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Loma Negra Reports 4Q19 results

Loma Negra, (NYSE: LOMA) (BYMA: LOMA), ("Loma Negra" or the "Company"), the leading cement producer in Argentina, today announced results for the three-month and twelve-month period ended December 31, 2019 (our "4Q19 and FY19 Results").

4Q19 Key Highlights

  • Net revenue decreased 15.0% YoY to Ps.9,074 million (US$147 million)
  • Consolidated Adjusted EBITDA down 13.1% YoY to Ps.2,887 million (US$49 million), as Argentina business was impacted by persistent macro-economic instability amid the political transition
  • Consolidated Adjusted EBITDA margin expanded by 69 basis points YoY from 31.1% to 31.8%
  • Net Debt /LTM Adjusted EBITDA ratio of 0.86x from 0.43x in FY18

FY19 Key Highlights

  • Net revenue down 5.5% YoY to Ps.38,952 million (US$660 million) mainly affected by a lower activity level in Argentina
  • Consolidated Adjusted EBITDA up 2.3% YoY to Ps.11,206 million (US$199 million) and EBITDA margin expanding 221 bps up to 28.8%. If excluding non-Recurrent cost from structure adequacy efforts, FY19 EBITDA would have been around US$209 million, with EBITDA margin of 31.6%

The Company is reporting results of its subsidiaries by applying International Accounting Standards 29 – IAS 29 (Financial Reporting in Hyperinflationary Economies) ("IAS 29"), and certain financial figures1 Table 1b and Table 11 below were prepared in U.S. dollars and Pesos without giving effect to IAS 29.

Commenting on the financial and operating performance for the fourth quarter of 2019, Sergio Faifman, Loma Negra’s Chief Executive Officer, noted: "Since the October presidential elections, the outgoing government had to take some measures to recover the stability of the financial system. These measures ended up deepening the ongoing economic and financial crisis. By the end of the year, the incoming government took steps to achieve an economic recovery, reschedule sovereign debt maturities and regain confidence.

In this context, Argentina´s business suffered more than previously expected, however, thanks to the determination to carry out cost-control initiatives oriented towards streamlining our production footprint, we were able to thrive and present results that we can feel proud of. When excluding the non-recurrent costs relative to this initiatives, Adjusted EBITDA would have reached US$ 209 million with margins expanding 378 basis points to 31.6%.

Besides the global uncertainty observed these days, domestically, a key aspect for 2020 will be the policies adopted by the new administration in order to reestablish financial stability and economic growth.

Our expansion project in L´Amalí continues as schedule to kick in by mid-2020."

1) Table 1b and Table 11—Figures in US dollars result from the calculation of figures expressed in Argentine pesos and the average exchange rate for each reporting period (2019 figures exclude the impact of IAS 29 and 2018 figures are as previously reported)

Table 1: Financial Highlights

(amounts expressed in millions of pesos, unless otherwise noted)

 

Three-months ended
December 31,

 

Twelve-months ended
December 31,

 

2019

2018

% Chg.

 

2019

2018

% Chg.

Net revenue

9,074

10,669

-15.0%

38,952

41,238

-5.5%

Gross Profit

2,725

3,131

-13.0%

10,810

10,498

3.0%

Gross Profit margin

30.0%

29.3%

+68bps

27.8%

25.5%

+230bps

Adjusted EBITDA

2,887

3,321

-13.1%

11,206

10,954

2.3%

Adjusted EBITDA Mg.

31.8%

31.1%

+69bps

28.8%

26.6%

+221bps

Net Profit

1,126

1,946

-42.2%

4,044

3,001

34.8%

Net Profit attributable to owners of the Company

1,050

1,835

-42.8%

3,839

2,769

38.7%

EPS

1.7611

3.0791

-42.8%

6.4413

4.6454

38.7%

Shares outstanding at eop

596

596

0.0%

596

596

0.0%

Net Debt

9,659

4,709

105.1%

9,659

4,709

105.1%

Net Debt /LTM Adjusted EBITDA

0.86x

0.43x

0.43x

0.86x

0.43x

0.43x

Table 1b: Financial Highlights in Ps and in U.S. dollars (2019 figures exclude the impact of IAS 29 and 2018 figures are as previously reported)

In million Ps.

Three-months ended
December 31,

Twelve-months ended
December 31,

 

2019

2018

% Chg.

 

2019

2018

% Chg.

Net revenue

8,713

6,741

29.3%

31,828

22,163

43.6%

Adjusted EBITDA

2,907

2,149

35.3%

9,599

6,167

55.6%

Adjusted EBITDA Mg.

