EBITDA Margin: Expanded by over 600 basis points to 29% in Q4 2024, up from 22.8% in Q4 2023. Adjusted EBITDA: $50 million in Q4 2024, with a full-year 2024 EBITDA of $198 million. Net Debt: Reduced by $20 million to $157 million, lowering the net debt ratio to below 1 times. Revenue Decline: Consolidated revenues declined 23.9% to ARS699 billion for fiscal year 2024. Gross Margin: Expanded by 640 basis points year over year to 32.6% in Q4 2024. Net Income: ARS22.4 billion in Q4 2024, compared to a net loss of ARS43 billion in Q4 2023. SG&A Expenses: Fell 3.9%, with SG&A as a percentage of sales at 12% in Q4 2024. Cash Flow from Operating Activities: ARS57 billion in Q4 2024. Capital Expenditure: ARS21.2 billion in Q4 2024, with 40% allocated to the 25-kilogram bags project.

Warning! GuruFocus has detected 9 Warning Signs with LOMA.

Release Date: March 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) achieved a significant expansion of its EBITDA margin by over 600 basis points in the fourth quarter of 2024. The company reported an EBITDA of $50 million for the quarter, with a substantial improvement in the EBITDA margin to 29% from 22.8% in the same quarter of 2023. Net debt declined by an additional $20 million during the quarter, reducing the net debt-to-EBITDA ratio to below 1 times. Loma Negra Cia Industria Argentina SA (NYSE:LOMA) achieved a 3% year-over-year decrease in total greenhouse gas emission intensity, aligning with its 2030 sustainability commitments. The company is poised for growth in 2025, with expectations of double-digit volume increases and a more favorable economic environment.

Negative Points

The construction industry downturn led to a 24% decline in cement volumes for the full year 2024. The fourth quarter saw a 19.5% decline in top-line performance, primarily due to weaker performance in the cement segment. Concrete and aggregates segments experienced margin contractions, with the Concrete segment's adjusted EBITDA margin turning negative. The company faced a challenging year with volumes declining 24%, impacting overall financial performance. Despite improvements, the Railroad segment's adjusted EBITDA margin remained in negative territory.

Q & A Highlights

Q: How is Loma Negra approaching pricing strategies for 2025 given the current demand and inflation trends? A: (Sergio Damian Faifman, CEO) In 2025, we expect pricing dynamics to be similar to recent years, with adjustments aligned with inflation. If inflation decelerates, there will be more space between price increments. We anticipate prices to move with inflation, assuming inflation remains above peso devaluation. In case of significant devaluation, price adjustments would exceed inflation.

Story Continues

Q: What are Loma Negra's expectations for volume growth in 2025, and is there potential for dividend distributions? A: (Sergio Damian Faifman, CEO) We anticipate a double-digit increase in volumes year-over-year for 2025, driven by maintaining late 2024 volumes and potential new private and public projects. Regarding dividends, while we paid dividends in 2022 and 2023, the uncertainty in 2024 led us to hold off. With a clearer volume outlook for 2025, we are evaluating the best capital allocation strategy.

Q: What are the cost structure expectations for 2025, and are there opportunities to improve margins? A: (Sergio Damian Faifman, CEO) We have seen improvements in energy inputs and are focused on efficiency and cost management. The margins achieved in Q4 2024 are sustainable, and with potential volume increases, margins could improve further. Operating at 50% capacity allows us to absorb growth without major CapEx.

Q: Can you provide guidance on CapEx for 2025, considering current capacity utilization? A: (Sergio Damian Faifman, CEO) For 2025, we plan only maintenance CapEx, with the completion of the 25-kilogram bag project by July. We expect maintenance CapEx to be between $55 million and $60 million across all business segments.

Q: What is the remaining CapEx required to complete the 25-kilogram bag project? A: (Sergio Damian Faifman, CEO) The remaining CapEx for the 25-kilogram bag project is approximately $2 million.

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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