Displaying items by tag: Loma Negra
Loma Negra’s fortunes on the rise
10 August 2018Argentina: Loma Negra has announced its results for the three and six-month periods that ended on 30 June 2018. Its net revenue rose by 37.2% year-on-year to US$202m, mainly driven by growth in its core cement, masonry and lime businesses in Argentina. Argentine cement, masonry and lime net revenues rose by 33.4%, despite relatively flat sales volumes.
Consolidated adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 26.9% year-on-year to US$49m, mainly driven by the 36.6% increase in adjusted EBITDA from Argentina. Cement, masonry and lime sales in Argentina came to US$42m.
Commenting on the financial and operating performance for the second quarter of 2018, Sergio Fairman, Loma Negra’s Chief Executive Officer, said, "Our core business, cement in Argentina, continued to deliver a solid performance, posting both revenue growth and EBITDA margin expansion despite the current challenging macroeconomic environment in the country. This was achieved despite relatively flat volumes year-on-year, as we continue with our strategy of balancing profitability and market position. Sustained growth in concrete volume demand, by contrast, was supported by ongoing implementation of public infrastructure projects in our key markets."
"Looking ahead, we remain cautiously optimistic with the cement demand outlook in Argentina. Despite the potential impact of an adverse macro environment in the second half of the year and, given current market conditions, we believe the industry could reach similar record volumes (to those) achieved last year."
Argentina: The National Commission for Protection of Competition (CNDC) has hastened an investigation into alleged collusion and coordinated behaviour in the cement industry. Cement prices increased by 13% in May 2018, according to La Nacion newspaper. So far in 2018 the price of cement has risen by 23% and the cement companies say that further price rises are expected in June 2018.
The local industry has blamed rising input prices of up to 50% due to local currency devaluation but the Argentine Peso has only fallen by 30% so far in 2018. The companies under investigation include Loma Negra, LafargeHolcim, Petroquimica Comodoro Rivadavia and others.
Loma Negra’s sales jump on strong local market
09 March 2018Argentina: Loma Negra’s sales and earnings have increased due to a strong market recovery in its domestic market. Its sales revenue rose by 54.8% year-on-year to US$752m in 2017 from US$486m in 2016. Its adjusted earnings before, interest, taxation, depreciation and amortisation (EBITDA) rose by 67.7% to US$194m from US$116m. Its cement and lime sales rose by 18.6% to 6.99Mt from 5.89Mt. The cement producer also benefited from an increased equity share of Paraguay’s Yguazú Cementos during the year.
“2017 was a pivotal year for Loma Negra marked by achieving significant milestones. Key events for the company last year included: volume and sales expansion benefitting from the economic momentum in Argentina, record EBITDA, commenced expansion of the L’Amalí plant and ending the year with the successful Initial Public Offering (IPO) – the largest Argentine IPO in almost 25 years and the largest ever for a cement company,” said Sergio Faifman, Loma Negra’s Chief Executive Officer.
Loma Negra to study using two trailer trucks
24 January 2018Argentina: Loma Negra is considering using two trailer trucks or b-trains. The study follows a government relaxation concerning their usage in January 2018, according to the El Cronista newspaper. The cement producer is looking at using the longer trucks for both input materials and cement shipments. Due to a strong market locally most of the company’s 5.5Mt/yr cement production capacity is sold domestically.
President inaugurates wind farm supporting Loma Negra
04 January 2018Argentina: President Mauricio Macri has inaugurated a 24MW expansion to the Parque Eólico Rawson wind farm that will supply Loma Negra. Energy company Genneia has invested around US$40m on the project, according to Renewables Now news service. The unit has a 20 year contract to supply electricity to the cement producer. The renewable power purchase agreement between private companies is a first for the country.
Loma Negra to build new line at L'Amalí plant
14 December 2017Argentina: Loma Negra plans to spend US$350m on building a new 2.7Mt/yr production line at its Amalí plant in Olavarria. Production on the new line is scheduled to start in early 2020. Once operational it is expected to create 220 new jobs. The new line will include a new kiln, two new two vertical mill for raw and cement grinding and a bagging and palletising unit.
Update on Argentina
15 November 2017Forget the news stories about poor markets in Colombia and Brazil. Argentina is riding a construction boom right now. Local producer Loma Negra recently ran an initial public offering and it picked a good time to do it. It aimed to generate up to US$800m from the flotation and in the end it raised over US$1bn. Good news for its Brazilian owner InterCement no doubt, which was last reported as aiming to sell a 32% stake in the company in order to cover its debts. More cheer must have followed from Loma Negra’s third quarter results this week. Its cement sales volumes rose by 9% in the latest quarter to 1.72Mt due to expanding local construction activity.
