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Loma Negra Reports 4Q20 results

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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, 2020 (our "4Q20 and FY20 Results").

4Q20 Key Highlights

  • Net revenue increased by 20.6% YoY to Ps. 13,263 million (US$160 million), driven by our core cement segment

  • Strong increase in our Consolidated Adjusted EBITDA of 40.8% YoY to Ps. 4,725 million (US$58 million)

  • Consolidated Adjusted EBITDA margin expanded by 513 basis points YoY from 30.5% to 35.6%, explained by higher sales of cement, masonry, and lime together with strong control over costs

  • Dividend payment of Ps. 2,664 million related to the extraordinary income from the sale of our stake in Yguazú Cementos S.A. in Paraguay

  • Net profit from continuing operations was Ps. 2,958 million representing a 136.1% YoY increase

  • Net Debt /LTM Adjusted EBITDA ratio of 0.16x from 0.12x in 3Q20 and 0.83x in FY19

FY20 Key Highlights

  • Net revenue down 12.8% YoY to Ps. 41,623 million (US$514 million) mainly affected by a lower activity level

  • Consolidated Adjusted EBITDA up 2.5% YoY to Ps. 13,277 million (US$171 million) and EBITDA margin expanding 476 bps up to 31.9%

  • During 2020, the sale of our operation in Paraguay represented an income from discontinued operations of Ps. 5,129 million

  • Net profit from continuing operations was Ps. 6,254 million representing a 39.4% YoY increase

The Company has presented certain financial figures, Table 1b and Table 11, in U.S. dollars and Pesos without giving effect to IAS 29. The Company has prepared all other financial information herein by applying IAS 29.

Commenting on the financial and operating performance for the fourth quarter of 2020, Sergio Faifman, Loma Negra’s Chief Executive Officer, noted: "We finished the year in a very good way, when considering the unprecedented scenario that was presented since the beginning of the year. At that point in time, the fragile macroeconomic environment in the country was impacted by the emergence of the COVID-19 pandemic, making the future uncertain and blurred. More than ever, it was in that challenging context that we lean on our competitive strengths.

At the beginning of the crisis, we focused on managing our cash position and cash generation, and we sought to optimize our productive structure. As the market began to pull in demand, we relied on our value chain to speed up sales, especially of bagged cement. All of this allowed us to expand our profitability, and enhanced our already solid balance sheet.

Additionally, we accomplished the seamless sale of our Paraguayan operation, an excellent deal in terms of value generation and timing, and continue executing our strategic expansion project in L´Amalí plant.

In the fourth quarter, our cement business continued to drive our solid results. Bag segment has confirmed the strong recovery, on the back of household and retail demand. Bulk cement posted a volume increase, as previous COVID-19 restrictions began to be lifted.

Looking into 2021, we believe the construction activity will be one of the key sectors to drive the expected economic turnaround. We remain focused on balancing growth and profitability.

We must feel proud of the results obtained in 2020, especially during this unprecedented times, which reflect the responsibility and values of our people, and stakeholders. Let´s keep moving forward together!"

Table 1: Financial Highlights

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

Three-months ended
December 31,

Twelve-months ended
December 31,

2020

2019

% Chg.

2020

2019

% Chg.

Net revenue

13,263

11,002

20.6

%

41,623

47,753

-12.8

%

Gross Profit

4,795

3,282

46.1

%

12,597

13,047

-3.4

%

Gross Profit margin

36.2

%

29.8

%

+632 bps

30.3

%

27.3

%

+294 bps

Adjusted EBITDA

4,725

3,355

40.8

%

13,277

12,958

2.5

%

Adjusted EBITDA Mg.

35.6

%

30.5

%

+513 bps

31.9

%

27.1

%

+476 bps

Net Profit

2,958

1,532

93.0

%

11,382

5,505

106.8

%

Net Profit attributable to owners of the Company

3,006

1,429

110.3

%

11,351

5,227

117.2

%

EPS

5.0429

2.3976

110.3

%

19.0445

8.7692

117.2

%

Shares outstanding at eop

596

596

0.0

%

596

596

0.0

%

Net Debt

2,065

10,762

-80.8

%

2,065

10,762

-80.8

%

Net Debt /LTM Adjusted EBITDA

0.16x

0.83x

-0.67x

0.16x

0.83x

-0.67x

Table 1b: Financial Highlights in Ps and in U.S. dollars (figures exclude the impact of IAS 29)

In million Ps.