33.4%

31.9%

+149bps

30.2%

27.8%

+233bps

Net Profit

972

1,325

-26.6%

2,378

2,170

9.6%

Net Debt

9,659

4,573

111.2%

9,659

4,573

111.2%

Net Debt /LTM Adjusted EBITDA

0.86x

0.43x

0.43x

0.86x

0.43x

0.43x

 

In million US$

Three-months ended
December 31,

Twelve-months ended
December 31,

 

2019

2018

%Chg.

 

2019

2018

%Chg.

Ps./US$, av

59.34

37.14

59.8%

48.24

28.09

71.7%

Ps./US$, eop

59.90

37.81

58.4%

59.90

37.81

58.4%

Net revenue

147

182

-19.1%

660

789

-16.4%

Adjusted EBITDA

49

58

-15.3%

199

220

-9.4%

Adjusted EBITDA Mg.

33.4%

31.9%

+149bps

30.2%

27.8%

+233bps

Net Profit

16

36

-54.1%

49

77

-36.2%

Net Debt

161

121

33.3%

161

121

33.3%

Net Debt /LTM Adjusted EBITDA

0.86x

0.43x

0.43x

0.86x

0.43x

0.43x

Overview of Operations

Sales Volumes

Table 2: Sales Volumes2

 

 

Three-months ended
December 31,

 

Twelve-months ended
December 31,

 

 

2019

2018

% Chg.

 

2019

2018

% Chg.

Cement, masonry & lime

Argentina

MM Tn

1.28

1.44

-11.1%

5.47

6.12

-10.6%

Paraguay

MM Tn

0.14

0.15

-3.8%

0.57

0.57

0.4%

Cement, masonry & lime total

1.42

1.58

-10.4%

 

6.04

6.68

-9.7%

Argentina:

Concrete

MM m3

0.13

0.27

-51.5%

0.80

1.07

-25.1%

Railroad

MM Tn

1.12

1.21

-7.5%

4.47

4.75

-5.8%

Aggregates

MM Tn

0.25

0.30

-18.6%

 

1.09

1.09

0.0%

2 Sales volumes include inter-segment sales

Sales volumes of cement, masonry and lime in Argentina during 4Q19 declined by 11.1% YoY to 1.28 million tons, as demand was affected by economic contraction and the political transition. In contrast with previous quarters, but similarly to 3Q19, the bag segment experienced a softer decline than the bulk segment.

In Paraguay, sales volumes decreased by 3.8% YoY in the fourth quarter to 0.14 million tons, impacted by adverse weather conditions. As a result, consolidated total sales volumes of cement, masonry and lime for the quarter decreased 10.4% YoY to 1.42 million tons.

Sales volumes in the Concrete segment in Argentina were down 51.5% YoY to 0.13 million m3, as the major infrastructure public works and private projects were put on hold.

Aggregate volumes in 4Q19 decreased by 18.6% YoY to 0.25 million tons. In this line, the railway segment decreased 7.5% compared to the same quarter in 2018, affected mostly by a lower transported volume of building materials, and partially offset by a stronger volume of other transported goods.

For FY19, Loma Negra reported a 9.7% YoY decline in total Cement, masonry and lime sales volumes mainly reflecting overall weak market demand in Argentina, while in Paraguay volumes remained relatively flat. Concrete volumes experienced a 25% YoY decrease compared to the record high level of 2018, reaching 0.8 MMm3, and aggregates ended the year virtually without changes compared to FY 2018. Railroad segment volumes fell 5.8% in 2019 principally reflecting the drop in building materials transportation.

Review of Financial Results

Table 3: Consolidated Statement of Financial Position

(amounts expressed in millions of pesos, unless otherwise noted)

 

Three-months ended
December 31,

 

Twelve-months ended
December 31,

 

2019

2018

% Chg.

 

2019

2018

% Chg.

Net revenue

9,074

10,669

-15.0%

38,952

41,238

-5.5%

Cost of sales

(6,349)

(7,538)

-15.8%

(28,142)

(30,740)

-8.5%

Gross Profit

2,725

3,131

-13.0%

10,810

10,498

3.0%

Selling and administrative expenses

(756)

(734)

3.1%

(2,904)

(2,975)

-2.4%

Other gains and losses

31

140

-77.6%

37

168

-78.0%

Tax on debits and credits to bank accounts

(100)

(86)

15.6%

(404)

(391)

3.3%

Finance costs, net

Exchange rate differences

353

488

-27.6%

(1,190)

(1,910)

-37.7%

Financial income

-

146

n/a

60

128

-52.9%

Financial expenses

(647)

(348)

85.8%

(1,793)

(1,104)

62.4%

Gain on net monetary position

89

64

38.0%

1,115

329

239.1%

Profit before taxes

1,696

2,802

-39.5%

5,730

4,742

20.8%

Income tax expense

Current

(360)

(801)

-55.1%

(1,103)

(1,614)

-31.7%

Deferred

(210)

(55)

285.1%

(583)

(127)

359.2%

Net profit

1,126

1,946

-42.2%

4,044

3,001

34.8%

Net majority income

1,050

1,835

-42.8%

3,839

2,769

38.7%

Net Revenues

Net revenue decreased 15.0% to Ps. 9,074 million in 4Q19, from Ps. 10,669 million in the comparable quarter last year, mostly due to the impact of lower revenues in the Concrete and Cement, Masonry, and Lime segments in Argentina.