Graph 1: Cement production and consumption in Argentina Q1 – 3, 2008 – 2017. Source: Asociación de Fabricantes de Cemento Portland (AFCP).
As Graph 1 shows its experience mirrors the wider industry. Cement production rose by almost the same rate for the industry as whole, by 10% year-on-year to 3.19Mt for the quarter, according to Asociación de Fabricantes de Cemento Portland (AFCP) data. For the nine months as a whole production has also risen by 9% to 8.7Mt. This figure is the third highest in the last decade since 2008. Production peaked in 2015 before dropping a major 10Mt following a subdued construction industry in the wake of devaluation of the Argentinean Peso in late 2015 and early 2016. At the time LafargeHolcim, the operator of Holcim Argentina, also blamed the negative influence of neighbouring Brazil’s own financial woes. The economy has bounced back giving the country’s its highest nine month cement consumption figure, 8.8Mt, in the last decade.
Earlier in the year LafargeHolcim said it was importing 0.25Mt of cement into Argentina between May 2017 and April 2018 because it couldn’t meet local demand from its own plants. Given the over-abundance of clinker in the world one might be forgiven for being sceptical about this claim. Bolivia’s Itacamba announced it was also exporting cement to Argentina this week. However, the other point to note from the graph is that consumption has been about 90,500t higher than production so far in 2017. This is an envious position for local producers to be in. One more striking feature that sticks out from the graph above is the undulating curve than both production and consumption has. The Argentinean economy has been through the ringer in recent years and this shows in the ups and downs of the figures.
From the perspective of the three major domestic producers, Loma Negra’s sales revenue rose by 53.9% year-on-year to US$620m in the first nine months of 2017. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by a whopping 73% to US$157m. Cementos Avellaneda, owned by Spain Cementos Mollins and Brazil’s Votorantim, reported similar good news with its overall results boosted by the Argentine market. Its sales revenue in the country rose by 28.3% to Euro130m and its EBITDA rose by 59.5% to Euro32.4m. Although Mollins did make the point that inflation had been particular problem in Argentina, although its impact had been ‘greatly’ outweighed by price rises. LafargeHolcim has had its problems globally so far in 2017 but Argentina hasn’t been one of them. Its operations in the country have been propping up the group’s Latin American results each quarter so far in 2017. Despite being one of its smaller regions by sales revenues, its sales and earnings delivered some of the group’s highest growth in the third quarter of 2017.
In this kind of environment new production capacity can’t be far away. Sure enough Cementos Avellaneda plans to increases the capacity of its San Luís cement grinding plant by 0.7Mt to 1Mt/yr by the second quarter of 2019. US$200m has been earmarked for the project.
So, great news for Argentina and proof that poor markets can turn around. The Brazilian cement association SNIC reckoned in October 2017 that the rate decline of cement sales was slowing, suggesting that the bottom of the downturn was in sight. On the evidence of the current situation in Argentina once the market does revive, South America will be the place to watch.
Loma Negra to launch initial public offering
01 November 2017Argentina/US: Loma Negra has set the price of its initial public offering on the New York Stock Exchange. It plans to raise about US$954m from the sale. Most of the proceeds will go to InterCement Brasil, Brazil’s second-largest cement producer, which owns 99% of Loma Negra, according to Reuters. The rest will go to Loma Negra.
Founded in 1926, Loma Negra is vertically integrated cement and concrete company based in Argentina. It also owns a 51% stake in a cement plant in Paraguay.
Loma Negra aims to raise US$800m in initial public offering
16 October 2017Argentina/US: Loma Negra aims to generate up to US$800m in an initial public offering in Argentina and the US. Around US$700m of the money raised will go to its parent company Brazil’s InterCement, according to Reuters. InterCement is selling a 32% stake in the company to pay its debts. Subsequently it will hold a 57% stake in the Argentine cement producer. No schedule for the transaction has been disclosed.
Loma Negra signs renewable energy deal with Genneia
05 October 2017Argentina: Loma Negra has signed a deal to buy renewable energy from local power company Genneia for a 20-year period starting in January 2018. The agreement will include energy generated by the Parque Eólico Rawson wind farm that is scheduled to complete a 24MW expansion in December 2017.