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 six-month period ended June 30, 2020 (our “2Q20”).
2Q20 Key Highlights
- Net revenue decreased 30.1% YoY to Ps.7,453 million (US$108 million), reflecting the full impact of the COVID-19 pandemic and the extended lockdown
- Consolidated Adjusted EBITDA down 24.6% YoY to Ps.2,077 million (US$32 million)
- Consolidated Adjusted EBITDA margin expanded by 204 basis points YoY from 25.8% to 27.9%, driven by cost control efforts and efficiency enhancement from previous structure adequacy efforts
- Net Debt /LTM Adjusted EBITDA ratio of 1.17x from 1.26x in 1Q20 and 0.86x in FY19
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 second quarter of 2020, Sergio Faifman, Loma Negra’s Chief Executive Officer, noted: “As a consequence of the COVID-19 pandemic, we entered the second quarter amid an unprecedented nation-wide lockdown which negatively impacted our businesses. Along the quarter, and depending on how the sanitation situation developed in each jurisdiction, some of these restrictions were softened, or even lifted. In anticipation of the effects of COVID-19, we took proactive measures with special focus on adopting strict biosafety protocols in our operations and maintaining our financial strength on our balance sheet.
Cement demand in Argentina in the Second quarter contracted around 32% YoY and around 4% when compared sequentially with the previous quarter. Taking a closer look on the behavior of our demand, we observed that the initial plummeting of sales in April was followed by a strong recovery since May in the bag segment across the country.
Our top line for the quarter decreased also around 30% year-on-year to 7.5 billion pesos, and our adjusted EBITDA declined by 24.6% to 2.1 billion pesos. Our EBITDA margin expanded by 204 basis points to 27.9%, mainly reflecting our efforts in cost control and our commitment to maintaining a healthy productivity and efficiency levels. Our core cement business remained the principal factor behind these margin expansion.
As previously anticipated, works on L´Amalí project were resumed on late April after the temporarily restrictions due to the COVID-19 were lifted. Certainly, this suspension together with the biosafety protocols adopted have delayed the inauguration date of the project, which is now expected to be at the beginning of 2021.
We remain alert and cautious regarding the evolution of this worldwide crisis, which ending seems hard to predict.
I would finally like to thank our people who, in this unprecedented COVID-19 situation, showed a great responsibility and resourcefulness in order to overcome difficulties and to keep on running the business.”
Table 1: Financial Highlights | ||||||||||||
(amounts expressed in millions of pesos, unless otherwise noted) | ||||||||||||
Three-months ended
| Six-months ended
| |||||||||||
2020 | 2019 | % Chg. | 2020 | 2019 | % Chg. | |||||||
Net revenue | 7,453 | 10,664 | -30.1% | 15,635 | 22,291 | -29.9% | ||||||
Gross Profit | 1,800 | 2,737 | -34.2% | 4,293 | 6,089 | -29.5% | ||||||
Gross Profit margin | 24.1% | 25.7% | -151bps | 27.5% | 27.3% | +14bps | ||||||
Adjusted EBITDA | 2,077 | 2,754 | -24.6% | 4,819 | 6,093 | -20.9% | ||||||
Adjusted EBITDA Mg. | 27.9% | 25.8% | +204bps | 30.8% | 27.3% | +349bps | ||||||
Net Profit | 111 | 1,570 | -93.0% | 1,038 | 3,238 | -67.9% | ||||||
Net Profit attributable to owners of the Company | 82 | 1,521 | -94.6% | 985 | 3,106 | -68.3% | ||||||
EPS | 0.1371 | 2.5511 | -94.6% | 1.6528 | 5.2104 | -68.3% | ||||||
Shares outstanding at eop | 596 | 596 | 0.0% | 596 | 596 | 0.0% | ||||||