Revenues in Cement, masonry and lime in Argentina were down 9.1% YoY, mainly as a result of the volume drop, partially offset by positive pricing. Cement revenues in Paraguay decreased by 4.3% YoY, mostly because of lower sales volume.

As a consequence of the suspension or postponement of large public and private projects, Concrete and Aggregates segments presented a sharp decline in sales volumes couple with softer prices, which resulted in revenues dropping 55.5% and 35.1% YoY, respectively. Railroad revenues decreased 15.5% YoY, as price decreased in real term and sales volume declined 7.5%, impacted by lower construction activity and partially offset by other transported products.

For FY19, net revenues decreased 5.5% to Ps.38,952 million from Ps. 41,238 in the FY18, mainly due to revenues decline in the Concrete and Cement, masonry Cement, and lime segments in Argentina.

Cost of sales, and Gross profit

Cost of sales declined 15.8% YoY reaching Ps. 6,349 million in 4Q19 mainly reflecting a lower volume of sales, better energy cost, and the production-footprint adequacy efforts achieved in the previous quarters.

Gross profit decreased 13.0% YoY to Ps. 2,725 million in 4Q19 from Ps. 3,131 million in 4Q18, with gross profit margin expanding 68 basis points YoY to 30.0%.

During FY19, gross profit increased 3.0% to Ps.10,810 million with gross profit margin expanding 230 basis points to 27.8%.

Selling and Administrative Expenses

Selling and administrative expenses (SG&A) in 4Q19 increased 3.1% YoY to Ps. 756 million, from Ps. 734 million in 4Q18. As a percentage of revenues, SG&A increased 146 basis points to 8.3% in 4Q19, from 6.9% in 4Q18, mainly due to the lower revenues level.

During FY19, SG&A fell 2.4% in absolute values from the previous year levels, and as a percentage of sales stood at 7.5%.

Adjusted EBITDA & Margin

Table 4: Adjusted EBITDA Reconciliation & Margin

(amounts expressed in millions of pesos, unless otherwise noted)

 

Three-months ended
December 31,

 

Twelve-months ended
December 31,

 

2019

2018

% Chg.

 

2019

2018

% Chg.

Adjusted EBITDA reconciliation:

Net profit

1,126

1,946

-42.2%

4,044

3,001

34.8%

(+) Depreciation and amortization

887

783

13.3%

3,264

3,263

0.0%

(+) Tax on debits and credits to bank accounts

100

86

15.6%

404

391

3.3%

(+) Income tax expense

570

856

-33.4%

1,686

1,741

-3.2%

(+) Financial interest, net

496

152

227.1%

1,444

781

84.8%

(+) Exchange rate differences, net

(353)

(488)

-27.6%

1,190

1,910

-37.7%

(+) Other financial expenses, net

151

50

201.2%

289

195

48.3%

(+) Gain on net monetary position

(89)

(64)

38.0%

(1,115)

(329)

239.1%

Adjusted EBITDA

2,887

3,321

-13.1%

11,206

10,954

2.3%

Adjusted EBITDA Margin

31.8%

31.1%

+69bps

28.8%

26.6%

+221bps

Adjusted EBITDA decreased 13.1% YoY in the fourth quarter of 2019 to Ps. 2,887 million, with Adjusted EBITDA margin expanding 69 basis points to 31.8% compared to 31.1% in 4Q18.

Excluding the application of IAS 29, as shown on Tables 1b, Adjusted EBITDA increased 35.3% YoY in the fourth quarter of 2019, reaching Ps. 2,907 million, mainly driven by the Cement segments in Argentina and Paraguay, with Adjusted EBITDA margin expanding 149 basis points to 33.4% compared to 31.9% in 4Q18.

Table 11, presenting financial Data by Segment (Excluding IAS 29), shows that Adjusted EBITDA for the Cement, masonry cement and lime segment in Argentina increased during the fourth quarter 43.6% YoY and the margin expanded by 135 basis points to 36.0%. The Cement segment in Paraguay, reported a 53.8% YoY increase in Adjusted EBITDA while Adjusted EBITDA margin was 42.6%, expanding 228 basis points compared to the same period one year ago.

