Loma Negra Compania Industrial Argentina Q2 Earnings Call Highlights

Key Points

• Revenue grew despite weaker volumes: Second-quarter revenue rose 2.1% year over year to ARS 238.1 billion, supported by pricing, while cement volumes fell 1.4% but outperformed the broader 5% industry decline.
• Margins remained under pressure: Adjusted EBITDA declined 2.5% to ARS 48.2 billion, with the margin falling to 20.2% as higher packaging, maintenance, freight and depreciation costs offset pricing gains. Concrete and aggregates saw particularly sharp volume declines.
• Cash flow and balance-sheet metrics improved: Net profit increased to ARS 7.5 billion, operating cash flow turned positive at ARS 18.1 billion, and net debt fell to 1.3 times adjusted EBITDA. Management expects a gradual, uneven recovery, with RIGI-backed projects, road concessions and seasonal demand potentially supporting volumes later in 2026.

Loma Negra Compania Industrial Argentina NYSE: LOMA reported second-quarter 2026 revenue growth despite lower cement volumes, as pricing supported its top line while higher costs and depreciation weighed on margins.

Consolidated net revenue rose 2.1% year over year to ARS 238.1 billion. Cement volumes declined 1.4%, outperforming an industrywide 5% decline in cement dispatches during the quarter. Chief Executive Officer and Vice Chairman Sergio Faifman said heavy rains in April affected activity, while May and June trends returned closer to year-earlier levels.

Adjusted EBITDA totaled ARS 48.2 billion, down 2.5% from the prior-year quarter, and the adjusted EBITDA margin declined 97 basis points to 20.2%. In U.S. dollar terms, EBITDA was $38 million, while EBITDA generation per ton increased 14% year over year to $32.1, according to the company.

Demand Recovery Remains Uneven

Chief Financial Officer Marcos Gradin said Argentine economic and construction indicators showed a mixed picture during the quarter. Argentina’s monthly economic activity indicator rose 1.6% year over year in April but slowed to 0.2% growth in May. Construction activity, as measured by the ISAC indicator, declined 2.8% in April before rising 4.1% in May.

Within cement, bulk dispatches continued to outperform as concrete producers, industrial customers and construction companies supported demand. Bagged cement, however, remained under pressure as retail demand for self-construction and refurbishment projects stayed weak.

Faifman said the company expects the recovery to remain gradual and potentially volatile rather than follow a straight line. Management said projects approved under Argentina’s RIGI investment regime are beginning to advance and could support volumes in coming months. The company also cited road concessions granted by the government as a potential second-half contributor, although it said those projects were not yet supporting volumes.

During the question-and-answer session, Diego Jalón, Loma Negra’s head of investor relations, said the company does not expect a significant improvement in credit access during the second half. Still, he said RIGI-related projects and road concessions could provide support, while September typically begins the stronger seasonal period for cement dispatches.

Segment Performance and Margin Pressure

• Cement, masonry cement and lime: Revenue increased 2.2% year over year despite a 1.4% decline in volumes. Segment adjusted EBITDA margin was 23.9%, down 81 basis points.
• Concrete: Revenue fell 11.2% as volumes declined 18.6%, reflecting lower demand from special projects including port infrastructure and wind farms nearing completion. EBITDA margin improved to negative 4.3% from negative 13% a year earlier.
• Aggregates: Revenue declined 10.3% and volumes fell 12.2%, with weaker demand from public works and construction companies. EBITDA margin improved to negative 18.6% from negative 27%.
• Railroad: Revenue increased 8.6%, supported by a 10.1% gain in transported volumes, including grain, cement and frac sand. The segment’s EBITDA margin turned negative at 5.2%, compared with a positive 9.8% in the prior-year quarter.

Gross profit decreased 3.9% year over year, with gross margin contracting 122 basis points to 19.2%. Gradin attributed the pressure primarily to higher costs and depreciation. In cement, costs increased following the capitalization of the company’s 25-kilogram bagging project, as well as higher packaging, maintenance and freight expenses.

Jalón said freight costs rose during the quarter due to higher gas prices linked to the war, while the new bagging format added costs for packaging, energy, labor and depreciation. He said the company has reflected the bagging-project impact in pricing.

Management added that kilns are scheduled to restart in September and that the company has signed contracts for the upcoming production cycle on terms it expects to be better than those of the prior cycle. Higher volumes could also help dilute fixed costs, Jalón said.

Profit, Cash Flow and Debt

Net profit attributable to owners reached ARS 7.5 billion, compared with ARS 0.5 billion in the second quarter of 2025. The increase was driven mainly by lower financial expenses, partly offset by higher income tax expense.

The company reported a net financial loss of ARS 5.6 billion, improving from a ARS 22.3 billion loss a year earlier. Net financial expenses fell 27% to ARS 9.5 billion, which Gradin said reflected improved financial income and lower expenses.

Operating cash flow was ARS 18.1 billion, compared with an outflow of ARS 29.7 billion in the prior-year period, supported by working-capital improvements. Capital expenditures totaled ARS 9.7 billion, lower following completion of the 25-kilogram bagging project.

Loma Negra ended the quarter with net debt of ARS 274 billion, or $185 million, and a net debt-to-adjusted EBITDA ratio of 1.3 times, down from 1.47 times at the end of 2025. In May, the company canceled $10 million of Class 4 corporate bonds and said it has no remaining structured debt maturities for the rest of 2026.

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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