Net Debt | 14,123 | 7,281 | 94.0% | 14,123 | 7,281 | 94.0% | ||||||
Net Debt /LTM Adjusted EBITDA | 1.17x | 0.58x | 0.60x | 1.17x | 0.58x | 0.60x |
Table 1b: Financial Highlights in Ps and in U.S. dollars (figures exclude the impact of IAS 29) | ||||||||||||
In million Ps. | Three-months ended
| Six-months ended
| ||||||||||
2020 | 2019 | % Chg. | 2020 | 2019 | % Chg. | |||||||
Net revenue | 7,334 | 7,262 | 1.0% | 14,857 | 14,395 | 3.2% | ||||||
Adjusted EBITDA | 2,133 | 1,958 | 9.0% | 4,724 | 4,076 | 15.9% | ||||||
Adjusted EBITDA Mg. | 29.1% | 27.0% | +213bps | 31.8% | 28.3% | +348bps | ||||||
Net Profit | 644 | 1,025 | -37.1% | 644 | 1,025 | -37.1% | ||||||
Net Debt | 14,123 | 4,908 | 187.8% | 14,123 | 4,908 | 187.8% | ||||||
Net Debt /LTM Adjusted EBITDA | 1.17x | 0.58x | 0.60x | 1.17x | 0.58x | 0.60x | ||||||
In million US$ | Three-months ended
| Six-months ended
| ||||||||||
2020 | 2019 | %Chg. | 2020 | 2019 | %Chg. | |||||||
Ps./US$, av | 67.71 | 44.04 | 53.7% | 64.59 | 41.46 | 55.8% | ||||||
Ps./US$, eop | 70.46 | 42.45 | 66.0% | 70.46 | 42.45 | 66.0% | ||||||
Net revenue | 108 | 165 | -34.3% | 230 | 347 | -33.7% | ||||||
Adjusted EBITDA | 32 | 44 | -29.1% | 73 | 98 | -25.6% | ||||||
Adjusted EBITDA Mg. | 29.1% | 27.0% | +213bps | 31.8% | 28.3% | +348bps | ||||||
Net Profit | 10 | 23 | -59.1% | 10 | 25 | -59.6% | ||||||
Net Debt | 200 | 116 | 73.4% | 200 | 116 | 73.4% | ||||||
Net Debt /LTM Adjusted EBITDA | 1.17x | 0.58x | 0.60x | 1.17x | 0.58x | 0.60x | ||||||
Overview of Operations
Sales Volumes
Table 2: Sales Volumes2 | ||||||||||||||
Three-months ended
| Six-months ended
| |||||||||||||
2020 | 2019 | % Chg. | 2020 | 2019 | % Chg. | |||||||||
Cement, masonry & lime | ||||||||||||||
Argentina | MM Tn | 1.01 | 1.33 | -24.5% | 2.01 | 2.70 | -25.7% | |||||||
Paraguay | MM Tn | 0.13 | 0.12 | 0.8% | 0.26 | 0.28 | -6.8% | |||||||
Cement, masonry & lime total | 1.13 | 1.46 | -22.3% | 2.26 | 2.98 | -24.0% | ||||||||
Argentina: | ||||||||||||||
Concrete | MM m3 | 0.02 | 0.22 | -92.3% | 0.09 | 0.47 | -80.4% | |||||||
Railroad | MM Tn | 0.63 | 1.13 | -44.3% | 1.57 | 2.23 | -29.8% | |||||||
Aggregates | MM Tn | 0.03 | 0.30 | -90.9% | 0.15 | 0.59 | -73.9% | |||||||
2 Sales volumes include inter-segment sales |
Sales volumes of cement, masonry and lime in Argentina during 2Q20 declined 24.5% to 1.01 million tons reflecting the full impact of the COVID-19 lockdown and the negative economic momentum in the country. Bag segment was more resilient, presenting a very strong recovery dynamic since May, including some positive growth rates when compared to the year ago quarter. On the other hand, bulk segment was heavily impacted by the absence of private and public works, particularly in those jurisdictions where the COVID-19 restriction was stricter.
In Paraguay, the impact of COVID-19 lock-down affected heavily sales volumes in April. Afterwards, our sales rebounded vigorously, achieving in June a record high level. Consequently, sales volumes in the second quarter grew to reached 0.13 million tons, or 0.8% when compared to 2Q19.
As a result, consolidated total sales volumes of cement, masonry and lime for the quarter decreased 22.3% YoY to 1.13 million tons.
Sales volumes in the Concrete segment and Aggregates in Argentina plummeted 92.3% and 90.9% YoY, to 0.02 million m3 and 0.03 million tons, respectively, heavily affected by the strict lock-down and the consequent impact in private and public projects.
Railroad segment volumes experienced a 44.3% decline versus the comparable quarter in 2019, mainly explained by the volume drop of building materials and frac-sand, as well as a decline in most other transported products.
