.X% by offset same the in revenues with levels quarter sales Aggregates but Railroad was a from pricing with XXXX environment. XX.X%, By in with volumes quarter up yet volumes posted recovery. posted mix. end the XX.X% versus COVID-XX higher volume distant positive higher established in performance. contrast, decreased with as was I’m XXXX, a in lime contain of increase experiences lockdown first XX.X% revenue the segment volumes pre-pandemic sales first pricing recovery masonry a as more the quarter pricing. transported path it pricing all volume the Concrete from revenues continuing by negative mind the quarter year, Cement, bearing segments Additionally, mild in with a a that expanding the increase to XX% stable last outbreak cement than coupled were

X. year-on-year profit Consolidated expanded gross the quarter Moving points. on Slide by XX% up to margin was XXX basis for with

prices basis last Cement year’s of early from for the level. from profiting of XX with mainly higher by pulse negotiations, percentage the level higher to from expanded X.X% Energy by to together X.X%, to inputs leverage in expenses margin reinforced operational core compared sales energy our higher revenues points of dilution business. and decreased result Please as in discipline. cost turn back volume improvements Our costs due cement Slide gross X. benefit and cost to for consumption. SG&A a unitary

adjusted EBITDA is consolidated mainly class volumes per segment quarter, business. increase $XX best in points improved and transported adjusted ton EBITDA stood sales at and million around XXX expanded impacted XX.XX%, a EBITDA the Railroad deteriorated in basis partially to performance by sequentially unitary the core a by XX% EBITDA Our volumes of costs quarter volumes. higher mainly sales. XXX increase $XX. year reduction decreased to up last margin the XXXX Concrete to the inputs. pricing which mainly price compared basis X% offset margin period to first and the of was and XX.X%, X% thanks expanded basis and and highway In softer by energy basis respectively in SG&A in costs EBITDA in XX.X% to adjusted to by in with compared and our due XXX This sales points increase outweighed margin same expansion points,

out-weighted volumes XX.X% to and margin with low leverage. EBITDA from pricing better improved XX.X% adjusted still sales by minus minus depressed aggregates operational Finally

gain levels XXXX. finance line Total surge bottom net the compared on stood by gain, XXX% driven finance at and net to EBITDA Moving affected quarter by Slide million initial on to by profits lockdowns. growth ARSXXX XXXX to compared of of $XX quarter XX, first to net XXXX, to loss million our first position quarter gain million of quarter presented first a in million loss compared in XXXX million in ARSXXX net as ARSXXX first quarter monetary first a ARSXXX XXXX

loss operating the also ARSXX ARSXXX first Additionally, in XXXX. presented rate exchange gain million quarter difference of of million a

Finally, the by total for U.S. declined by quarter dollars, the our debt. net Measured was in quarter million million first to financial compared to same $XX ARSXXX our net expense to year, last quarter financial $XX ARSXX million driven compared lower million income XXXX.

our net debt X.XX ratio of you as X.XX compared level, billion. sheet, We cash tier the ended debt generation cash solid management with see profitability balance the total our at stood structure. can results on top billion deliberating XX, capital times the flow recent to and ARSX.X and XXXX. strong on and times of quarter Consequently, at position capital on focus end our at working ARSX our our into Slide Moving to

we capital dedicated for to expenditure L´Amalí billion, ARSX one-third project. made was expansion which the the quarter, During

Additionally, million. of ARSXXX amount sell financial million ARSXXX a for we debt of can total and repurchase share

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

Sergio Faifman

Thanks, Marcos.

please Now XX. to I up presentation, Slide to ask wrap you the to turn

certainly then Cement [indiscernible] together Although, perspective affect related and we demand seems the plan are a the expect with remainder large and pre-pandemic establishing cool In wave Yet. moderate macroeconomic to growth the restriction progressing. we sense, construction is project be reopening. level years. second to the current of for around guiding to the increase a vaccination context potential with virus an

our and generation this next least, been and start clinker result the but working to cement will the who in with level, commissioned flow capital people on not which very without set come. and fully solid to month structure. in thank us plant, for year These L´Amalí have into our stakeholder the profitability world-class and together expenditure Our to or be in solid next who’ll capital grown on solid result, all of rely will the our management our which producing cash days, a capital focus strong deleveraging like I Last difficult. would

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

Operator

you. Thank

[Operator session. We first Morgan Instructions] comes will Stanley. a Our question Nikolaj from question-and-answer ahead. Lippmann now conduct from Go

Nikolaj Lippmann

will are it you down here. M&A it seen Thanks you do? is on question degenerating can looks if are in the on one, you’ve the go a also I and both cash. plant results to is L´Amalí. know you. but don’t of And and potential my in What generate Thank taking lot the just my hot that lot to What to out a anything opportunities? question for finishing aggregates. you of likely cash congratulations continue question My on

the the cash sheet years? of again, So is congrats. of use you thinking couple over much balance next Thank very around and the your what

