LOMA - Earnings call transcript Q2 2022 | Loma Negra Compañía Industrial Argentina Sociedad Anónima

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Operator

Good morning, and welcome to the Loma Negra Second Quarter 2022 Conference Call and Webcast. [Operator Instructions]. Please note that this event is being recorded. I would now like to turn the conference over to Mr. Diego Jalon, Head of IR. ahead. go Diego, Please,

Diego Jalon

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

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

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

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

Sergio Faifman

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

of ended trend quarter another positive solid with and then through and As results, records. Marcos of the demand final we Slide on will remarks, quarter, will open a surpassing will the with discussion After usual, of historical and the the call the with take will begin X. I set highlights financial review to provide some your my presentation our you results. that I questions. market We then Starting supported that, is of cement

million EBITDA the for cement When compared the efficiency above by the and has energy release quarter investment our from recent million the our market complex production sound supported is XX.XX% of with pesos, diminished a in a also year-on-year, XXXX's flexibility solid profitability and this our quarter per $XX shows results EBITDA by measured keep of this context, dollar quarter. increase capacity. in the to second coping $XX we worldwide. reached consolidated XXXX. situation an of second sustained see XX% global delivering EBITDA increased adjusted LOMA extent margin adjusted of with in large of U.S. could you X.X% As ton In that fully with yesterday,

Finally, million the generation, leverage flow we in we dividend our balance $XX that through the a of for following off sheet will distribute of second dividend who paid now to an on cash year, go totalizing April Marcos $XXX dividend review and ahead. will decided million, financial Please, results. solid I Gradin, and lead yield our XX%. you outstanding reaching call market to hand the Marcos, and

Marcos Gradin

Thank you, Sergio. everyone. Good morning,

uncertainty. Central context, for measured you its by X.X% Report see forecast moment economic previous shows this X% reaching the can growth. above level, on slightly are the as as activity Market figures growth the momentum was Slide Bank, economy GDP robustness consolidated sectors construction following XXXX a X, from the last Expectation the political of in the In As quarter from economy X.X% first strong increased the a showing this general in from the and ISAC showed

moderate surpass track which that record remain that continued we continue of to registered us of (inaudible) an the showed XXXX. X%, going cement national almost XX% year initial by a growing especially strong We've coupled makes of on surged the trend back accumulated the increase came of this residential all to from expectations. last resi cement of quarter shipment, reaching a municipal the few and dynamic a Regarding tendency in second and This against level are in Bulk After quarter historical growth. more see We provision a where exceeded first figures the sales, the But level. the in has first industry second the a of year-over-year, annual the July higher quarters, in in volumes the increase XX.X%. this at breakdown of a the driven that quarter year-on-year. activity half growth previous that can works, projects seen public bulk optimistic X% residential on solid and is XX% in XXXX. by XX% shows showing particularly participation recovery the by private, demand dispatchment infrastructure bulk

the taking quarter, future As we affect current could cautiously we for macroeconomic before, optimistic that and challenging political said are negatively into growth. next consideration situation

was bulk roadworks second the segments. XX.X% XXX%. line line up Cement, in to pricing Turning sharply, volume with performance Volumes with strong dynamic. of mainly revenues Concrete top segment revenues with up masonry in quarter. were of the up some expanded Slide cement ongoing performance. to softer performance of pricing our on of segment. in performance in cement. other due coupled lime increase aggregates showed good same revenues the demand with review and pricing recovery the the Buenos the X.X% province expanding a by quarter, was of with X In concrete recovered strongly Top way, all a year-on-year coupled momentum XX.X% XX.X% XX.X%, and following of and Volumes X% positive coupled good a bulk for the Aires

impacted lower by the XX.X%, construction boosted Finally, were was while quarter mix railroad (inaudible) product X.X% average year-on-year. negatively in price Transported reported. and up by revenues increased materials, volumes a

X. compression of production results Slide to to X.X% was improvements Please gross XX as by proper Cement higher profit and of Railroad line, expenses increasing year-on-year by on improved basis better partially L’Amalí XXX quarter and segment our to slightly second the price good margin mainly SG&A of by with X.X% performance core due to due gross our XX.X%, impacted Consolidated management flexibilities. remained aggregates. and completion to in X.X%. a flattish, and offset for by depreciations the operational revenues a cost basis performance lower percentage offset slightly points X. a slightly from to turn Slide contracted of concrete margin Moving points