Review of Financial Results
Table 3: Consolidated Statement of Financial Position | ||||||||||||
(amounts expressed in millions of pesos, unless otherwise noted) | ||||||||||||
Three-months ended
| Six-months ended
| |||||||||||
2020 | 2019 | % Chg. | 2020 | 2019 | % Chg. | |||||||
Net revenue | 7,453 | 10,664 | -30.1% | 15,635 | 22,291 | -29.9% | ||||||
Cost of sales | (5,653) | (7,928) | -28.7% | (11,342) | (16,202) | -30.0% | ||||||
Gross Profit | 1,800 | 2,737 | -34.2% | 4,293 | 6,089 | -29.5% | ||||||
Selling and administrative expenses | (641) | (694) | -7.6% | (1,305) | (1,672) | -21.9% | ||||||
Other gains and losses | 4 | (17) | n/a | 51 | (20) | n/a | ||||||
Tax on debits and credits to bank accounts | (69) | (58) | 19.5% | (177) | (231) | -23.6% | ||||||
Finance costs, net | ||||||||||||
Exchange rate differences | (560) | 414 | n/a | (739) | 162 | n/a | ||||||
Financial income | 40 | (25) | n/a | 31 | 14 | 117.5% | ||||||
Financial expenses | (655) | (511) | 28.0% | (1,077) | (826) | 30.3% | ||||||
Gain (loss) on net monetary position | 68 | 499 | -86.4% | 198 | 816 | -75.7% | ||||||
Profit before taxes | (12) | 2,345 | n/a | 1,275 | 4,332 | -70.6% | ||||||
Income tax expense | ||||||||||||
Current | 49 | (478) | n/a | (235) | (1,013) | -76.8% | ||||||
Deferred | 73 | (297) | n/a | (2) | (81) | -97.5% | ||||||
Net profit | 111 | 1,570 | -93.0% | 1,038 | 3,238 | -67.9% | ||||||
Net majority income | 82 | 1,521 | -94.6% | 985 | 3,106 | -68.3% | ||||||
Net Revenues
Net revenue decreased 30.1% to Ps. 7,453 million in 2Q20, from Ps. 10,664 million in the comparable quarter last year, reflecting the full impact of the COVID-19 lockdown and the negative economic momentum.
Revenues in Cement, masonry and lime in Argentina declined by 25.8% YoY, as a result of the sharp volume drop particularly in the bulk segment. Cement revenues in Paraguay improved 3.3% YoY, as more flexible conditions were imposed to control the COVID-19 situation.
Railroad revenues decreased 36.1% YoY versus the comparable quarter in 2019, mainly explained by the drop in building materials, frac-sand, and most other transported products, and marginally compensated by higher services rendered.
Concrete and Aggregate revenues plummeted 92.6% and 94.0%, respectively. Both sales volumes and prices declined when compared to the 2Q in the year ago period. These segments were much more impacted by the COVID-19 restrictions as they are strongly related to private and public infrastructure works and have a higher exposure to main urban centers.
Cost of sales, and Gross profit
Cost of sales decreased 28.7% YoY reaching Ps.5,653 million in 2Q20 mainly as a result of the lower volume sold coupled with higher efficiencies and lower unitary energy costs measured in US dollars. Additionally, structure costs benefitted by previous footprint adequacy efforts.
Gross profit declined 34.2% YoY to Ps.1,800 million in 2Q20 from Ps.2,737 million in 2Q19, with gross profit margin contracting 151 basis points YoY to 24.1%, affected by the full impact of COVID-19 and a higher burden of depreciations and amortizations.
Selling and Administrative Expenses
Selling and administrative expenses (SG&A) in 2Q20 decreased 7.6% YoY to Ps.641 million, from Ps.694 million in 2Q19. As a percentage of revenues, SG&A increased 209 basis points to 8.6% in 2Q20, from 6.5% in 2Q19 negatively impacted by the strong decline in revenues.
Adjusted EBITDA & Margin
Table 4: Adjusted EBITDA Reconciliation & Margin | ||||||||||||
(amounts expressed in millions of pesos, unless otherwise noted) | ||||||||||||
Three-months ended
| Six-months ended
| |||||||||||
2020 | 2019 | % Chg. | 2020 | 2019 | % Chg. | |||||||
Adjusted EBITDA reconciliation: | ||||||||||||
Net profit | 111 | 1,570 | -93.0% | 1,038 | 3,238 | -67.9% | ||||||
(+) Depreciation and amortization | 914 | 728 | 25.5% | 1,780 | 1,697 | 4.9% | ||||||
(+) Tax on debits and credits to bank accounts | 69 | 58 | 19.5% | 177 | 231 | -23.6% | ||||||
(+) Income tax expense | (123) | 775 | n/a | 237 | 1,093 | -78.3% | ||||||
(+) Financial interest, net | 581 | 468 | 24.1% | 920 | 721 | 27.7% | ||||||
(+) Exchange rate differences, net | 560 | (414) | n/a | 739 | (162) | n/a | ||||||
(+) Other financial expenses, net | 34 | 68 | -50.5% | 126 | 92 | 37.9% | ||||||
(+) Gain (loss) on net monetary position | (68) | (499) | -86.4% | (198) | (816) | -75.7% | ||||||
Adjusted EBITDA | 2,077 | 2,754 | -24.6% | 4,819 | 6,093 | -20.9% | ||||||
Adjusted EBITDA Margin | 27.9% | 25.8% | +204bps | 30.8% | 27.3% | +349bps |
Adjusted EBITDA decreased 24.6% YoY in the second quarter of 2020 to Ps. 2,077 million. While EBITDA was significantly impacted by the sharp decline in revenues, our Adjusted EBITDA margin expanded by 204 basis points to 27.9% compared to 25.8% in 2Q19, which had been impacted by non-recurrent costs related to production footprint adequacy efforts.
