Loma Negra (LOMA) Q2 2026 Earnings Call Transcript Motley Fool Transcribing, The Motley FoolFri, August 14, 2026 at 5:45 AM UTC 0 Image source: The Motley Fool. Friday, Aug. 7, 2026 at 12:00 p.m. ET CALL PARTICIPANTS Head of IR Diego Jalón Chief Executive Officer and Vice Chairman of the Board of Directors Sergio Damian Faifman Chief Financial Officer Marcos Isabelino Gradin TAKEAWAYS Consolidated Net Revenue Ps. 238.1 billion, representing a 2.1% increase year over year driven by positive pricing dynamics across primary segments. Cement Sales Volume 1.
Loma Negra (LOMA) Q2 2026 Earnings Call Transcript
Motley Fool Transcribing, The Motley FoolFri, August 14, 2026 at 5:45 AM UTC
0
Image source: The Motley Fool.
Friday, Aug. 7, 2026 at 12:00 p.m. ET
CALL PARTICIPANTS -
Head of IR - Diego Jalón
Chief Executive Officer and Vice Chairman of the Board of Directors - Sergio Damian Faifman
Chief Financial Officer - Marcos Isabelino Gradin
TAKEAWAYS -
Consolidated Net Revenue -- Ps. 238.1 billion, representing a 2.1% increase year over year driven by positive pricing dynamics across primary segments.
Cement Sales Volume -- 1.4% decrease year over year, primarily due to heavy rains in April impacting construction activity in urban centers.
Consolidated Adjusted EBITDA -- Ps. 48.2 billion, a 2.5% decline year over year reflecting margin compression from higher costs and depreciation.
Adjusted EBITDA Margin -- 20.2%, representing a 97 basis point contraction year over year.
EBITDA Per Tonne -- $32.10, a 14% increase year over year in U.S. dollar terms.
Net Profit -- Ps. 7.5 billion, compared to Ps. 0.5 billion in the second quarter of 2025, primarily due to lower financial expenses and foreign exchange losses.
Net Debt -- $185 million, or Ps. 274 billion, with 87% of total debt denominated in U.S. dollars.
Net Debt to Adjusted EBITDA Ratio -- 1.3x, a decrease from 1.47x at the end of 2025.
Cement Segment Revenue -- 2.2% increase year over year, as favorable pricing offset a slight volume decline.
Railroad Segment Revenue -- 8.6% increase year over year, driven by a 10.1% rise in transported volumes of grain, cement, and frac sand.
Concrete Segment Revenue -- 11.2% decrease year over year, reflecting an 18.6% decline in volumes following the completion of large-scale infrastructure projects.
Aggregates Segment Revenue -- 10.3% decrease year over year, due to a 12.2% decline in volumes impacted by weaker demand for public works.
Gross Margin -- 19.2%, a decrease of 122 basis points year over year reflecting higher depreciation and maintenance costs.
SG&A Expenses -- 12.1% of sales, an increase of 132 basis points year over year driven by higher salary expenses.
Operating Cash Flow -- Ps. 18.1 billion, compared to an outflow of Ps. 29.7 billion in the prior year quarter, aided by lower income tax payments.
Capital Expenditures -- Ps. 9.7 billion, showing a decrease following the completion of the 25-kilogram bagging project.
Debt Cancellation -- $10 million, representing the full repayment of Class 4 corporate bonds in May 2026.
Railroad Adjusted EBITDA Margin -- -5.2%, declining from 9.8% in the prior year period due to higher fuel and labor costs.
Industry-wide Cement Dispatches -- 5% decrease year over year, with the company outperforming the broader market.
Bagging Project Investment -- more than $5 million, for new dispatching lines and infrastructure to comply with labor regulations.
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RISKS -
CFO Gradin warned that bagged cement remains "under pressure" as demand for "self construction and refurbishing projects remain delayed," particularly in the retail segment.
CEO Faifman stated that the recovery path is "unlikely to be a straight line" and the company "may continue to see some volatility including potential short term decline."
Gradin noted that the ISAAC declined 2.8% year over year in April, "weighed down by the same heavy rains that affected our cement volumes."
