Loma Negra Compania Industrial Argentina NYSE: LOMA reported a modest increase in first-quarter revenue and improved profitability, as management said March activity helped offset a slow start to the year for Argentina’s cement industry.
On the company’s earnings call, CEO Sergio Faifman said cement volumes rose 1.8% year over year in the quarter, while consolidated net revenue increased 1.1%. He said the company delivered margin improvement both sequentially and from a year earlier, with consolidated adjusted EBITDA margin reaching 24.9%, up 94 basis points year over year and 528 basis points from the prior quarter.
“As previously indicated, the actions we have been implementing are beginning to be reflected in our results,” Faifman said, adding that the company is positioned for a more sustainable demand recovery.
March Improvement Offsets Soft Start
CFO Marcos Gradin said Argentina’s early-2026 economic indicators were mixed, with the EMAE economic activity indicator declining 2.1% year over year in February. Industry and commerce posted sharper contractions, while sectors tied to external demand, including mining and agriculture, performed better.
Gradin said construction showed more resilience. Argentina’s ISAC construction indicator declined 0.7% year over year in February, but was up 0.3% cumulatively for the first two months of the year. He also cited year-over-year increases in registered private construction employment and building permits in January.
Cement industry dispatches followed a similar pattern, Gradin said, with weak January and February volumes followed by a stronger March, when dispatches increased 11% year over year. That allowed the quarter to close broadly in line with the prior year. Bulk cement outperformed, supported by larger-scale projects, while bagged cement remained weaker amid cautious demand from retail customers and small contractors.
Looking to April, Gradin said dispatches were expected to be affected by unusually heavy rains that disrupted construction in major urban centers. He described the impact as temporary and weather-related, rather than a change in demand trends.
Revenue Growth Led by Cement and Rail
First-quarter consolidated revenue rose 1.1% year over year, with gains in the cement and railroad businesses partly offset by lower revenue in concrete and aggregates.
Cement, masonry cement and lime: Revenue increased 0.8% year over year. Volumes rose 1.8%, supported by concrete producers, larger-scale projects and public works, while pricing broadly tracked inflation.
Concrete: Revenue declined 1.9% despite a 14% increase in volumes. Gradin said private logistics infrastructure, larger residential projects and public works in Santa Fe supported volumes, but pricing remained pressured by competition.
Aggregates: Revenue slipped 0.2%, as an 18.3% drop in volumes was offset by improved pricing and a more favorable sales mix.
Railroad: Revenue increased 2.2%, with transported volumes up 14.8%, driven by granitic aggregates, cement and chemicals. Softer pricing partly offset the volume growth.
Margins Recover as Cost Controls Take Hold
Consolidated gross profit was nearly flat, down 0.3%, while gross margin contracted 37 basis points year over year to 26.1%. Sequentially, gross margin improved by 256 basis points.
Cost of sales increased 1.6% year over year, reflecting higher cement costs, including additional depreciation after completion of the 25-kilogram bagging project, as well as packing and maintenance costs. Gradin said energy inputs, freight and salaries helped contain costs. Selling, general and administrative expenses declined 3.9%, mainly due to lower salary and freight expenses, partly offset by higher IT and marketing expenses.
Consolidated adjusted EBITDA totaled $45 million, or ARS 54.6 billion, up 5.1% year over year. The cement segment’s adjusted EBITDA margin was 28.8%, broadly in line with the prior year. Concrete, aggregates and railroad margins all improved but remained negative.
Asked during the question-and-answer session about second-quarter margins, Faifman said management did not view the first-quarter margin performance as a surprise, citing cost-management efforts and pricing discipline. He said the company expects to maintain current margin levels or improve them in coming months.
Net Profit Rises on Financial Gains
Net profit attributable to owners of the company totaled ARS 41 billion, compared with ARS 28.5 billion in the first quarter of 2025. Gradin said the increase was mainly due to higher financial gains and improved operating performance, partly offset by higher income tax expense.
The company reported a net financial gain of ARS 32.4 billion, up from ARS 11.8 billion a year earlier. Gradin attributed the improvement primarily to foreign exchange gains related to the roughly 5% appreciation of the peso during the quarter on the company’s U.S. dollar-denominated liabilities.
Loma Negra ended the quarter with net debt of ARS 259 billion, or $186 million, and a net debt-to-adjusted EBITDA ratio of 1.3 times, down from 1.47 times at the end of 2025. Operating cash flow improved to ARS 19.7 billion from ARS 1.8 billion a year earlier, helped by lower working capital requirements and better operating results.
Company Maintains Cautiously Optimistic Outlook
Management said it remains cautiously optimistic about 2026 demand. In response to a question from Sofia Vatta of Latin Securities, Faifman said April volumes would be lower because of weather, but the company remains optimistic for May and the rest of the year. He said Loma Negra still expects high-single-digit growth for the year.
Faifman also said lower and stabilizing interest rates, easing monetary conditions and a recovery in credit could support construction activity. He cited infrastructure investment, housing needs, road concessions and the broader construction cycle as medium-term demand drivers.
On pricing, Faifman said the company continues to focus on maximizing price and profitability while closely monitoring costs. He said price adjustments could occur monthly, every two months or every three months, depending on inflation’s impact on costs, but added that Loma Negra does not foresee a change in its commercial strategy or in the market.
The company also highlighted the January issuance of a $60 million Class 6 corporate bond with a 36-month term and 6.5% interest rate. Gradin said the issuance covered the company’s U.S. dollar maturities for the year and extended its debt profile.
About Loma Negra Compania Industrial Argentina NYSE: LOMA
Loma Negra Compañía Industrial Argentina SA is the leading cement producer in Argentina, with a history dating back to its founding in Buenos Aires in 1926. The company operates an integrated network of cement and lime plants, as well as quarries and ready-mix concrete facilities. Its operations encompass the extraction of limestone, the production of clinker, hydraulic cement and quicklime, and the distribution of aggregates and concrete for a wide range of construction projects.
The company's product portfolio serves residential, commercial, industrial and public infrastructure markets across Argentina.
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