Adjusted EBITDA: $40 million, representing a 3.2% decrease in pesos. Net Debt: $174 million, with a net debt to EBITDA ratio of 0.96 times. Revenue: Decreased by 8.9% primarily due to weaker performance in the cement segment. Cement Segment Revenue: Dropped by 10.9% despite an 8.9% increase in volumes. Concrete Segment Revenue: Declined by 1.4% with a 22.8% increase in volumes. Aggregate Segment Revenue: Declined by 14.2% despite a 29% increase in sales volumes. Gross Margin: Expanded by 116 basis points year over year, reaching 26.4%. SG&A Expenses: Decreased by 7.8%, representing 11.7% of sales. Net Profit: ARS21.5 billion, compared to ARS79 billion in the first quarter of 2024. Cash Flow from Operating Activities: ARS1.3 billion, improved from ARS12 million in Q1 2024. Capital Expenditure: ARS11.1 billion, mainly for 25-kilogram bag projects and maintenance.

Warning! GuruFocus has detected 10 Warning Signs with LOMA.

Release Date: May 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Loma Negra Cia Industria Argentina SA (NYSE:LOMA) reported an 11% year-over-year increase in industry recovery for the first quarter of 2025, despite adverse weather conditions. The company achieved an adjusted EBITDA of $40 million, with a margin improvement of 140 basis points compared to the same period last year. Net debt-EBITDA ratio remains comfortable below 1 times, indicating a strong and resilient balance sheet. Cement volumes grew by 28% year over year in April, showing signs of a robust recovery. Cost management efforts led to a decline in costs by 21.9% on a per-ton basis in the cement segment, supporting profitability.

Negative Points

First quarter top-line decreased by 8.9%, primarily due to weaker performance in the cement segment. The aggregate segment experienced a 14.2% revenue decline despite a 29% increase in sales volumes, impacted by challenging market conditions. Railroad revenues saw a decline, with a contraction in adjusted EBITDA margin due to lower revenue per kilometer from grain transport. Net profit attributed to owners of the company declined significantly to ARS21.5 billion from ARS79 billion in the first quarter of 2024. The severe storm in Bahia Blanca disrupted railroad connections, negatively impacting transport and expected to continue affecting the second quarter.

Q & A Highlights

Q: Can you elaborate on the competitive dynamics and market share trends for Loma Negra in 2025? A: (Sergio Damian Faifman, CEO) The market share numbers for the first quarter align with our strategy. We operate within a comfortable range of market share, and variations can occur due to climate impacts and pricing strategies. Temporary market share changes are not a concern for us.

Story Continues

Q: How do you see pricing power and cement volumes evolving in the current competitive scenario? A: (Sergio Damian Faifman, CEO) Pricing for the first quarter is around $115 per ton, which is sustainable. If Argentine costs rise, prices may also increase. We expect cement volumes to grow in double digits in 2025, with improvements seen in April and May.

Q: What is the volume outlook considering projects like RIGI and the impact on cement demand? A: (Sergio Damian Faifman, CEO) Forecasts are positive, but no single project significantly impacts total volumes. We see tenders moving forward, especially in concrete cement, with projects expected to start in the second semester, including eolic energy and public works.

Q: Is there any update on the turbine program for L' Amali? A: (Sergio Damian Faifman, CEO) Currently, there are no updates on the turbine program. We have tested winds in L' Amali and signed renewable energy contracts, improving our cost structure and sustainability strategy.

Q: How is the company managing costs and maintaining profitability amid market challenges? A: (Marcos Isabelino Gradin, CFO) We focus on driving efficiency and controlling costs. Improved energy input costs and effective cost management have helped mitigate the impact of a softer top line, with gross margin expanding by 116 basis points year over year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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