In addition, the Concrete segment reported a decrease in Adjusted EBITDA reversing to a negative Ps. 27.3 million, with the margin contracting from 5.8% to negative 3.6%, mainly as a result of a sharp reduction in sales coupled with a softer pricing. Moreover, Railroad segment declined 7.9% in the fourth quarter of 2019, and the Adjusted EBITDA margin contracted to 12.3% from 17.1% in the comparable period in 2018, mainly as a result of a drop in building materials transportation. Aggregates Adjusted EBITDA margin for the 4Q19 stood at 4.4% mostly explained by a reduction in demand.

During FY19, Adjusted EBITDA increased 2.3% reaching Ps.11,206 million from Ps.10,954 million in FY18, with an Adjusted EBITDA margin expansion of 221 basis points, from 26.6% in 2018 to 28.8% in 2019.

Finance Costs-Net

Table 5: Finance Costs, net

(amounts expressed in millions of pesos, unless otherwise noted)

 

 

Three-months ended
December 31,

 

Twelve-months ended
December 31,

 

 

2019

2018

% Chg.

 

2019

2018

% Chg.

Exchange rate differences

353

488

-27.6%

 

(1,190)

(1,910)

-37.7%

Financial income

-

146

n/a

 

60

128

-52.9%

Financial expenses

(647)

(348)

85.8%

 

(1,793)

(1,104)

62.4%

Gain on net monetary position

 

89

64

38.0%

 

1,115

329

239.1%

Total Finance Costs, Net

(205)

351

n/a

 

(1,809)

(2,558)

-29.3%

During 4Q19, the company reported a loss of Ps. 205 million in total finance costs-net compared to a gain of Ps. 351 million in the previous year fourth quarter, mainly due to higher Financial expenses as a result of higher interest rates and debt position.

During FY19, total finance costs, net decreased Ps.749 million to Ps. 1,809 million from Ps.2,558 million in FY18, mainly as a result of a lower foreign exchange loss, a higher gain on net monetary position, and partially compensated by a higher Financial expenses due to higher interest rates and debt position.

Net Profit and Net Profit Attributable to Owners of the Company

Net Profit for 4Q19, decreased to Ps. 1,126 million from a gain of Ps.1,946 million in the corresponding quarter of the previous year.

Net Profit Attributable to Owners of the Company declined to Ps. 1,050 million in 4Q19 from Ps. 1,835 million in 4Q18. During the last quarter, the Company reported earnings per common share of Ps. 1.7611 and earnings per ADR of Ps. 8.8054 compared with a earnings per common share of Ps. 3.0791 and earnings per ADR of Ps. 15.3954 in 4Q18.

During FY19, Net Profit attributable to owners of the Company increased 38.7% YoY, to Ps.3,839 million, from Ps.2,769 million in FY18.

Capitalization

Table 6: Capitalization and Debt Ratio

(amounts expressed in millions of pesos, unless otherwise noted)

As of December 31,

2019

2018

 

Total Debt

12,226

9,173

-Short - Term Debt

5,537

5,162

-Long - Term Debt

6,689

4,011

Cash and Cash Equivalents

2,567

4,464

Total Net Debt

9,659

4,709

Shareholders' Equity

29,328

25,464

Capitalization

41,553

34,637

LTM Adjusted EBITDA

11,206

10,954

Net Debt/LTM Adjusted EBITDA

0.86x

0.43x

As of December 31, 2019, total cash and cash equivalents were Ps. 2,567 million compared with Ps. 4,464 million as of the December 31, 2018 mainly due to increased capex investments. Total debt at the close of the quarter stood at Ps. 12,226 million, composed by Ps.5,537 million in short-term borrowings, including the current portion of long-term borrowings (or 45% of total borrowings), and Ps.6,689 million in long-term borrowings (or 55% of total borrowings).

As of December 31, 2019, 43% (or Ps.5,274 million) Loma Negra’s total debt was denominated in U.S. dollars, 26% (or Ps. 3,196 million) in Argentine pesos, 25% (or Ps.3,016 million) in Guaraníes, and 6% (or Ps.740 million) in Euros. The average duration of Loma Negra’s total debt was 1.5 years.

As of December 31, 2019, Ps.7,771 million, or 64%, of the Company’s total consolidated borrowings bore interest at floating rates, including Ps.4,575 million of foreign currency-denominated borrowings that bore interest at rates based on Libor, and Ps.3,196 million of borrowings with other floating interest rate.

The Net Debt to Adjusted EBITDA (LTM) ratio increased to 0.86x as of December 31, 2019 from 0.43x as of December 31, 2018 reflecting the use of funds in investing activities.