Three-months ended
December 31,

Twelve-months ended
December 31,

2020

2019

% Chg.

2020

2019

% Chg.

Net revenue

12,782

7,757

64.8

%

36,259

28,638

26.6

%

Adjusted EBITDA

4,651

2,501

86.0

%

12,096

8,211

47.3

%

Adjusted EBITDA Mg.

36.4

%

32.2

%

+415 bps

33.4

%

28.7

%

+469 bps

Net Profit

3,694

972

279.9

%

12,733

2,378

435.5

%

Net Debt

2,065

10,762

-80.8

%

2,065

10,762

-80.8

%

Net Debt /LTM Adjusted EBITDA

0.16x

0.83x

-0.67x

0.16x

0.83x

-0.67x

In million US$

Three-months ended
December31,

Twelve-months ended
December31,

2020

2019

%Chg.

2020

2019

%Chg.

Ps./US$, av

79.92

57.24

39.6

%

70.59

47.72

47.9

%

Ps./US$, eop

84.15

60.22

39.7

%

84.15

60.22

39.7

%

Net revenue

160

136

18.0

%

514

600

-14.4

%

Adjusted EBITDA

58

44

33.2

%

171

172

-0.4

%

Adjusted EBITDA Mg.

36.4

%

32.2

%

+415 bps

33.4

%

28.7

%

+469 bps

Net Profit

46

17

172.1

%

180

50

262.0

%

Net Debt

25

179

-86.3

%

25

179

-86.3

%

Net Debt /LTM Adjusted EBITDA

0.16x

0.83x

-0.67x

0.16x

0.83x

-0.67x

Overview of Operations

Sales Volumes

Table 2: Sales Volumes2

Three-months ended
December 31,

Twelve-months ended
December 31,

2020

2019

% Chg.

2020

2019

% Chg.

Cement, masonry & lime

MM Tn

1.62

1.28

26.9

%

5.16

5.47

-5.6

%

Concrete

MM m3

0.15

0.13

12.8

%

0.30

0.80

-62.5

%

Railroad

MM Tn

1.17

1.12

4.5

%

3.79

4.47

-15.2

%

Aggregates

MM Tn

0.22

0.25

-9.5

%

0.57

1.09

-47.8

%

2 Sales volumes include inter-segment sales

Sales volumes of cement, masonry, and lime in Argentina during 4Q20 increased 26.9% to 1.62 million tons as the strong household and retail demand continues to drive the robust bagged cement sales. Bulk cement posted a volume increase of approximately 7% YoY, as previous COVID-19 restrictions in private works began to be lifted.

Likewise, Concrete segment was also positively impacted by some specific infrastructure projects, with sales volumes increasing 12.8% YoY, the first positive figure since the 1Q19.

Railroad segment volumes experienced a 4.5% increase versus the comparable quarter in 2019, with a positive effect of the recovery in building materials transported volumes, and negatively affected by frac-sand volumes which are still affected by lower demand from Vaca Muerta.

Aggregates during the quarter declined by 9.5% YoY impacted by low execution of private and public projects.

For FY20, our core segment, Cement, masonry, and lime reported a 5.6% YoY decline in sales volumes, mostly explained by the impact of the strict lockdown in 2Q20, and the slow recovery path in bulk cement, and very much supported by a very robust come-back in bagged cement, as household and retail demand remained very strong.

Concrete and Aggregates segments, declined by 62.5% and 47.8% YoY, respectively. They were much heavily affected than our core business, as the lock-down and economic uncertainty impacted directly in the execution of major private and public projects.

Railroad segment volumes fell 15.2% in 2020 principally reflecting the overall economic contraction, particularly hit by lower building materials and frac-sand volumes, and partially offset by other transported products.

Review of Financial Results

Table 3: Condensed Interim Consolidated Statements of Profit or Loss and Other Comprehensive Income

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

Three-months ended
December 31,

Twelve-months ended
December 31,

2020

2019

% Chg.

2020

2019

% Chg.