Table 11, presenting financial Data by Segment (Excluding IAS 29), shows that for the Cement, masonry and lime segment in Argentina Adjusted EBITDA margin expanded by 155 basis points to 30.7% during the second quarter. The Cement segment in Paraguay, presents an Adjusted EBITDA margin of 42.4%, expanding 104 basis points compared to the same period one year ago.
In addition, the Concrete and Aggregates segments reported a sharp decline in Adjusted EBITDA margin posting a negative 82.7% and 173%, respectively, as a consequence of the virtually non-existing private or public infrastructure works.
In line with the sharp decline in building material transportation and in the overall economic activity in this second quarter, Railroad segment Adjusted EBITDA margin contracted to 6.9% from 12.8% in the comparable period in 2019.
Finance Costs-Net
Table 5: Finance Costs, net | ||||||||||||
(amounts expressed in millions of pesos, unless otherwise noted) | ||||||||||||
Three-months ended
| Six-months ended
| |||||||||||
2020 | 2019 | % Chg. | 2020 | 2019 | % Chg. | |||||||
Exchange rate differences | (560) | 414 | n/a | (739) | 162 | n/a | ||||||
Financial income | 40 | (25) | n/a | 31 | 14 | 117.5% | ||||||
Financial expenses | (655) | (511) | 28.0% | (1,077) | (826) | 30.3% | ||||||
Gain (loss) on net monetary position | 68 | 499 | -86.4% | 198 | 816 | -75.7% | ||||||
Total Finance Costs, Net | (1,106) | 377 | n/a | (1,587) | 166 | n/a |
During 2Q20, the Company reported a loss of Ps.1,106 million in total finance costs-net compared to a gain of Ps. 377 million in the previous year second quarter, mainly due to a loss in foreign exchange differences as a consequence of the exchange rate depreciation during the quarter.
Net Financial expense increased by Ps.78 million to Ps.615 million resulting from a higher gross debt position together with higher interest rates.
Net Profit and Net Profit Attributable to Owners of the Company
Net Profit for 2Q20, decreased 93.0% to Ps.111 million from Ps.1,570 million in the corresponding quarter of the previous year, heavily impacted by foreign exchange loss.
Net Profit Attributable to Owners of the Company decreased 94.6% YoY, or Ps.1,439 million, to Ps.82 million in 2Q20. During the quarter, the Company reported earnings per common share of Ps.0.1371 and earnings per ADR of Ps.0.6857, compared with earnings per common share of Ps.2.5511 and earnings per ADR of Ps.12.7553 in 2Q19.
Capitalization
Table 6: Capitalization and Debt Ratio | ||||||
(amounts expressed in millions of pesos, unless otherwise noted) | ||||||
As of
| As of
| |||||
2020 | 2019 | 2019 | ||||
Total Debt | 17,506 | 9,501 | 13,888 | |||
- Short-Term Debt | 9,923 | 5,300 | 6,289 | |||
- Long-Term Debt | 7,583 | 4,200 | 7,598 | |||
Cash and Cash Equivalents | 3,383 | 2,220 | 2,916 | |||
Total Net Debt | 14,123 | 7,281 | 10,972 | |||
Shareholders' Equity | 34,262 | 29,020 | 33,314 | |||
Capitalization | 51,767 | 38,520 | 47,202 | |||
LTM Adjusted EBITDA | 12,053 | 12,627 | 12,730 | |||
Net Debt /LTM Adjusted EBITDA | 1.17x | 0.58x | 0.86x |
As of June 30, 2020, total cash and cash equivalents were Ps.3,383 million compared with Ps.2,916 million as of the December 31, 2019. Total debt at the close of the quarter stood at Ps.17,506 million, composed by Ps.9,923 million in short-term borrowings, including the current portion of long-term borrowings (or 57% of total borrowings), and Ps.7,583 million in long-term borrowings (or 43% of total borrowings).
As of June 30, 2020, 48% (or Ps.8,421 million) Loma Negra’s total debt was denominated in Argentine pesos, 32% (or Ps.5,515 million) in U.S. dollars, 15% (or Ps.2,696 million) in Guaraníes, and 5% (or Ps.874 million) in Euros. The average duration of Loma Negra’s total debt was 1.2 years.
As of June 30, 2020, Ps.13,223 million, or 76%, of the Company’s total consolidated borrowings bore interest at floating rates, including Ps.7,035 million of Peso-denominated borrowings that bore interest at rates based on the Buenos Aires Deposits of Large Amount Rate, or BADLAR, Ps.4,802 million of foreign currency-denominated borrowings that bore interest at rates based on Libor, and Ps.1,387 million of borrowings with other floating interest rate.