EBITDA basis, ton, a increasing X% $XX.X On EBITDA XX of showing adjusted this Concrete second Aggregates volumes due boosted line quarter XX ago, an per million the ton from margin 'XX, management. adjusted quarter, a by quarter million million, EBITDA the up 'XX quarter other pricing adjusted the EBITDA top cost stood in EBITDA X.X reached from X.X% quarter segment, points a XX.X%, in $XX favored at very margins. up ARS reaching reaching inputs by in pricing top XXX Our better a for a In year-on-year by performance second basis volume. EBITDA offset consolidated quarter, million ARS with was the billion sales by million increased XX.X% great partially price contracted X.X% higher the and increase our and second negative year for in second $XX XXX same a contraction to a pesos, XX%, other from with points dynamics mainly basis and margin EBITDA the reached XX segment contracted sales of adjusted and margin points, in improved expansion positive of grounds. cement by good and higher to recovery by but basis still ARS line volume. lower adjusted softer in affected and segments the of margin with margin XXX energy higher mainly quarter to explained compared per XXXX. participation Cement ARS

volume ARS of million the a decreased the of transported for Finally, despite due margin impact average distance product to ARS Railroad with XX X.X%, and adjusted million performance affected a EBITDA to lower expansion. by XX mainly quarter the price mix

Moving on to the XX. bottom Slide line on

billion financial X partially this cost rate. which ARS Our in same total X.X stood of quarter billion profit in at quarter the monetary net final last in quarter the position and was the on ARS financial same last gain X.X the X.X of gain income tax where during lower by the stood from ARS billion at compensated ARS expense exchange rate billion of a primarily a loss decrease the an posted increase reverting difference. year, the affected of Total loss year, the

X.X and lower compared rate. in financial for was X.X first to $XX the variations our net effect quarter compared million As million mentioned, quarter cash the by XXXX. to U.S. the to year to same interest income last $XX ARS in billion Measured and the debt increased our net in dollars, quarter position due of our billion expense second

sheet. Moving the balance to on

compared see we Slide total to debt ratio at can ended debt-to-EBITDA with -X.XXx of the position minus of billion. XX, end stood you on net cash a at X.XXx billion XX.X quarter XX.X Consequently, our the XXXX. As at and ARS ARS

generation in impact second coupled higher reflecting billion taxes positive of comparison in year-on-year at the cash operating divestment in Our effects ARS with 'XX. quarter X Paraguay on due to the stood paid the profitability

mostly billion of CapEx X.X termination the reduction the requirements. capital expansion L´Amalí expenditure, Regarding the spent ARS capital we and maintenance after for corresponding of

million the end in quarter. During in XX% the our increased of at strong the we denominated currency, Leverage our $XXX while reaching our standing XX payment rest dividend million, of $XXX April down to U.S. focus following the Breaking is was by value quarter, XX%. sound standing maximizing of July, on it pesos. in dollars million, approximately on by debt million, in dividend sheet shareholders, USD and another a we yield of dividend in balance our at $XX the distributed

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

Sergio Faifman

Thank you, Marcos.

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

market construction shown is activity historic track tendency and a settle general the before, mentioned new a the cement showing we to great dynamic, quarter in in the the in first particular, and on consolidating As record.

as still determinate. it's you we other and it. we to that principles. we In ourselves we scope macroeconomic satisfied hand, with On stand we keep complex like We very state and that are to always political can presented through one this time which improving the The constantly just situation. that commitment to show our a result the are going challenge operational difficult and of context, flexibility and in have and really of are LOMA'S outcome the this efficiency when we by

Looking for to some the situation continue, to face and that could ahead to are and macroeconomic the recent challenges. the is trend cement that tension, due is we optimistic expected be going FX volatility and up LOMA the considering positive

always, we end growth. very This people As remarks. of and prepared like important our to I stakeholders, our is where thank our support would pillars sustainability