Net revenue

13,263

11,002

20.6

%

41,623

47,753

-12.8

%

Cost of sales

(8,468

)

(7,720

)

9.7

%

(29,026

)

(34,706

)

-16.4

%

Gross Profit

4,795

3,282

46.1

%

12,597

13,047

-3.4

%

Share of loss of associates

-

-

n/a

(404

)

-

n/a

Selling and administrative expenses

(1,044

)

(992

)

5.2

%

(3,455

)

(3,805

)

-9.2

%

Other gains and losses

83

42

96.4

%

147

61

140.4

%

Impairment of property, plant and equipment

-

-

n/a

(947

)

-

n/a

Tax on debits and credits to bank accounts

(130

)

(136

)

-4.4

%

(489

)

(550

)

-11.0

%

Finance gain (cost), net

Gain on net monetary position

483

120

300.7

%

839

1,518

-44.7

%

Exchange rate differences

270

480

-43.8

%

1,655

(1,625

)

n/a

Financial income

351

-

n/a

82

82

-0.7

%

Financial expense

(484

)

(789

)

-38.6

%

(1,508

)

(2,043

)

-26.2

%

Profit before taxes

4,324

2,007

115.4

%

8,517

6,685

27.4

%

Income tax expense

Current

(1,079

)

(472

)

128.6

%

(2,387

)

(1,424

)

67.6

%

Deferred

(287

)

(283

)

1.5

%

124

(776

)

n/a

Net profit from continuing operations

2,958

1,253

136.1

%

6,254

4,485

39.4

%

Income from discontinued operations

-

280

n/a

5,129

1,020

402.7

%

Net profit

2,958

1,532

93.0

%

11,382

5,505

106.8

%

Net Revenues

Net revenue increased 20.6% to Ps. 13,263 million in 4Q20, from Ps. 11,002 million in the comparable quarter last year, reflecting the solid momentum in our core cement business which was up 26.9%, on the back of a similar volumes’ expansion of 26.9%.

Railroad revenues decreased 19.1% in 4Q20 versus the same quarter in 2019, as the higher transported volumes were more than offset by lower pricing mix.

Concrete revenues declined by 17.0% when compared to the 4Q in the year ago period, as softer pricing affected the higher sales volumes. Aggregates decreased by 4.7%, as pricing performance partially compensated the 9.5% volume decline.

For FY20, net revenues decreased 12.8% to Ps. 41,623 million from Ps. 47,753 in the FY19, with revenues declines across all segments. Our core cement business suffer a softer annual decline of 4.7%.

Cost of sales, and Gross profit

Cost of sales increased 9.7% YoY reaching Ps. 8,468 million in 4Q20 mainly as a result of the higher volume sold but contained by higher efficiencies and lower unitary energy costs measured in US dollars and partially offset by higher labor costs.

Gross profit increased 46.1% YoY to Ps. 4,795 million in 4Q20 from Ps. 3,282 million in 4Q19, with gross profit margin expanding 632 basis points YoY to 36.2%, reflecting the recovery in cement sales volumes coupled with good cost performance.

During FY20, gross profit decreased 3.4% to Ps. 12,597 million with gross profit margin expanding 294 basis points to 30.3%.

Selling and Administrative Expenses

Selling and administrative expenses (SG&A) in 4Q20 increased 5.2% YoY to Ps. 1,044 million, from Ps. 992 million in 4Q19, mainly as a consequence of higher cement sales. As a percentage of revenues, SG&A decreased 115 basis points to 7.9% in 4Q20, from 9.0% in 4Q19 mostly explained by higher sales volumes.

During FY20, SG&A fell by 9.2% from the previous year levels, and as a percentage of sales stood at 8.3%, 33 bps higher than FY19.

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,

2020

2019

% Chg.

2020

2019

% Chg.

Adjusted EBITDA reconciliation:

Net profit

2,958

1,532

93.0

%

11,382

5,505

106.8

%

(+) Depreciation and amortization

891

1,023

-12.9

%

3,988

3,655

9.1

%

(+) Tax on debits and credits to bank accounts

130

136

-4.4

...

489

550

-11.0

%

(+) Income tax expense

1,366

755

81.0

%

2,264

2,200

2.9

%

(+) Financial interest, net

(36

)

582

n/a

859

1,563

-45.0

%

(+) Exchange rate differences, net

(270

)

(480

)

-43.8

%

(1,655

)

1,625

n/a

(+) Other financial expenses, net

169

207

-18.5

%

567

397

42.7

%

(+) Gain on net monetary position

(483

)

(120

)

300.7

%

(839

)

(1,518

)

-44.7

%

(+) Share of loss of associates

-

-

n/a

404

-

n/a

(+) Impairment of property, plant and equipment

-

-

n/a

947

-

n/a

(-) Income from discontinued operations

-

280

n/a

5,129

1,020

402.7

%

Adjusted EBITDA

4,725

3,355

40.8

%

13,277

12,958

2.5

%

Adjusted EBITDA Margin

35.6

%

30.5

%

+513 bps

31.9

%

27.1

%

+476 bps

Adjusted EBITDA increased 40.8% YoY in the fourth quarter of 2020 to Ps. 4,725 million, mostly explained by bagged cement. Likewise, Adjusted EBITDA margin expanded by 513 basis points to 35.6% compared to 30.5% in 4Q19 on the back of cement margins expansion.