Cash Flows

Table 7: Condensed Interim Consolidated Statement of Cash Flows for the Twelve-months and Three-months ended December 31, 2019 and 2018

(amounts expressed in millions of pesos, unless otherwise noted)

 

 

Three-months ended
December 31,

Twelve-months ended
December 31,

 

 

2019

2018

2019

2018

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net profit for the period

 

1,126

1,946

4,044

3,001

Adjustments to reconcile net profit to net cash provided by operating activities

 

698

(376)

5,836

5,988

Changes in operating assets and liabilities

 

675

1,799

(1,338)

(2,560)

Net cash generated by operating activities

 

2,498

3,369

8,542

6,428

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

Property, plant and equipment, Intangible Assets, net

 

(2,388)

(2,958)

(11,805)

(6,427)

Others

 

21

(24)

(30)

(71)

 

Net cash used in investing activities

 

(2,367)

(2,982)

(11,835)

(6,498)

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

Proceeds / Repayments from borrowings, Interest paid

 

783

(1,567)

1,415

(3,677)

Net cash generated by / used in financing activities

 

783

(1,567)

1,415

(3,677)

 

Net increase / decrease in cash and cash equivalents

 

914

(1,179)

(1,878)

(3,747)

Cash and cash equivalents at the beginning of the year

 

1,512

4,735

4,464

7,222

Effect of the re-expression in homogeneous cash currency ("Inflation-Adjusted")

(40)

(40)

(162)

(151)

Effects of the exchange rate differences on cash and cash equivalents in foreign currency

 

181

948

143

1,139

 

Cash and cash equivalents at the end of the period

 

2,567

4,464

2,567

4,464

In the 4Q19, cash flow generated by operating activities was Ps.2,498 million compared to Ps.3,369 million in 4Q18, explained mainly by a lower profitability during the period and higher working capital needs. During 4Q19, the Company made capital expenditures for a total of Ps.2,367 million, mostly allocated to the expansion of production capacity of L’Amalí plant.

During FY19, the Company made capital expenditures for a total of Ps.11,835 million, of which 73% was allocated to the expansion of production capacity of L’Amalí plant. In the FY19, cash flow generated by operating activities was Ps.8,542 million compared to Ps.6,428 million in FY18 explained mainly by a higher profitability level.

Expansion of L’Amalí Plant.

Loma Negra is moving ahead with the capital expenditure at its L’Amalí plant, which will add 2.7 million tons annually and drive higher profitability. This expansion involves a total capital expenditure, originally estimated at approximately US$350 million. Start-up date is projected for mid-2020.

The Company continued with the overall project execution during the quarter. All imported material of the main equipment were received at site. In addition, civil works for main foundations, silos and buildings structures are completed, and the supply of local steel structures is almost fully completed. Regarding the electromechanical construction, the crusher was tested, the kiln system erection was completed, and the raw and cement mill erection presents good progress. Additions to Property, Plant and Equipment related to this project during 4Q19 amounted to approximately Ps.1,554 million.

Recent Events

On March 10, 2020 Loma Negra Calls for a General Annual Ordinary and Extraordinary Shareholders’ Meeting. Loma Negra announced that its General Annual Ordinary and Extraordinary Shareholders Meeting will be held on April 16, 2020 at 10:00 am Buenos Aires time on first call, and on the same day at 12:00 pm Buenos Aires time on second call. The meeting will be held at the auditorium located on the fourth floor of Boulevard Cecilia Grierson 355, Autonomous City of Buenos Aires. Among the key items of the agenda, the Company’s Board has submitted for consideration (i) its recommendation to fully re-invest Loma Negra’s 2019 earnings; and (ii) the approval a global program for the issuance of Negotiable Bonds in accordance with the provisions of the Negotiable Bonds Law No. 23,576 for a maximum amount in circulation of up to US$ 150,000,000 (United States dollars one hundred fifty million) or its equivalent in other currencies.

4Q19 Earnings Conference Call
When:
10:00 a.m. U.S. ET (11:00 p.m. BAT), March 11, 2020
Dial-in: 0800-444-2930 (Argentina), 1-833-255-2824 (U.S.), 1-866-605-3852 (Canada), 1-412-902-6701 (International)
Password: Loma Negra Earnings Call
Webcast: https://services.choruscall.com/links/loma200311k3M1Mydg.html
Replay: A telephone replay of the conference call will be available between March 10, 2020 at 1:00 pm U.S. E.T. and ending on March 18, 2020. The replay can be accessed by dialing 1-877-344-7529 (U.S. toll free), or 1-412-317-0088 (International). The passcode for the replay is 10139831.

Definitions

Adjusted EBITDA is calculated as net profit plus financial interest, net plus income tax expense plus depreciation and amortization plus exchange rate differences plus other financial expenses, net plus tax on debits and credits to bank accounts. Loma Negra believes that excluding tax on debits and credits to bank accounts from its calculation of Adjusted EBITDA is a better measure of operating performance when compared to other international players.

Net Debt is calculated as borrowings less cash and cash equivalents.