Management reported that performance at Loma Negra Compañía Industrial Argentina Sociedad Anónima(NYSE:LOMA) in the second quarter was impacted by weather-related delays in April and a gradual recovery in domestic demand. The company maintained positive pricing dynamics across its Cement, Concrete, and Aggregates segments while experiencing volume declines in segments linked to public works and retail construction. Strategic focus remained on operational efficiency, including seasonal kiln shutdowns to manage energy costs and the completion of the 25-kilogram bagging infrastructure. Management indicated that future growth is expected to be supported by large-scale projects under new investment regimes and potential improvements in real wages.
CEO Faifman noted that the second quarter performance "was mainly affected by a weak April, impacted by heavy rains," before volumes began to normalize in May and June.
CFO Gradin explained that the transition to 25-kilogram bags was a regulatory requirement "to improve the conditions of the workers need to handle these heavy bags."
Management stated that most kilns were shut down in May to limit exposure to higher energy costs during the winter months.
Loma Negra celebrated its 100th anniversary on Aug. 5, 2026.
The company expects to restart kilns in September under new energy contracts that management described as having better terms than the previous production cycle.
Volume growth in the Railroad segment was supported by the resumption of operations in Bahía Blanca following repairs to a rail section damaged by a storm in 2025.
CEO Faifman attributed potential volume support in the second half of the year to "project approval under the RIGI regime starting to move forward."
INDUSTRY GLOSSARY -
EMEA: Estimador Mensual de Actividad Económica, Argentina's monthly economic activity indicator.
ISAAC: Indicador Sintético de la Actividad de la Construcción, a synthetic indicator of construction activity in Argentina.
RIGI: Régimen de Incentivo para Grandes Inversiones, an incentive regime for large investments in Argentina.
Frac Sand: High-purity quartz sand used in the hydraulic fracturing process to produce petroleum fluids.
Bulk Cement: Cement transported and sold in large quantities without packaging, typically for industrial and infrastructure use.
Bagged Cement: Cement sold in individual sacks, typically for retail customers and small-scale construction.
Full Conference Call Transcript
Operator: Good day, and welcome to the Loma Negra Second Quarter 26 Conference Call and Webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. Also, Mr. Sergio Faifman will be responding in Spanish immediately following an English translation. To ask a question, you may press star. Please note that this event is being recorded. I would now like to turn the conference over to Mr. Diego Jalón, Head of IR. Please, Diego, go ahead.
Diego Jalón: Thank you. Good day, and welcome to Loma Negra's earnings conference call. By now, everyone should have access to our earnings press release and the presentation for today's call. Both of which were distributed yesterday after market close. Joining me on the call today are Sergio Damian Faifman, our CEO and Vice Chairman of the Board of Directors and Marcos Isabelino Gradin, our CFO. Sergio and Marcos will be available for the Q&A session. Before we proceed, I would like to make the following safe harbor statements. Today's call will contain forward-looking statements and I refer you to the forward-looking statements section of our earnings release and recent filing with the SEC.
We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. This conference call will also include discussion of non-GAAP financial measures. The full reconciliation to the corresponding financial measures is included in the earnings press release. Now I would like to turn the call over to Sergio.
Sergio Damian Faifman: Thank you, Diego. Hello, everyone, and thank you for showing us today. I would like to start my presentation discussing the highlights of the quarter. Then Marcos will take you through our market review and financial results. Following that, I will share some final remarks before opening the call for your questions. Starting with Slide 2. As we move through the second quarter, volumes have not yet fully guiding the momentum we were expecting. Performance during the quarter was mainly affected by a weak April, impacted by heavy rains. While May and June trends more in line with the level registered a year ago. Cement volume decreased 1.4% year-over-year. While consolidating net revenue increased 2.1%, reaching pesos 238.1 billion.
In terms of quarterly performance, margin in pesos showed some compression. Mainly reflecting higher cost and depreciation. While our top line continued to show positive trends. Even as volume remained lagging. Consolidated adjustment EBITDA reached Ps. 48.2 billion, down 2.5% year over year. With margin contracting 97 basis point to 20.2%. Dollar terms, however, EBITDA generation per tonne stood $32.10, up 14% year over year. Underscoring the resilience of our operation even as demand recovery remains gradual. During the quarter, we can sell our Class 4 corporate bonds for a total of $10 million We have no remaining structured debt maturity for the rest of the year.
As of quarter end, net debt stood at $185 million, representing a net debt to LMT adjustment EBITDA ratio of 1.3x. I will now hand off the call to Marcos, who will walk you through our market review and financial result. Please, Marcos. Go ahead.