In particular, Cement, masonry cement and lime segment Adjusted EBITDA margin expanded by 604 bps to 40.4%, mainly due to the increase in sales volume and the improved energy inputs.

Railroad Adjusted EBITDA margin deteriorated to -0.6%, mainly impacted by pricing mix, and partially offset by higher transported volume.

Concrete Adjusted EBITDA declined compared to 4Q19, with margin worsening to -19.2%,as softer pricing and higher costs outweighed the increase in sales volumes.

Finally, Aggregates Adjusted EBITDA margin decreased to -9.0% from -4.6%, with better pricing being outweighed by lower sales volume and higher costs.

During FY20, Adjusted EBITDA increased 2.5% reaching Ps. 13,277 million from Ps. 12,958 million in FY19, with an Adjusted EBITDA margin expansion of 476 basis points, from 27.1% in 2019 to 31.9% in 2020.

Finance Costs-Net

Table 5: Finance Gain (Cost), net

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

Three-months ended
December 31,

Twelve-months ended
December 31,

2020

2019

% Chg.

2020

2019

% Chg.

Exchange rate differences

270

480

-43.8

%

1,655

(1,625

)

n/a

Financial income

351

-

n/a

82

82

-0.7

%

Financial expense

(484

)

(789

)

-38.6

%

(1,508

)

(2,043

)

-26.2

%

Gain on net monetary position

483

120

300.7

%

839

1,518

-44.7

%

Total Finance Gain (Cost), Net

619

(189

)

n/a

1,068

(2,068

)

n/a

During 4Q20, the Company reported a total finance gain, net of Ps. 619 million compared to a total finance cost, net of Ps. 189 million in 4Q19, mainly due to lower Net Financial expenses, net which decreased by Ps. 656 million to negative Ps. 133 million resulting from a lower financial debt position.

During FY20, total finance gain, net was Ps. 1,068 million compared to a total finance cost, net of Ps. 2,068 million in FY19, mainly as a result of a foreign exchange gain, a lower Financial expenses due to a lower debt position, and partially compensated by a lower gain on net monetary position.

Net Profit and Net Profit Attributable to Owners of the Company

Net Profit for 4Q20 increased by Ps. 1,425 million to Ps. 2,958 million, mostly explained by a higher gross profit, which was further enhanced by a higher finance gain, net.

During FY20, Net Profit stood at Ps. 11,382 million, increasing 106.8% YoY, mostly explained by Ps. 5,129 million of income from discontinued operations in Paraguay, reflecting the sale of our stake in Yguazú Cementos S.A., and by the total finance gain, net of Ps. 1,068 million. Net profit from continuing operations increased by 39.4%.

Net Profit Attributable to Owners of the Company increased by Ps. 1,577 million YoY, to Ps. 3,006 million in 4Q20. During the quarter, the Company reported earnings per common share of Ps. 5.0429 and earnings per ADR of Ps. 25.2144, compared with earnings per common share of Ps. 2.3976 and earnings per ADR of Ps. 11.9878 in 4Q19.

During FY20, Net Profit attributable to owners of the Company increased 117.2% YoY, to Ps. 11,351 million, from Ps. 5,227 million in FY19, mostly as a consequence of the sale of our stake in Yguazú Cementos S.A., and further improved by a total finance gain during the period.

Capitalization

Table 6: Capitalization and Debt Ratio

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

As of December 31,

2020

2019

Total Debt

6,441

12,538

- Short-Term Debt

4,571

6,971

- Long-Term Debt

1,870

5,567

Cash and Cash Equivalents

4,376

1,776

Total Net Debt

2,065

10,762

Shareholders' Equity

45,391

39,927

Capitalization

51,831

52,465

LTM Adjusted EBITDA

13,277

12,958

Net Debt /LTM Adjusted EBITDA

0.16x

0.83x

As of December 31, 2020, total cash and cash equivalents were Ps. 4,376 million compared with Ps. 1,776 million as of the December 31, 2019. Total debt at the close of the quarter stood at Ps. 6,441 million, composed by Ps. 4,571 million in short-term borrowings, including the current portion of long-term borrowings (or 71.0% of total borrowings), and Ps. 1,870 million in long-term borrowings (or 29.0% of total borrowings).