The Net Debt to Adjusted EBITDA (LTM) ratio decreased to 1.17x as of June 30, 2020 from 1.26x as of March 31,2020 as a result of cash management and liabilities actions taken during the quarter. Compared to December 31, 2019 the ratio increased from 0.86x reflecting the use of funds in investing activities.
Cash Flows
Table 7: Condensed Interim Consolidated Statement of Cash Flows for the Three-months and Six-months ended June 30, 2020 and 2019 | ||||||||
(amounts expressed in millions of pesos, unless otherwise noted) | ||||||||
Three-months
| Six-months
| |||||||
2020 | 2019 | 2020 | 2019 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net profit for the period | 111 | 1,570 | 1,038 | 3,238 | ||||
Adjustments to reconcile net profit to net cash provided by operating activities | 1,604 | 1,077 | 3,286 | 2,896 | ||||
Changes in operating assets and liabilities | 1,416 | (1,221) | (883) | (3,808) | ||||
Net cash generated by operating activities | 3,131 | 1,427 | 3,442 | 2,326 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Property, plant and equipment, Intangible Assets, net | (1,013) | (3,793) | (5,270) | (6,744) | ||||
Others | (0) | (8) | (22) | (33) | ||||
Net cash used in investing activities | (1,013) | (3,800) | (5,292) | (6,777) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds / Repayments from borrowings, Interest paid | (1,088) | 1,955 | 2,401 | 1,323 | ||||
Net cash generated (used) in by financing activities | (1,088) | 1,955 | 2,401 | 1,323 | ||||
Net increase (decrease) in cash and cash equivalents | 1,031 | (419) | 551 | (3,129) | ||||
Cash and cash equivalents at the beginning of the year | 2,352 | 2,394 | 2,916 | 5,071 | ||||
Effect of the re-expression in homogeneous cash currency ("Inflation-Adjusted") | (19) | (54) | (62) | (92) | ||||
Effects of the exchange rate differences on cash and cash equivalents in foreign currency | 19 | (252) | (22) | (181) | ||||
Cash and cash equivalents at the end of the period | 3,383 | 1,670 | 3,383 | 1,670 |
In the 2Q20, amid the COVID-19 situation, our cash flow generated by operating activities was Ps.3,131 million compared to Ps.1,427 million in 2Q19 as we remained focused on operational and financial actions that resulted in lower working capital requirements for the quarter. During 2Q20, the Company made capital expenditures for a total of Ps.1,013 million, mostly allocated to the expansion of production capacity of L’Amalí plant.
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.
On March 20, and in compliance with the Decree 297 (COVID-19), the expansion project had been temporarily suspended provoking a delay on the project execution. In April, permission to re-start works on the project was granted. Construction works stopped for approximately 45 days and then restarted with restricted manpower following biosafety protocols.
In the quarter, all detailed engineering was completed, all equipment and materials supplies has been delivered to site, and commissioning and start-up has been completed at crushing department.
Certainly, the impact of the delay, the adoption of new construction protocol, or any other potential measures related to COVID-19 pandemic may provoke additional delays to the startup of the new production line, which is now expected to be at the beginning of 2021.
2Q20 Earnings Conference Call
When: | 10:00 a.m. U.S. ET (11:00 a.m. BAT), August 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/loma200810MHm4I5mn.html |
Replay: | A telephone replay of the conference call will be available between August 11, 2020 at 1:00 pm U.S. E.T. and ending on August 17, 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 10145890. 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. 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 June 30, 2020 and December 31, 2019 | ||||||