Marcos Isabelino Gradin: Thank you, Sergio. Good day, everyone. Please turn to slide 4. The most recent economic data shows a more moderate growth trajectory in the second quarter. The EMEA, Argentina's monthly economic activity indicator grew 1.6% year-over-year in April. Before slowing to 0.2% in May with a monthly decline of 0.5% versus April. On a cumulative basis, the indicator is up 1.7% year-over-year through the first 5 months of the year. Although the pace of growth has clearly moderated comparably to earlier in the year. Construction activity has shown a similar mixed trend. The Isaac declined 2.8% year-over-year in April, weighed down by the same heavy rains that affected our cement volumes before rebounding 0.1% year-over-year in May.
Lead indicators remain constructive. Registered private sector employment in construction grew 1.2% year-over-year in April, and building permits authorized in the same month expanded by 17% year-over-year with a 7.6% year-on-year decrease on a cumulative basis on the first 4 months of the year. Within this context, industry segment dispatches declined 5% year-over-year during the quarter. Mainly reflected the impact of heavy rains in April across the country's main urban centers Our own volumes follow a similar trend but a more moderate decline. Down 1.4% year over year outperform the industry as May and June trends normalized closer to last year levels. In terms of product mix, bulk cement continued to outperform.
Supported by larger scale projects while back segment which represents the majority of the industry mix, remained relatively weak. Consistent with more cautious behavior in the retail and small contractor segment. Looking ahead, we expect a continued and even recovery path we have been describing. Rather than a change in the underlying demand trend. That said, we remain cautiously optimistic going forward as we believe this recovery path remains intact. Turning to slide 5 for a review of our top line performance by segment. Second quarter revenues increased by 2.1% year-over-year with growth led by the cement business followed by the Railroad segment partially offset by lower revenues in the Concrete and Aggregate segments.
The Cement segment revenues increased by 2.2% year-over-year. Volume decreased by 1.4%. Bulk dispatches continue to outperform supported by higher activities from concrete producers industrial clients, and construction companies. Bagged cement remained under pressure. with the retail segment showing the weakest performance. As demand for self construction and refurbishing projects remain delayed. Pricing dynamics remain positive, supporting the segment top line performance. Concrete revenues decreased by 11.2% year-over-year, as an 18.6% decline in volumes was solely partially offset by favorable pricing dynamics. Volumes were mainly affected by lower demand from special projects particularly those linked to port infrastructure and wind farms. Which are now in their final stages of completion.
Start of new projects have been gradually pushed back though we expect them to break ground in the near terms. Volumes in Rosario remain more stable supported by a combination of fabric and private works. Aggregates revenues decreased by 10.3% year-over-year. As a 12.2 decline in volumes was solely partially offset by favorable pricing dynamics. Volumes were mainly affected by the same dynamics impacting the concrete segment. Particular weaker demand for public works and construction companies. Railroad revenues increased by 8.6% year-over-year as hydro transported volumes up 10.1% were partially offset by softer pricing conditions. Volume growth was mainly driven by higher transportation of grain, cement and frac sand.
Later reflection reflecting the resumption of operations following the repair of the rail section in Bahía Blanca that have been affected by last year's storm. Moving on to slide 7. Consolidated gross profit decreased by 3.9% year-over-year, with gross margin contracting 122 basis points to 19.2%. Mainly reflecting higher cost and depreciation. Cost of sales increased by 3.7% year-over-year, reflecting higher cost in the cement and railroad segments. Partially offset by lower cost in the Concrete and Aggregate businesses. In the Cement segment, cost of sales increased on a per ton basis. Mainly driven by higher depreciation following the capitalization of the 25-kilogram bagging project after June of last year. Along with higher packaging costs associated with its implementation.
Maintenance and freight cost also rose. The later reflecting the pass through of higher fuel prices. While thermal and electric energy costs remain broadly in line. As planned, where most kilns were shut down in May to avoid operating during the winter months. Helping to limit our exposure to higher energy cost. In railroad, the increase in cost of sales was mainly related to higher transported volumes together with higher salaries, fuel prices, and depreciation. The concrete and aggregate segments both contributed positively to the consolidated results, posting gross margin expansion although they remained in negative territory. Finally, SG&A expenses increased by 15.7% year-over-year.