As of December 31, 2020, 81.8% (or Ps. 5,268 million) Loma Negra’s total debt was denominated in U.S. dollars, 17.7% (or Ps. 1,141 million) in Euros, and 0.5% (or Ps. 32 million) in argentine pesos. The average duration of Loma Negra’s total debt was 0.8 years.

As of December 31, 2020, Ps. 5,268 million, or 81.8%, of the Company’s total consolidated borrowings bore interest at rates based on Libor, and Ps. 1,141 million of borrowings bore interest at a fixed rate.

The Net Debt to Adjusted EBITDA (LTM) ratio decreased to 0.16x as of December 31, 2020 from 0.83x as of December 31,2019 as the cashflow from operating activities and the proceeds from the sale our stake in Yguazú Cementos S.A. outweighed the cash used in our expansion project and the dividend paid out in October.

Cash Flows

Table 7: Condensed Interim Consolidated Statement of Cash Flows

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

Three-months ended
December 31,

Twelve-months
ended
December 31,

2020

2019

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES

Net profit (loss) from continuing operations

2,958

1,253

6,254

4,485

Income from discontinued operations

-

280

5,129

1,020

Net profit

2,958

1,532

11,382

5,505

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

2,212

202

943

5,833

Changes in operating assets and liabilities

(1,165

)

876

(937

)

(2,012

)

Net cash generated by / used in by operating activities

4,005

2,611

11,388

9,326

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from disposal of Yguazú Cementos S.A.

-

-

8,344

-

Property, plant and equipment, Intangible Assets, net

(1,706

)

(3,161

)

(9,686

)

(15,933

)

Contributions to Trust

(32

)

28

(88

)

(40

)

Net cash generated by / used in investing activities

(1,739

)

(3,133

)

(1,429

)

(15,973

)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds / Repayments from borrowings, Interest paid

(517

)

1,066

(7,840

)

3,498

Dividends paid

(2,664

)

-

(2,664

)

-

Net cash generated by / used in by financing activities

(3,180

)

1,066

(10,503

)

3,498

Net increase (decrease) in cash and cash equivalents

(914

)

544

(545

)

(3,149

)

Cash and cash equivalents at the beginning of the year

5,179

925

1,776

4,882

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

(46

)

(54

)

(157

)

(221

)

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

157

361

3,302

263

Cash and cash equivalents at the end of the period

4,376

1,776

4,376

1,776

In the 4Q20, our cash flow generated by operating activities was Ps. 4,005 million compared to Ps. 2,611 million in 4Q19 as higher Adjusted EBITDA growth more than offset the working capital needs. During 4Q20, the Company made capital expenditures for a total of Ps. 1,706 million, mostly allocated to the expansion of production capacity of L’Amalí plant.

During FY20, the Company made capital expenditures for a total of Ps. 9,686 million, of which 83% was allocated to the expansion of production capacity of L’Amalí plant. In the FY20, cash flow generated by operating activities was Ps. 11,388 million compared to Ps. 9,326 million in FY19 explained mainly by a higher profitability level and lower working capital needs.

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.

As of the end of 2020, the project presents an overall Progress of 96%. All detailed engineering is completed, all equipment and materials supplies has been delivered to site. While commissioning and start-up has been completed at crushing department and new primary crusher is fully operational, commissioning and start-up at raw mill department and clinker line are in progress.

Construction works executed 95% progress, has been slow down due to COVID-19 crisis, the works in progress are electromechanical erection works at clinker line, cement mill and dispatch areas. Inauguration date is expected to be by mid-2021.

Share Repurchase Plan.

On February 12, 2021, the Company announced the approval of a share repurchase plan, in accordance with Section 64 of Law No. 26.831 ("LMC") and the CNV Regulations. The purpose is to efficiently apply a portion of the Company´s cash position which may result in a greater return of value for its shareholders considering the current attractive value of the share, with the additional possibility of allocating part of the acquired shares to implement specific compensation programs or plans.

The plan became effective as from February 18, 2021, the amount to invest will be up to AR$ 750.000.000 (Argentine Pesos Seven Hundred Fifty Million) or such lower amount that derives from the repurchase of up to 10% of Company’s capital stock. The maximum amount of shares or maximum percentage of the Company’s capital stock to be repurchased shall never surpass the limit of 10% of the capital stock in accordance with Section 64 of LMC.

