Loma Negra Reports 2Q20 Results

·22-min read

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
June 30,

Six-months ended
June 30,

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
June 30,

Six-months ended
June 30,

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
June 30,

Six-months ended
June 30,

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
June 30,

Six-months ended
June 30,

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
June 30,

Six-months ended
June 30,

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
June 30,

Six-months ended
June 30,

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
June 30,

Six-months ended
June 30,

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
June 30,

As of
December, 31

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
ended
March 31,

Six-months
ended
March 31,

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
June 30,

Six-months ended
June 30,

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
June 30,

Six-months ended
June 30,

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

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