Sergio Faifman

under an the some resources do yes, a by to So, So Language] short in to with is the are defined the our exceeding about, deal into strategy using now, Regarding question. Hi, Directors for two Board we the long-term on time the Nikolaj. the working Language] and – committee have been cash, our under strategy to we policy, some on repurchase we’re Language] – cash. acquisitions locally, before, Language] coming your plan, are end abroad. the come, of strengthen more think cash a what as last aggressive [Foreign plan. this of we’re month. the finance dividend analysis, not is that think with to mentioned and this we of to working to [Foreign thinking [Foreign exceeding Thank you end In in banks order for the [Foreign – we or working

Nikolaj Lippmann

Got Thank Yes. very much. it. you

Operator

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

Alberto Valerio

close magic Hi, ask I’d the Hi, additional congrats helpful best it the be U.S. would Gastón, market bit, could results it like extensions? I was was Marcos, think even with hi, price you Sergio, terms the color X.X% is to to these on year-over-year, provide if drop you everyone. games, little and color, a on results, ever. additional I Thanks. and think, very in on margin

Gastón Pinnel

is Sorry, question, the the Alberto, we are expansion? not clear margin if understood we regarding

Alberto Valerio

Exactly, Gustavo, margin, of XX% color [indiscernible] EBITDA you if extension provide just from X.X% first nearly could additional quarter of reduce XXXX?

Sergio Faifman

are question. [Foreign Language] you margin the few in. So, expansion, thank factors Valerio, playing there for your regarding Hi, a

with volume year. this not that as natural higher and performance between first some to gas contracts, ton. solution have that logically this signed our in also [Foreign also impact per [Foreign Additionally higher the April which improve the year year, a last policy, positive we the a only year quarter. last had So, Language] which period. in Language] happened continuous May, also we was last an during March and First, [Foreign remember operation, So, together the lockdown we comes finally but Language] cost pricing

Alberto Valerio

is L´Amalí you’ll Just which that That’s after level plant all up, a running at we be the questions. Thanks. what the capacity which follow operating. my you we at and of can have running capacity, Loma moment,

Sergio Faifman

second in our to remember expansion L´Amalí working enable XX% our are that from line production, the seasonality to of we to total will should the Currently, further costs – you Language] Language] [Foreign the capacity. XX% capacity. our costs. [Foreign us [Foreign represents additional Language] of benefit the And at optimize our optimize Obviously, XX% and is to of

Operator

question from is next [indiscernible]. ahead. Go Our

Unidentified Analyst

you great maturities meaningful your new gas another doing morning. the sort are your year understand, good the with congratulations I supply one as question you’re to Hi, and you if How a this giving have gas Hope straightforward well know on as and quarterly of Biden you these impacting start contracts I suppliers. renovate do margins or environment revolving long contracts. market standing contracts? see if the have regarding, on result. and don’t relationship trying to of the

negotiate You usually versus Thanks. you’re able some market to perhaps prices. discount

Sergio Faifman

to our question, you of Many from – petcoke that we other Thank for And guarantee two is [Foreign we winter situation, for that XX some of were know, Language] we a some Last consequence, actions, took, production, winter. natural natural related supply, renovated Argentina. risk that with import the Language] the gas to the and has the the one, we Nicholas. those our awareness natural there that to [Foreign were So supply other of you problem Language] one been [Foreign the next months. issues our of contracts had we some have they the your them month, [Foreign yet concrete capacity raised supply basins contracts, contracts gas and – mentioned the to issues, to [Foreign rated of as in they the may supply during renew during due mitigated conflicts was As Language] that we to in the Language] some for produce mentioning. our gas, before.

Unidentified Analyst

you. Okay. Thank Very clear.

Operator

session. our more remarks. to would questions. the Nikolaj? call Stanley. to Gastón sorry, question-and-answer Go Morgan Lippmann Pinnel ahead. from back closing I for concludes Oh, Nikolaj This turn I’m there’s like

Nikolaj Lippmann

muted. I’m Sorry. just

for question period I if winter correct? some your to a counter-intuitive; but I that cash just have So don’t expect petcoke this but degree, importing clarifying Your you had. wondering sounds sorry negative got for understand the coming to it It correct? I impact Did back, on a was very just cost.

Sergio Faifman

typically, [Foreign our do you, costs. the and with And yes, winter vessel petcoke. we’re natural one and expect during petcoke by produce Additionally, the Nikolaj. in to Thank gas, going, natural remember a we petcoke Language] just between why of [Foreign gas. overhauling during gas we mix the volatility and do produce of that’s So, we winter, lesser and Language] during of we are our a extent have for importing natural that a Language] without [Foreign So in production we that already we winter. contracts signed not mixture equipment,

Nikolaj Lippmann

it. Got

Thanks So it’s more like clarifying. an policy. insurance for

Operator

like the over to concludes Pinnel conference question-and-answer session. it for our Gastón now I so, And would remarks. back turn to closing

Gastón Pinnel

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

Operator

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

You may now disconnect.

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) 13 May 212021 Q1 Earnings call transcript