(amounts expressed in millions of pesos, unless otherwise noted) | ||||||
As of June 30, | As of December 31, | |||||
2020 | 2019 | |||||
ASSETS | ||||||
Non-current assets | ||||||
Property, plant and equipment | 50,955 | 51,141 | ||||
Intangible assets | 120 | 146 | ||||
Investments | 3 | 3 | ||||
Goodwill | 29 | 29 | ||||
Inventories | 1,890 | 1,782 | ||||
Other receivables | 568 | 645 | ||||
Right to use assets | 419 | 464 | ||||
Trade accounts receivable | - | 3 | ||||
Total non-current assets | 53,984 | 54,212 | ||||
Current assets | ||||||
Inventories | 6,402 | 6,150 | ||||
Other receivables | 794 | 703 | ||||
Trade accounts receivable | 2,708 | 3,126 | ||||
Investments | 2,012 | 1,158 | ||||
Cash and banks | 1,371 | 1,758 | ||||
Total current assets | 13,287 | 12,896 | ||||
TOTAL ASSETS | 67,271 | 67,108 | ||||
SHAREHOLDERS' EQUITY | ||||||
Capital stock and other capital related accounts | 12,557 | 12,557 | ||||
Reserves | 17,849 | 13,487 | ||||
Retained earnings | 985 | 4,361 | ||||
Accumulated other comprehensive income | 329 | 375 | ||||
Equity attributable to the owners of the Company | 31,719 | 30,780 | ||||
Non-controlling interests | 2,543 | 2,534 | ||||
TOTAL SHAREHOLDERS' EQUITY | 34,262 | 33,314 | ||||
LIABILITIES | ||||||
Non-current liabilities | ||||||
Borrowings | 7,583 | 7,598 | ||||
Accounts payables | 81 | 158 | ||||
Provisions | 674 | 643 | ||||
Other liabilities | 51 | 58 | ||||
Debts for leases | 369 | 386 | ||||
Deferred tax liabilities | 6,229 | 6,228 | ||||
Total non-current liabilities | 14,986 | 15,073 | ||||
Current liabilities | ||||||
Borrowings | 9,923 | 6,289 | ||||
Accounts payable | 6,197 | 10,296 | ||||
Advances from customers | 306 | 219 | ||||
Salaries and social security payables | 719 | 1,089 | ||||
Tax liabilities | 689 | 617 | ||||
Debts for leases | 117 | 117 | ||||
Other liabilities | 73 | 95 | ||||
Total current liabilities | 18,023 | 18,722 | ||||
TOTAL LIABILITIES | 33,009 | 33,794 | ||||
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 67,271 | 67,108 |
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
| Six-months ended
| |||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | |||||||
Net revenue | 7,453 | 10,664 | -30.1% | 15,635 | 22,291 | -29.9% | ||||||
Cost of sales | (5,653) | (7,928) | -28.7% | (11,342) | (16,202) | -30.0% | ||||||
Gross profit | 1,800 | 2,737 | -34.2% | 4,293 | 6,089 | -29.5% | ||||||
Selling and administrative expenses | (641) | (694) | -7.6% | (1,305) | (1,672) | -21.9% | ||||||
Other gains and losses | 4 | (17) | n/a | 51 | (20) | n/a | ||||||
Tax on debits and credits to bank accounts | (69) | (58) | 19.5% | (177) | (231) | -23.6% | ||||||
Finance costs, net | ||||||||||||
Exchange rate differences | (560) | 414 | n/a | (739) | 162 | n/a | ||||||
Financial income | 40 | (25) | n/a | 31 | 14 | 117.5% | ||||||
Financial expenses | (655) | (511) | 28.0% | (1,077) | (826) | 30.3% | ||||||
Gain (loss) on net monetary position | 68 | 499 | -86.4% | 198 | 816 | -75.7% | ||||||
(Loss) Profit before taxes | (12) | 2,345 | n/a | 1,275 | 4,332 | -70.6% | ||||||
Income tax expense | ||||||||||||
Current | 49 | (478) | n/a | (235) | (1,013) | -76.8% | ||||||
Deferred | 73 | (297) | n/a | (2) | (81) | -97.5% | ||||||
Net profit | 111 | 1,570 | -93.0% | 1,038 | 3,238 | -67.9% | ||||||
Other Comprehensive Income | ||||||||||||
Items to be reclassified through profit and loss: | ||||||||||||
Exchange differences on translating foreign operations | 32 | (385) | n/a | (91) | (400) | -77.2% | ||||||
Total other comprehensive (loss) income | 32 | (385) | n/a | (91) | (400) | -77.2% | ||||||
TOTAL COMPREHENSIVE (LOSS) INCOME | 142 | 1,185 | -88.0% | 947 | 2,839 | -66.6% | ||||||
Net Profit (loss) for the period attributable to: | ||||||||||||