About Loma Negra

Founded in 1926, Loma Negra is the leading cement company in Argentina, producing and distributing cement, masonry cement, aggregates, concrete and lime, products primarily used in private and public construction. Loma Negra is a vertically-integrated cement and concrete company, with nationwide operations, supported by vast limestone reserves, strategically located plants, top-of-mind brands and established distribution channels. The Company also owns a 51% equity stake in an integrated cement production plant in Paraguay, which is one of two leading cement producers in that country. Loma Negra is listed both on BYMA and on NYSE in the U.S., where it trades under the symbol "LOMA". One ADS represents five (5) common shares. For more information, visit www.lomanegra.com.

Note

The Company presented some figures converted from Pesos to U.S. dollars for comparison purposes. The exchange rate used to convert Pesos to U.S. dollars was the reference exchange rate (Communication "A" 3500) reported by the Central Bank for U.S. dollars. The information presented in U.S. dollars is for the convenience of the reader only. Certain figures included in this report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be arithmetic aggregations of the figures presented in previous quarters.

Rounding: We have made rounding adjustments to reach some of the figures included in this annual report. As a result, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

Disclaimer

This release contains forward-looking statements within the meaning of federal securities law that are subject to risks and uncertainties. These statements are only predictions based upon our current expectations and projections about possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "expect," "predict," "potential," "seek," "forecast," or the negative of these terms or other similar expressions. The forward-looking statements are based on the information currently available to us. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including, among others things: changes in general economic, political, governmental and business conditions globally and in Argentina, changes in inflation rates, fluctuations in the exchange rate of the peso, the level of construction generally, changes in cement demand and prices, changes in raw material and energy prices, changes in business strategy and various other factors. You should not rely upon forward-looking statements as predictions of future events. Although we believe in good faith that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Any or all of Loma Negra’s forward-looking statements in this release may turn out to be wrong. You should consider these forward-looking statements in light of other factors discussed under the heading "Risk Factors" in the prospectus filed with the Securities and Exchange Commission on October 31, 2017 in connection with Loma Negra’s initial public offering. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in our expectations.

Table 8: Condensed Interim Consolidated Statements of Financial Position as of December 31, 2019 and 2018

(amounts expressed in millions of pesos, unless otherwise noted)

 

 

 

As of December 31,

 

 

 

2019

2018

ASSETS

 

 

Non-current assets

 

 

Property, plant and equipment

 

45,021

33,655

Intangible assets

 

128

336

Investments

 

3

3

Goodwill

 

26

26

Inventories

 

1,569

1,042

Other receivables

 

568

1,449

Right to use assets

 

409

-

Trade accounts receivable

 

2

6

Total non-current assets

 

 

47,725

36,517

Current assets

 

 

Inventories

 

5,414

5,811

Other receivables

 

619

590

Trade accounts receivable

 

2,752

3,176

Investments

 

1,020

3,223

Cash and banks

1,548

1,241

Total current assets

 

 

11,343

14,041

TOTAL ASSETS

59,078

50,558

SHAREHOLDERS' EQUITY

 

 

Capital stock and other capital related accounts

 

11,054

11,054

Reserves

 

11,873

3,508

Retained earnings

 

3,839

8,366

Accumulated other comprehensive income

 

330

422

Equity attributable to the owners of the Company

 

27,097

23,350

Non-controlling interests

2,231

2,115

TOTAL SHAREHOLDERS' EQUITY

 

 

29,328

25,464

LIABILITIES

 

 

Non-current liabilities

 

Borrowings

 

6,689

4,011

Accounts payables

 

139

596

Provisions

 

566

450

Other liabilities

 

51

12

Debts for leases

340

-

Deferred tax liabilities

5,483

4,901

Total non-current liabilities

 

 

13,269

9,970

Current liabilities

Borrowings

 

5,537

5,162

Accounts payable

 

9,064

7,466

Advances from customers

 

193

259

Salaries and social security payables

 

959

975

Tax liabilities

 

543

1,199

Debts for leases

103

-

Other liabilities

83

63

Total current liabilities

 

 

16,481

15,124

TOTAL LIABILITIES

 

 

29,750

25,094

TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES

 

 

59,078

50,558

Table 9: Consolidated Statements of Profit or Loss and Other Comprehensive Income (unaudited)

(amounts expressed in millions of pesos, unless otherwise noted)

 

 

 

Three-months ended
December 31,

 

Twelve-months ended
December 31,

 

2019

2018

% Change

 

2019

2018

% Change

Net revenue

9,074

10,669

-15.0%

38,952

41,238

-5.5%

Cost of sales

(6,349)

(7,538)

-15.8%

(28,142)

(30,740)

-8.5%

Gross profit

2,725

3,131

-13.0%

10,810

10,498

3.0%

Selling and administrative expenses

(756)

(734)

3.1%

(2,904)

(2,975)

-2.4%

Other gains and losses

31

140

-77.6%

37

168

-78.0%

Tax on debits and credits to bank accounts

(100)

(86)