The source of funding shall be carried out with realized and liquid earnings as per the Financial Statements as of September 30, 2020 which were approved by Board’s Resolution of November 10, 2020. The Company has the liquidity needed to carry out the aforementioned acquisitions without affecting its solvency. The Company will carry out the share repurchase for a 90 (ninety) day period which will be counted since February 18, and will be subject to any period renewal or extension approved by the Board of Directors, which will be duly informed.

4Q20 Earnings Conference Call

When: 10:00 a.m. U.S. ET (12:00 a.m. BAT), March 11, 2021
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/loma210311nyV2G3X1.html
Replay: A telephone replay of the conference call will be available between March 11, 2021 at 1:00 pm U.S. E.T. and ending on March 17, 2021. 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 10152387. The audio of the conference call will also be archived on the Company’s website at www.lomanegra.com

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, plus share of loss of associates, plus net Impairment of Property, plant and equipment, and less income from discontinued operation. 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. 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

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

As of December 31,

2020

2019

ASSETS

Non-current assets

Property, plant and equipment

53,557

53,775

Right to use assets

447

555

Intangible assets

192

171

Investments

3

6,021

Goodwill

35

35

Inventories

2,156

2,038

Other receivables

481

765

Total non-current assets

56,872

63,361

Current assets

Inventories

5,492

6,593

Other receivables

1,217

765

Trade accounts receivable

2,989

3,232

Investments

4,109

1,388

Cash and banks

267

387

Total current assets

14,074

12,365

TOTAL ASSETS

70,946

75,726

SHAREHOLDERS' EQUITY

Capital stock and other capital related accounts

15,049

15,049

Reserves

18,719

16,165

Retained earnings

11,351

5,227

Accumulated other comprehensive income

-

450

Equity attributable to the owners of the Company

45,119

36,890

Non-controlling interests

271

3,037

TOTAL SHAREHOLDERS' EQUITY

45,391

39,927

LIABILITIES

Non-current liabilities

Borrowings

1,870

5,567

Accounts payables

102

190

Provisions

487

759

Salaries and social security payables

38

-

Debts for leases

390

463

Other liabilities

112

70

Deferred tax liabilities

7,276

7,400

Total non-current liabilities

10,276

14,448

Current liabilities

Borrowings

4,571

6,971

Accounts payable

5,393

11,891

Advances from customers

732

260

Salaries and social security payables

1,422

1,278

Tax liabilities

2,884

699

Debts for leases

140

139

Other liabilities

137

113

Total current liabilities

15,279

21,351

TOTAL LIABILITIES

25,555

35,799

TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES

70,946

75,726

Table 9: Condensed Interim 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,

2020

2019

% Change

2020

2019

% Change

Net revenue

13,263

11,002

20.6

%

41,623

47,753

-12.8

%

Cost of sales

(8,468

)

(7,720

)

9.7

%

(29,026

)

(34,706

)

-16.4

%

Gross profit

4,795

3,282

46.1

%

12,597

13,047

-3.4

%

Share of loss of associates

-

-

n/a

(404

)

-

n/a

Selling and administrative expenses

(1,044

)

(992

)

5.2

%

(3,455

)

(3,805

)

-9.2

%

Other gains and losses

83

42

96.4

%

147

61

140.4

%

Impairment of property, plant and equipment

-

-

n/a

(947

)

-

n/a

Tax on debits and credits to bank accounts

(130

)

(136

)

-4.4

%

(489

)

(550

)

-11.0

%

Finance gain (cost), net

Gain on net monetary position

483

120

300.7

%

839

1,518

-44.7

%

Exchange rate differences

270

480

-43.8

%

1,655

(1,625

)

n/a

Financial income

351

-

n/a

82

82

-0.7

%

Financial expenses

(484

)

(789

)

-38.6

%

(1,508

)

(2,043

)

-26.2

%

Profit before taxes

4,324

2,007

115.4

%

8,517

6,685

27.4

%

Income tax expense

Current

(1,079

)

(472

)

128.6

%

(2,387

)

(1,424

)

67.6

%

Deferred

(287

)

(283

)