Owners of the Company | 82 | 1,521 | -94.6% | 985 | 3,106 | -68.3% | ||||||
Non-controlling interests | 29 | 49 | -41.6% | 53 | 133 | -59.8% | ||||||
NET (LOSS) PROFIT FOR THE PERIOD | 111 | 1,570 | -93.0% | 1,038 | 3,238 | -67.9% | ||||||
Total comprehensive (loss) income attributable to: | ||||||||||||
Owners of the Company | 98 | 1,324 | -92.6% | 939 | 2,902 | -67.7% | ||||||
Non-controlling interests | 44 | (139) | n/a | 9 | (63) | n/a | ||||||
TOTAL COMPREHENSIVE (LOSS) INCOME | 142 | 1,185 | -88.0% | 947 | 2,839 | -66.6% | ||||||
Earnings per share (basic and diluted): | 0.1371 | 2.5511 | -94.6% | 1.6528 | 5.2104 | -68.3% |
Table 10: Condensed Interim Consolidated Statement of Cash Flows for the Three-months and Six-months ended June 30, 2020 and 2019 | ||||||||
(amounts expressed in millions of pesos, unless otherwise noted) | ||||||||
Three-months ended
| Six-months ended
| |||||||
2020 | 2019 | 2020 | 2019 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net profit for the period | 111 | 1,570 | 1,038 | 3,238 | ||||
Adjustments to reconcile net profit to net cash provided by operating activities | ||||||||
Income tax expense | (123) | 775 | 237 | 1,093 | ||||
Depreciation and amortization | 914 | 728 | 1,780 | 1,697 | ||||
Provisions | (66) | 79 | (9) | 105 | ||||
Interest expense | 565 | (172) | 970 | 278 | ||||
Exchange rate differences | 305 | (349) | 293 | (281) | ||||
Others | - | 16 | - | 4 | ||||
Gain on disposal of Property, plant and equipment | 9 | (0) | 15 | (0) | ||||
Changes in operating assets and liabilities | ||||||||
Inventories | 527 | (201) | (424) | (1,076) | ||||
Other receivables | 154 | 67 | (45) | (17) | ||||
Trade accounts receivable | 92 | 142 | 173 | (758) | ||||
Advances from customers | 62 | (45) | 94 | (46) | ||||
Accounts payable | 515 | 82 | (8) | (202) | ||||
Salaries and social security payables | (225) | 24 | (260) | 89 | ||||
Provisions | 34 | (51) | (25) | (119) | ||||
Tax liabilities | 454 | (251) | 163 | (416) | ||||
Other liabilities | (20) | 22 | (29) | 287 | ||||
Income tax paid | (108) | (511) | (325) | (733) | ||||
Gain on net monetary position | (68) | (499) | (198) | (816) | ||||
Net cash generated by operating activities | 3,131 | 1,427 | 3,442 | 2,326 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Proceeds from disposal of Property, plant and equipment | 5 | 2 | 20 | 12 | ||||
Payments to acquire Property, plant and equipment | (1,018) | (3,768) | (5,287) | (6,728) | ||||
Payments to acquire Intangible Assets | (0) | (26) | (3) | (28) | ||||
Contributions to Trust | (0) | (8) | (22) | (33) | ||||
Net cash used in investing activities | (1,013) | (3,800) | (5,292) | (6,777) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from borrowings | 4,648 | 3,971 | 10,551 | 4,358 | ||||
Interest paid | (650) | (578) | (1,507) | (959) | ||||
Repayment of borrowings | (5,061) | (1,417) | (6,585) | (2,030) | ||||
Debts for leases | (25) | (20) | (57) | (47) | ||||
Net cash generated (used) in by financing activities | (1,088) | 1,955 | 2,401 | 1,323 | ||||
Net increase (decrease) in cash and cash equivalents | 1,031 | (419) | 551 | (3,129) | ||||
Cash and cash equivalents at the beginning of the period | 2,352 | 2,394 | 2,916 | 5,071 | ||||
Effect of the re-expression in homogeneous cash currency ("Inflation-Adjusted") | (19) | (54) | (62) | (92) | ||||
Effects of the exchange rate differences on cash and cash equivalents in foreign currency | 19 | (252) | (22) | (181) | ||||
Cash and cash equivalents at the end of the period | 3,383 | 1,670 | 3,383 | 1,670 |
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 June 30, | Six-months ended June 30, | |||||||||||||||
2020 | % | 2019 | % | 2020 | % | 2019 | % | |||||||||