15.6%

(404)

(391)

3.3%

Finance costs, net

Exchange rate differences

353

488

-27.6%

(1,190)

(1,910)

-37.7%

Financial income

-

146

n/a

60

128

-52.9%

Financial expenses

(647)

(348)

85.8%

(1,793)

(1,104)

62.4%

Gain on net monetary position

89

64

38.0%

1,115

329

239.1%

Profit before taxes

1,696

2,802

-39.5%

5,730

4,742

20.8%

Income tax expense

Current

(360)

(801)

-55.1%

(1,103)

(1,614)

-31.7%

Deferred

(210)

(55)

283.1%

(583)

(127)

359.2%

Net profit

1,126

1,946

-42.2%

4,044

3,001

34.8%

 

Other Comprehensive Income

Items to be reclassified through profit and loss:

Exchange differences on translating foreign operations

(376)

(871)

-56.8%

(180)

726

n/a

Total other comprehensive (loss) income

(376)

(871)

-56.8%

(180)

726

n/a

TOTAL COMPREHENSIVE INCOME

749

1,075

-30.3%

3,863

3,726

3.7%

Net Profit for the period attributable to:

Owners of the Company

1,050

1,835

-42.8%

3,839

2,769

38.7%

Non-controlling interests

76

111

-31.7%

205

232

-11.7%

NET PROFIT FOR THE PERIOD

1,126

1,946

-42.2%

4,044

3,001

34.8%

Total comprehensive income (loss) attributable to:

Owners of the Company

858

1,391

-38.3%

3,747

3,139

19.4%

Non-controlling interests

(108)

(316)

-65.7%

116

587

-80.2%

TOTAL COMPREHENSIVE INCOME

749

1,075

-30.3%

3,863

3,726

3.7%

Earnings per share (basic and diluted):

1.7611

3.0791

-42.8%

6.4413

4.6454

38.7%

Table 10: Consolidated Statement of Cash Flows for the Twelve-months and Three-months ended December 31, 2019 and 2018

(amounts expressed in millions of pesos, unless otherwise noted)

 

 

 

 

 

Three-months ended
December 31,

Twelve-months ended
December 31,

 

 

2019

2018

2019

2018

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net profit for the period

 

1,126

1,946

4,044

3,001

Adjustments to reconcile net profit to net cash provided by operating activities

 

Income tax expense

 

570

856

1,686

1,741

Depreciation and amortization

 

887

783

3,264

3,263

Provisions

 

(42)

7

50

109

Interest expense

 

210

263

1,126

640

Exchange rate differences

 

(943)

(2,261)

(305)

269

Others

8

2

19

(9)

Gain on disposal of Property, plant and equipment

7

(26)

(3)

(26)

Changes in operating assets and liabilities

 

Inventories

 

228

3

52

(602)

Other receivables

 

617

454

473

47

Trade accounts receivable

 

50

49

(694)

(1,090)

Advances from customers

 

8

(33)

(26)

(154)

Accounts payable

 

145

1,511

981

1,027

Salaries and social security payables

 

188

140

359

103

Provisions

 

(47)

(35)

(109)

(170)

Tax liabilities

 

(9)

(357)

244

(55)

Other liabilities

 

2

368

263

333

Income tax paid

 

(418)

(236)

(1,767)

(1,670)

Gain on net monetary position

(89)

(64)

(1,115)

(329)

Net cash generated / used in by operating activities

 

2,498

3,369

8,542

6,428

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

Proceeds from disposal of Property, plant and equipment

 

30

1

65

8

Payments to acquire Property, plant and equipment

 

(2,392)

(1,794)

(11,813)

(5,256)

Payments to acquire Intangible Assets

 

(26)

(21)

(57)

(35)

Advances payments to acquire Property, plant and equipment

 

-

(1,143)

-

(1,143)

Contributions to Trust

21

(24)

(30)

(71)

Net cash used in investing activities

 

(2,367)

(2,982)

(11,835)

(6,498)

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

Proceeds from borrowings

 

2,883

293

9,496

2,229

Interest paid

 

(555)

(317)

(2,249)

(1,422)

Repayment of borrowings

 

(1,516)

(1,543)

(5,731)

(4,484)

Debts for leases

(29)

-

(102)

-

Net cash generated / used in by financing activities

 

783

(1,567)

1,415

(3,677)

Net decrease in cash and cash equivalents

 

914

(1,179)

(1,878)

(3,747)

Cash and cash equivalents at the beginning of the period

 

1,512

4,735

4,464

7,222

Effect of the re-expression in homogeneous cash currency ("Inflation-Adjusted")

(40)

(40)

(162)

(151)

Effects of the exchange rate differences on cash and cash equivalents in foreign currency

 

181

948

143

1,139

 

Cash and cash equivalents at the end of the period

 