1.5

%

124

(776

)

n/a

Net profit from continuing operations

2,958

1,253

136.1

%

6,254

4,485

39.4

%

Income from discontinued operations

-

280

n/a

5,129

1,020

402.7

%

Net profit

2,958

1,532

93.0

%

11,382

5,505

106.8

%

Other Comprehensive Income

Items to be reclassified through profit and loss:

Exchange differences on translating foreign operations

-

(512

)

n/a

(286

)

(246

)

16.6

%

Total other comprehensive (loss)

-

(512

)

n/a

(286

)

(246

)

16.6

%

TOTAL COMPREHENSIVE INCOME

2,958

1,020

189.9

%

11,096

5,260

111.0

%

Net Profit (loss) for the period attributable to:

Owners of the Company

3,006

1,429

110.3

%

11,351

5,227

117.2

%

Non-controlling interests

(48

)

103

n/a

31

279

-88.8

%

NET PROFIT FOR THE PERIOD

2,958

1,532

93.0

%

11,382

5,505

106.8

%

Total comprehensive (loss) income attributable to:

Owners of the Company

3,006

1,168

157.4

%

11,205

5,101

119.6

%

Non-controlling interests

(48

)

(148

)

-67.5

%

(109

)

158

n/a

TOTAL COMPREHENSIVE INCOME

2,958

1,020

189.9

%

11,096

5,260

111.0

%

Earnings per share (basic and diluted):

5.0429

2.3976

100.3

%

19.0445

8.7692

117.2

%

Table 10: Condensed Interim Consolidated Statement of Cash Flows

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

Three-months ended
December 31,

Twelve-months ended
December 31,

2020

2019

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES

Net profit from continuing operations

2,958

1,253

6,254

4,485

Income from discontinued operations

-

280

5,129

1,020

Net profit

2,958

1,532

11,382

5,505

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

Income tax expense

1,366

776

3,781

2,296

Depreciation and amortization

891

1,023

3,988

3,655

Provisions

(51

)

(57

)

(93

)

68

Interest expense

146

428

1,187

1,349

Exchange rate differences

(174

)

(1,677

)

(2,821

)

(415

)

Share of loss of associates

-

-

404

-

Gain on disposal of property, plant and equipment

(3

)

9

41

(5

)

Gain on disposal of shareholding of Yguazú Cementos S.A.

-

(301

)

(6,646

)

(1,116

)

Impairment of property, plant and equipment

-

-

947

-

Depreciation value of trust

37

-

157

-

Changes in operating assets and liabilities

Inventories

35

316

789

88

Other receivables

7

784

92

603

Trade accounts receivable

(289

)

(35

)

(541

)

(906

)

Advances from customers

145

12

526

(36

)

Accounts payable

(925

)

332

(249

)

1,372

Salaries and social security payables

508

246

515

482

Provisions

(7

)

(64

)

(48

)

(148

)

Tax liabilities

15

(25

)

(100

)

343

Other liabilities

182

(6

)

156

86

Gain on net monetary position

(483

)

(120

)

(839

)

(1,518

)

Income tax paid

(354

)

(563

)

(1,237

)

(2,378

)

Net cash generated by / used in by operating activities

4,005

2,611

11,388

9,326

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from disposal of Yguazú Cementos S.A.

-

-

8,344

-

Proceeds from disposal of Property, plant and equipment

0

40

40

89

Payments to acquire Property, plant and equipment

(1,625

)

(3,166

)

(9,639

)

(15,946

)

Payments to acquire Intangible Assets

(82

)

(36

)

(87

)

(76

)

Contributions to Trust

(32

)

28

(88

)

(40

)

Net cash generated by / used in investing activities

(1,739

)

(3,133

)

(1,429

)

(15,973

)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings

46

3,924

12,692

12,928

Interest paid

(80

)

(756

)

(2,909

)

(2,638

)

Debts for leases

(38

)

(39

)

(147

)

(137

)

Repayment of borrowings

(445

)

(2,064

)

(17,476

)

(6,654

)

Dividends paid

(2,664

)

-

(2,664

)

-

Net cash generated by / used in by financing activities

(3,180

)

1,066

(10,503

)

3,498

Net increase (decrease) in cash and cash equivalents

(914

)

544

(545

)

(3,149

)

Cash and cash equivalents at the beginning of the period

5,179

925

1,776

4,882

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

(46

)

(54

)

(157

)

(221

)

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

157

361

3,302

263

Cash and cash equivalents at the end of the period

4,376

1,776

4,376

1,776

Table 11: Financial Data by Segment (figures exclude the impact of IAS 29)