Net revenue | 7,334 | 100.0% | 7,262 | 100.0% | 14,857 | 100.0% | 14,395 | 100.0% | ||||||||
Cement, masonry cement and lime—Argentina | 5,844 | 79.7% | 5,453 | 75.1% | 11,632 | 78.3% | 10,625 | 73.8% | ||||||||
Cement—Paraguay | 952 | 13.0% | 641 | 8.8% | 1,867 | 12.6% | 1,343 | 9.3% | ||||||||
Concrete | 109 | 1.5% | 1,014 | 14.0% | 577 | 3.9% | 2,200 | 15.3% | ||||||||
Railroad | 655 | 8.9% | 708 | 9.8% | 1,397 | 9.4% | 1,365 | 9.5% | ||||||||
Aggregates | 12 | 0.2% | 134 | 1.8% | 74 | 0.5% | 259 | 1.8% | ||||||||
Others | 37 | 0.5% | 35 | 0.5% | 85 | 0.6% | 66 | 0.5% | ||||||||
Eliminations | (276) | -3.8% | (721) | -9.9% | (775) | -5.2% | (1,463) | -10.2% | ||||||||
Cost of sales | 5,015 | 100.0% | 5,151 | 100.0% | 9,821 | 100.0% | 9,936 | 100.0% | ||||||||
Cement, masonry cement and lime—Argentina | 3,735 | 74.5% | 3,658 | 71.0% | 7,031 | 71.6% | 6,909 | 69.5% | ||||||||
Cement—Paraguay | 680 | 13.6% | 466 | 9.0% | 1,316 | 13.4% | 937 | 9.4% | ||||||||
Concrete | 205 | 4.1% | 981 | 19.0% | 729 | 7.4% | 2,043 | 20.6% | ||||||||
Railroad | 609 | 12.1% | 607 | 11.8% | 1,348 | 13.7% | 1,193 | 12.0% | ||||||||
Aggregates | 38 | 0.7% | 140 | 2.7% | 116 | 1.2% | 276 | 2.8% | ||||||||
Others | 24 | 0.5% | 23 | 0.4% | 55 | 0.6% | 41 | 0.4% | ||||||||
Eliminations | (276) | -5.5% | (721) | -14.0% | (775) | -7.9% | (1,463) | -14.7% | ||||||||
Selling, admin. expenses and other gains & losses | 584 | 100.0% | 497 | 100.0% | 1,104 | 100.0% | 1,068 | 100.0% | ||||||||
Cement, masonry cement and lime—Argentina | 473 | 80.9% | 379 | 76.2% | 919 | 83.2% | 834 | 78.1% | ||||||||
Cement—Paraguay | 25 | 4.3% | 15 | 3.1% | 57 | 5.2% | 38 | 3.6% | ||||||||
Concrete | 12 | 2.0% | 34 | 6.9% | 8 | 0.7% | 69 | 6.5% | ||||||||
Railroad | 60 | 10.2% | 53 | 10.7% | 90 | 8.2% | 98 | 9.2% | ||||||||
Aggregates | (0) | 0.0% | 2 | 0.3% | (4) | -0.3% | 4 | 0.3% | ||||||||
Others | 15 | 2.6% | 13 | 2.7% | 33 | 3.0% | 25 | 2.3% | ||||||||
Depreciation and amortization | 398 | 100.0% | 343 | 100.0% | 791 | 100.0% | 685 | 100.0% | ||||||||
Cement, masonry cement and lime—Argentina | 158 | 39.8% | 174 | 50.6% | 332 | 42.0% | 353 | 51.5% | ||||||||
Cement—Paraguay | 157 | 39.5% | 106 | 30.8% | 296 | 37.5% | 211 | 30.8% | ||||||||
Concrete | 17 | 4.3% | 16 | 4.7% | 34 | 4.3% | 27 | 3.9% | ||||||||
Railroad | 59 | 14.8% | 42 | 12.3% | 115 | 14.6% | 84 | 12.2% | ||||||||
Aggregates | 5 | 1.3% | 5 | 1.4% | 11 | 1.4% | 9 | 1.3% | ||||||||
Others | 1 | 0.3% | 1 | 0.2% | 2 | 0.3% | 2 | 0.2% | ||||||||
Adjusted EBITDA | 2,133 | 100.0% | 1,958 | 100.0% | 4,724 | 100.0% | 4,076 | 100.0% | ||||||||
Cement, masonry cement and lime—Argentina | 1,795 | 84.1% | 1,590 | 81.2% | 4,014 | 85.0% | 3,234 | 79.3% | ||||||||
Cement—Paraguay | 404 | 18.9% | 265 | 13.5% | 790 | 16.7% | 579 | 14.2% | ||||||||
Concrete | (90) | -4.2% | 16 | 0.8% | (126) | -2.7% | 114 | 2.8% | ||||||||
Railroad | 45 | 2.1% | 90 | 4.6% | 74 | 1.6% | 157 | 3.8% | ||||||||
Aggregates | (20) | -1.0% | (3) | -0.2% | (28) | -0.6% | (11) | -0.3% | ||||||||
Others | (1) | 0.0% | (1) | 0.0% | (1) | 0.0% | 3 | 0.1% | ||||||||
Reconciling items: | ||||||||||||||||
Effect by translation in homogeneous cash currency ("Inflation-Adjusted") | (56) | 796 | 95 | 2,017 | ||||||||||||
Depreciation and amortization | (914) | (728) | (1,780) | (1,697) | ||||||||||||
Tax on debits and credits banks accounts | (69) | (58) | (177) | (231) | ||||||||||||
Finance costs, net | (1,106) | 377 | (1,587) | 166 | ||||||||||||
Income tax | 123 | (775) | (237) | (1,093) | ||||||||||||
NET (LOSS) PROFIT FOR THE PERIOD | 111 | 1,570 | 1,038 | 3,238 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200810005772/en/
Contacts:
Marcos I. Gradin, Chief Financial Officer and Investor Relations
Gastón Pinnel, Investor Relations Manager
+54-11-4319-3050
investorrelations@lomanegra.com