2,567

4,464

2,567

4,464

 

Table 11: Financial Data by Segment (2019 figures exclude the impact of IAS 29 and 2018 figures are as previously reported)

(amounts expressed in millions of pesos, unless otherwise noted)

 

Three-months ended
December 31,

 

Twelve-months ended
December 31,

 

2019

%

2018

%

 

2019

%

2018

%

Net revenue

8,713

100.0%

6,741

100.0%

31,828

100.0%

22,163

100.0%

Cement, masonry cement and lime—Argentina

6,744

77.4%

4,879

72.4%

24,007

75.4%

16,283

73.5%

Cement—Paraguay

956

11.0%

657

9.7%

3,190

10.0%

1,960

8.8%

Concrete

767

8.8%

1,133

16.8%

3,954

12.4%

3,657

16.5%

Railroad

834

9.6%

650

9.6%

2,982

9.4%

2,136

9.6%

Aggregates

119

1.4%

121

1.8%

498

1.6%

334

1.5%

Others

47

0.5%

34

0.5%

157

0.5%

118

0.5%

Eliminations

(754)

-8.7%

(732)

-10.9%

(2,960)

-9.3%

(2,325)

-10.5%

Cost of sales

5,584

100.0%

4,499

100.0%

21,470

100.0%

15,436

100.0%

Cement, masonry cement and lime—Argentina

4,001

71.6%

3,045

67.7%

15,250

71.0%

10,619

68.8%

Cement—Paraguay

653

11.7%

457

10.1%

2,180

10.2%

1,379

8.9%

Concrete

782

14.0%

1,046

23.2%

3,761

17.5%

3,422

22.2%

Railroad

741

13.3%

536

11.9%

2,610

12.2%

1,913

12.4%

Aggregates

130

2.3%

129

2.9%

526

2.4%

360

2.3%

Others

31

0.6%

20

0.4%

103

0.5%

67

0.4%

Eliminations

(754)

-13.5%

(732)

-16.3%

(2,960)

-13.8%

(2,325)

-15.1%

Selling, admin. expenses and other gains & losses

606

100.0%

365

100.0%

2,219

100.0%

1,452

100.0%

Cement, masonry cement and lime—Argentina

501

82.6%

264

72.4%

1,771

79.8%

1,085

74.7%

Cement—Paraguay

26

4.3%

25

6.9%

96

4.3%

64

4.4%

Concrete

29

4.8%

31

8.4%

120

5.4%

118

8.1%

Railroad

42

7.0%

42

11.5%

182

8.2%

150

10.3%

Aggregates

(11)

-1.8%

(8)

-2.3%

(8)

-0.3%

(4)

-0.3%

Others

19

3.1%

11

3.1%

59

2.7%

40

2.7%

Depreciation and amortization

385

100.0%

272

100.0%

1,460

100.0%

892

100.0%

Cement, masonry cement and lime—Argentina

184

47.6%

118

43.5%

722

49.4%

416

46.6%

Cement—Paraguay

130

33.9%

90

32.9%

474

32.4%

280

31.4%

Concrete

17

4.4%

9

3.3%

62

4.2%

32

3.6%

Railroad

52

13.4%

40

14.5%

183

12.6%

137

15.4%

Aggregates

5

1.3%

15

5.4%

19

1.3%

24

2.7%

Others

(2)

-0.6%

1

0.3%

0

0.0%

3

0.3%

Adjusted EBITDA

2,907

100.0%

2,149

100.0%

9,599

100.0%

6,167

100.0%

Cement, masonry cement and lime—Argentina

2,425

83.4%

1,689

78.6%

7,708

80.3%

4,994

81.0%

Cement—Paraguay

407

14.0%

265

12.3%

1,388

14.5%

796

12.9%

Concrete

(27)

-0.9%

66

3.1%

135

1.4%

150

2.4%

Railroad

103

3.5%

111

5.2%

373

3.9%

210

3.4%

Aggregates

5

0.2%

15

0.7%

(1)

0.0%

2

0.0%

Others

(5)

-0.2%

3

0.2%

(4)

0.0%

14

0.2%

Reconciling items:

Effect by translation in homogeneous cash currency ("Inflation-Adjusted")

(20)

1,172

1,608

4,787

Depreciation and amortization

(887)

(783)

(3,264)

(3,263)

Tax on debits and credits banks accounts

(100)

(86)

(404)

(391)

Finance costs, net

(205)

351

(1,809)

(2,558)

Income tax

(570)

(856)

(1,686)

(1,741)

NET PROFIT FOR THE PERIOD

1,126

1,946

4,044

3,001

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200310005892/en/

Contacts

IR Contacts
Marcos I. Gradin, Chief Financial Officer and Investor Relations
Gastón Pinnel, Investor Relations Manager
+54-11-4319-3050
investorrelations@lomanegra.com