Mainly driven by higher salary expenses, As a percentage of sales, SG&A stood at 12.1% up 132 basis points compared to the second quarter of 2025. Please turn to slide 8. Consolidated adjusted EBITDA for the quarter stood at $38 million, while in pesos it reached 48.2 billion. Reflecting a 2.5% year-over-year decline. This decrease was mainly driven by a weaker result in the Railroad segment together with, to a lesser extent, a contraction in cement. Partially offset by improved results in concrete and aggregate. As a result, the consolidated EBITDA margin contracted to 20.2%, representing an 87 basis point decrease year-over-year.
In the segment, adjusted EBITDA margin stood at 23.9%, down 81 basis points year-over-year a smaller decline in the consolidated construction. As higher cost of sales and SG&A, as discussed in the previous slide, were partially cushioned by favorable pricing dynamics. The Concrete segment's adjusted EBITDA margin expanded by 867 basis points to -4.3% from -14%. In the second quarter of 2025. Supported by favorable pricing dynamics and lower cost. Although it remained in negative territory. Similarly, the Aggregates segment improved its margin by 877 basis points, reaching -18.6% in the quarter from -27% the same period last year. Also supported by increase in price, and cost control. Although it likewise remains in negative territory.
Finally, in the Railroad segment, adjusted EBITDA margin turned negative. Reaching -5.2% in the second quarter. Compared to a positive 9.8% in the same period of 2025. This was mainly due to higher cost of sales, primarily driven by increased fuel and labor cost while SG&A expenses remained broadly in line. Moving on to the bottom line on Slide 9. Net profit attributable to owners of the company totaled Ps. 7.5 billion for the quarter compared to Ps. 0.5 billion in the second quarter of last year. Improvement was mainly driven by lower financial expenses despite softer operating performance and was partially offset by higher income tax expenses.
On the financial side, the company reported a total net financial loss of Ps. 5.6 billion for the quarter. Compared to a net financial loss of Ps. 22.3 billion in the same period of last year. The year over year improvement was mainly attributable to a lower foreign exchange loss on our US dollar denominated liabilities. As the peso continued to depreciate during the quarter, though at a more moderate pace, than in the second quarter of last year. Additionally, net financial expenses decreased by 27% to Ps. 9.5 billion mainly driven by improved financial income, coupled with lower financial expenses. Moving on to the balance sheet.
As you can see on Slide 11, ended the quarter with net debt of Ps. 274 billion and a net debt to adjusted EBITDA ratio of 1.3x. Down from 1.47x at the end of 2025. Cash flow from operating activities totaled Ps. 18.1 billion in the quarter. Compared to a cash outflow of Ps. 29.7 billion in the second quarter of 2025. This year over year improvement was mainly driven by a significant improvement in working capital, primarily reflecting lower income tax payments during the quarter. Together with a strong increase in tax liabilities. This was partially offset by higher working capital requirements in trade receivables as well as account payables. Regarding investing activities, the company used Ps.
9.9 billion with CapEx totaling Ps. 9.7 billion, remaining lower following the completion of the 25-kilogram bagging project. On the financing side, the company used Ps. 13.2 billion during the quarter, mainly related to the repayments of borrowings. In May 2026, the company completed the cancellation of the class 4 corporate bond for $10 million leaving no remaining structured debt maturities for the rest of the year. In US dollar terms, net debt stood at $185 million with an average duration of 1.4 years. As of quarter end, 87% of our total debt is denominated in dollars with the remaining balance in pesos. Now for our final remarks, I will hand the call back to Sergio.
Sergio Damian Faifman: Thank you. Thank you, Marcos. Now to finalize the presentation, please you to turn to slide 13. Volume during the first half of the year have come in below our initial expectation. Going forward, we may continue to see some volatility including potential short term decline. At the recovery path unlikely to be a straight line. That said, we remain cautiously optimistic that the underlying trend for the second half of the year. And beyond is a positive 1. We are beginning to see some of the project approval under the RIGI regime. Starting to move forward. Beyond that, see additional factor that could further support volume in the second half of the year.
Potential easing of monetary condition expected improvement in real wages and a possible recovery in credit availability. Our top line continued to perform as well during the quarter. And we remain focused on cost discipline. And operational efficiency as we navigate a gradual demand recovery. Finally, on August 5, Loma celebrated its 100th anniversary. An important milestone that fill us with pride. We look forward to continuing to support the country's development over the next 100 years. Just as we have throughout the past century. This is the end of our prepared remarks. We are now ready to take questions. Operator, please open the call for questions.