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

Three-months ended
December 31,

Twelve-months ended
December 31,

2020

%

2019

%

2020

%

2019

%

Net revenue

12,782

100.0

%

7,757

100.0

%

36,259

100.0

%

28,638

100.0

%

Cement, masonry cement and lime

11,695

91.5

%

6,744

86.9

%

33,128

91.4

%

24,007

83.8

%

Concrete

883

6.9

%

767

9.9

%

1,799

5.0

%

3,954

13.8

%

Railroad

922

7.2

%

834

10.8

%

3,089

8.5

%

2,982

10.4

%

Aggregates

155

1.2

%

119

1.5

%

357

1.0

%

498

1.7

%

Others

59

0.5

%

47

0.6

%

174

0.5

%

157

0.5

%

Eliminations

(931

)

-7.3

%

(754

)

-9.7

%

(2,287

)

-6.3

%

(2,960

)

-10.3

%

Cost of sales

7,589

100.0

%

4,931

100.0

%

22,782

100.0

%

19,291

100.0

%

Cement, masonry cement and lime

6,362

83.8

%

4,001

81.1

%

19,192

84.2

%

15,250

79.1

%

Concrete

1,032

13.6

%

782

15.9

%

2,292

10.1

%

3,761

19.5

%

Railroad

930

12.3

%

741

15.0

%

3,031

13.3

%

2,610

13.5

%

Aggregates

161

2.1

%

130

2.6

%

439

1.9

%

526

2.7

%

Others

36

0.5

%

31

0.6

%

115

0.5

%

103

0.5

%

Eliminations

(931

)

-12.3

%

(754

)

-15.3

%

(2,287

)

-10.0

%

(2,960

)

-15.3

%

Selling, admin. expenses and other gains & losses

874

100.0

%

580

100.0

%

2,649

100.0

%

2,123

100.0

%

Cement, masonry cement and lime

774

88.5

%

501

86.4

%

2,380

89.9

%

1,771

83.4

%

Concrete

30

3.4

%

29

5.0

%

30

1.2

%

120

5.6

%

Railroad

48

5.5

%

42

7.3

%

169

6.4

%

182

8.6

%

Aggregates

1

0.1

%

(11

)

-1.9

%

(1

)

0.0

%

(8

)

-0.4

%

Others

21

2.3

%

19

3.3

%

71

2.7

%

59

2.8

%

Depreciation and amortization

333

100.0

%

255

100.0

%

1,267

100.0

%

986

100.0

%

Cement, masonry cement and lime

232

69.7

%

184

72.0

%

802

63.3

%

722

73.2

%

Concrete

21

6.3

%

17

6.6

%

189

14.9

%

62

6.3

%

Railroad

72

21.8

%

52

20.3

%

250

19.7

%

183

18.6

%

Aggregates

6

1.9

%

5

1.9

%

23

1.8

%

19

1.9

%

Others

1

0.3

%

(2

)

-0.9

%

4

0.3

%

0

0.0

%

Adjusted EBITDA

4,651

100.0

%

2,501

100.0

%

12,096

100.0

%

8,211

100.0

%

Cement, masonry cement and lime

4,791

103.0

%

2,425

97.0

%

12,357

102.2

%

7,708

93.9

%

Concrete

(158

)

-3.4

%

(27

)

-1.1

%

(334

)

-2.8

%

135

1.6

%

Railroad

16

0.3

%

103

4.1

%

139

1.2

%

373

4.5

%

Aggregates

(1

)

0.0

%

5

0.2

%

(59

)

-0.5

%

(1

)

0.0

%

Others

4

0.1

%

(5

)

-0.2

%

(7

)

-0.1

%

(4

)

-0.1

%

Reconciling items:

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

74

855

1,181

4,747

Depreciation and amortization

(891

)

(1,023

)

(3,988

)

(3,655

)

Tax on debits and credits banks accounts

(130

)

(136

)

(489

)

(550

)

Finance gain (cost), net

619

(189

)

1,068

(2,068

)

Income tax

(1,366

)

(755

)

(2,264

)

(2,200

)

Share of profit of associates

-

-

(404

)

-

Impairment of property, plant and equipment

-

-

(947

)

-

Income from discontinued operations

-

280

5,129

1,020

NET (LOSS) PROFIT FOR THE PERIOD

2,958

1,532

11,382

5,505

View source version on businesswire.com: https://www.businesswire.com/news/home/20210310005902/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