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

Operator

Stanley. Morgan Alejandra with question [Operator from our today come Instructions]. will first Obregon And

Alejandra Obregon

My the on for call. the or your protect a and worldwide. perhaps factor either seen clinker And the in the of gaining lot targets on report mean, sustainability results, recently thank your this, reduce cement have that question is to I trends quarters released is we traction profitability. blended some Congratulations of to last and and first you by

blended whether So elaborate even that see and reduce more is today, whether exploring some cement I factor could where you something where gain was your is in clinker wondering, could and are well. to Argentina if it it from you you traction space is as

Sergio Faifman

target regarding on you question. And to And targeting improve report, years. few next another and for believe what clinker years. Within advance we to factor, focusing your Thank is clinker have in are the defining our some for improve. KPI and are our space next factor we the we and that we to few

Alejandra Obregon

Understood. question. That another for if a I And -- demand. space on may clear. have if very I question I was have have a

So you in from a strength private residential. industrial, greater contribution there's mentioned buildings, that continued from

on So what year I of for and verticals expecting overall? was you're -- if color for demand of some you provide half backlog, terms of the in just back terms the in wondering could

Sergio Faifman

is to believe we be we first be the year, sustained. think almost variations between in the months, that observe volumes cement some of With half similar that the represents going bulk of going We saw this are the total what of XX% second market. semester. the to breakdown we XX-XX For

Operator

[Operator Instructions]. come AR Rodrigo question And our next Nistor with from will Partners.

Rodrigo Nistor

Congratulations results. the on

your inflation I Argentina will my likely year is So the regarding exceed pricing for question this XX%. expect strategy.

of planning to you costs? impact were negative So rising reduce the

Sergio Faifman

your you Thank question. for

company -- also we this As price Loma about. say, statements, to that can management. cost is inflation you an strong is to quarter, continue, and we inflation strategy the are going that to internal lower looking see cost is evolution of thermal this in our we are during going costs. Negra. care though see to There's is the forward, very no pressure the a the the for winter of us costs there inflation always financial that face to issue that the see the have impact we is of inflation higher in year. of doubt can cost even some And going of that costs energy And the linked you as But

Operator

[Operator Instructions].

America. will Our with next question Garcia from come Bank Daniel of

Daniel Rojas

seen a -- average from drill second Kirchner you've the gas lot has half. And see outlook from benefit the a Néstor you margins potential and Could you follow-up of the and think Rojas of is on company. you for the on help pipeline. question for down Daniel these the it prices There have My the on how or This actually prices is follow-up company? America. Bank can the you regarding on and an talk -- line projects the previous please natural that in Do gas one, the been a a can question. time

Sergio Faifman

Thank you for Daniel. question,

If you see last the second closed above are contracts gas prices that the year of year above XX%. the are of we to period for compared and natural the some half XX% the same of

now. but should So regarding see we are the it we seeing an seeing energy that last from year below levels increase are we internal

probably. positive we next winter. effects the are the not see And term expect Regarding the we can seeing some to short effects positive in demand, the gas after pipeline, seeing

Daniel Rojas

have you the level of to achieve the on online. savings some pipelines be able Do you'll idea on

Sergio Faifman

it's exports? with think internal And how we -- with especially that available to available is going to price to to be reference -- linked how we for determine the to and for going be be savings is going regarding is gas have the to So the exports is of are that much be consumption many going going the consumption. internal going

Daniel Rojas

if That's may. very follow-up, clear. a And I

be dividend for forward? Going forward, the and in running you what XXXX think do rate going would your

Sergio Faifman

shareholders. going XXXX, have on to didn't written value our Probably dividend maximizing We for a are focusing in continue policy. we

Operator

conclude closing I'd like any will turn session. our to Diego back to question-and-answer Jalon remarks. over conference this for the And

Diego Jalon

that forward you, you, remain in we our for again meeting us day. meet interest Thank We to you, nice today. a And in has meantime, Nicole. now for Thank The have Thank appreciate have. the look you questions participation may available call. next company. your everybody, and any really We our conference concluded. and you in

Operator

attending presentation. for Thank today's you

this time. disconnect now may at your You lines

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) 12 Aug 222022 Q2 Earnings call transcript