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Operator: Thank you. We will now conduct a question and answer session. Once again, *1 on your telephone keypad. We also would like to ask that you please limit your questions to 1 question and 1 follow-up please. If you have additional questions, you may re-queue for those questions and they will be addressed. Also, please note that Mr. Sergio Damian Faifman will be responding in Spanish immediately following an English translation. Please hold momentarily while we assemble our roster. The first question is from Marina Mertens with Latin Securities. Please go ahead.
Analyst: Hi, Loma team. Thank you for taking my question. it is regarding the second semester. If credit access remains limit, would the other Good morning, Lucas.
Sergio Damian Faifman: Thank you for your questions. Yes. Actually, we believe that it is difficult to see if we can see a credit improvement in the second half of the year. We do believe there are other factors that should start to impact positively our level of activity. Several of the projects that were presented with the RIGI regime. We are working some of those. We expect them to start to start showing some impact on our volumes in the upcoming months. Additionally, all the road concessions that the government has been granted in the past few months. None of those are already back in our volumes, but they are starting to move forward.
So we are expecting to see some more volumes driven by that in the second half of the year. And always remember that the months starting in September are the strongest months in terms of cement dispatches. Okay. Thank you.
Operator: The next question is from Alejandra Obregon with Morgan Stanley. Please go ahead.
Alejandra Obregon: Hi, good morning. Thank you for taking my question. Mine is on your costs, on your unit costs, actually. So you mentioned in the release and across your remarks that these are up and you are starting to see some pressures on margins. And I was hoping to understand if you can help us break those trends down. So in terms of the cost headwinds which ones do you think are a 1 off or perhaps just seasonally related vis-à-vis those that are recurring? And if you think of perhaps the second half and 2027, what do you think are the levers that could help margins recover from these levels? Thank you.
Marcos Isabelino Gradin: Hi, Alejandra. Thank you for your question. Just to be clear and separate the different costs that are impacting the quarter. As we remarked, some of those that are permanent some of those will remain and some of those are new during the quarter, we saw some increase in freights due to the increasing gas prices and the impact of the winter Additionally, we also have the impact of the 25 kilos bags that we started to dispatch in July last year. Here, we have 2 types of impacts. 1 is related to the bags themselves, all the energy and then the people working on this new dispatching lines.
And on the other side, we have the impact of the depreciation of the investment that we did in the new lines. Also looking forward the impact of the 25-kilo bags was fully translated to an increase in the prices. And additionally, looking forward, starting in September, we are going to start our kilns again, and we have already signed contracts for energy to be used in that period With terms better than the ones that we use in our last production cycle. That is going to have a positive impact on cost. And should I maintain the incremental volume on the second half? That leverage should dilute our fixed cost.
And give us some upside in terms of margin Thank you. That was very clear.
Operator: The next question is from Daniel Rojas with Bank of America. Please go ahead.
Daniel Rojas: Good morning. Thank you for taking my question. I wanted to go back to the 25 kilo bag project. Could you give us details on the implementation on how it has impacted commercial strategy and of course your pricing. You did mention it has been positive and you have been able to push for higher pricing. But just a little bit more color on how it was implemented. Has it been fully implemented? Did it surpass your expectations? Just anything you can give us. Thank you.
Operator: Hi, Daniel, Thank you for your question.
Marcos Isabelino Gradin: First of all, I would like to remark that this change moving from 50 kilo bags to 25-kilo bags was to was due to regulation. This is related to improve the conditions of the workers need to handle these heavy bags. Firstly, the regulation was aiming to supply some sort of mechanical support in order to handle this type of bag. And because that is not feasible the decision was to move from 50- to 25-kilo bags. And given that the cost of 2 bags of 25-kilo bags is higher than 1 50-kilo bag only due to the packaging and the operation necessary. The market is not willing to accept that increased cost.
So you need to change the whole production or the whole distribution to the new bag package. So the regulation demanded that on a specific date, the industry needed to change to this new package. And on the operational needs and on the financial performance, all those investments of more than $5 million. We were able to postdate it a few times, and there was a success.
Operator: And this concludes our question and answer session. I would like to turn the conference back over to Diego Jalón for any closing remarks.
Diego Jalón: Thank you all for joining us today. And we hope to meet you again in our next quarterly call. Thank you very much and have a nice day.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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Loma Negra ( LOMA ) Q2 2026 Earnings Call Transcript Motley Fool Transcribing, The Motley FoolFri, August 14, 2026 at 5:45 AM UTC...
