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 nine-month period ended
September 30, 2020 (our “3Q20”).
3Q20 Key Highlights
- Net revenue decreased by 4.5% YoY to Ps.10,756 million (US$143
million), with robust rebound in our core segment, but negatively
impacted by other segments
- Consolidated Adjusted EBITDA up 11.6% YoY to Ps.3,389 million
(US$48 million)
- Consolidated Adjusted EBITDA margin expanded by 454 basis
points YoY from 27.0% to 31.5%, driven by higher cement, masonry
and lime sales and strong focus on cost control
- Net profit was Ps.6,449 million including the divestment in
Paraguay
- Income from discontinued operations in Paraguay was Ps.4,204
million for the three-months period
- Railway segment impacted by of Ps.1,068 million, due to
non-cash losses an impairment of property, plant and equipment and
other non-recurrent losses
- Net Debt /LTM Adjusted EBITDA ratio of 0.12x from 1.17x in 2Q20
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
third quarter of 2020, Sergio Faifman, Loma Negra’s Chief Executive
Officer, noted: “We feel very satisfied with the robust
position with which we concluded this third quarter. We have
improved our operational results with margins expansion, in the
back of a continuing sales volume improvement coupled with
effective cost and price management.
Additionally, we executed seamlessly the sale of our Paraguayan
operation, an excellent deal in terms of value generation and
timing. We optimized the proceeds from the transaction, creating
value for our shareholders at the time we strengthen our already
robust financial situation.
In the quarter, cement demand in Argentina continues to operate
at two-speeds. On one side, Bag segment has confirmed the strong
recovery path, 18% year-over-year, mostly explained by household
and retail demand. By contrast, Bulk segment, as well as Concrete
and Aggregates, are still affected by the very low levels of larger
private and public works which execution is still hampered by
lockdowns and its effects.
L’Amalí expansion project, a key element of our long-term
strategy, is on track. Certainly, the COVID-19 pandemic is still a
source of uncertainty, and may provoke additional delays to the
startup of the new production line, which is expected to be at the
beginning of 2021.
Once again, I would like to thank all our people, and
stakeholders, without whom these above mentioned results would have
been very difficult, particularly during this unprecedented times.
Let´s keep moving forward, with the same responsibility and
resourcefulness we have shown to overcome any challenge and to
grasp every opportunity on our way.”
Table 1: Financial
Highlights
(amounts expressed in millions of
pesos, unless otherwise noted)
Three-months ended
September 30,
Nine-months ended
September 30,
2020
2019
% Chg.
2020
2019
% Chg.
Net revenue
10,756
11,260
-4.5%
25,475
33,012
-22.8%
Gross Profit
3,010
2,898
3.9%
7,008
8,771
-20.1%
Gross Profit margin
28.0%
25.7%
+225bps
27.5%
26.6%
+94bps
Adjusted EBITDA
3,389
3,037
11.6%
7,682
8,626
-10.9%
Adjusted EBITDA Mg.
31.5%
27.0%
+454bps
30.2%
26.1%
+403bps
Net Profit
6,449
83
7715.7%
7,567
3,569
112.0%
Net Profit attributable to owners
of the Company
6,436
68
9356.1%
7,496
3,411
119.7%
EPS
10.7977
0.1142
9356.1%
12.5770
5.7234
119.7%
Shares outstanding at eop
596
596
0.0%
596
596
0.0%
Net Debt
1,454
12,380
-88.3%
1,454
12,380
-88.3%
Net Debt /LTM Adjusted EBITDA
0.12x
1.05x
-0.93x
0.12x
1.05x
-0.93x
Table 1b: Financial Highlights
in Ps and in U.S. dollars (figures exclude the impact of IAS
29)
In million Ps.
Three-months ended
September 30,
Nine-months ended
September 30,
2020
2019
% Chg.
2020
2019
% Chg.
Net revenue
10,487
7,830
33.9%
23,477
20,881
12.4%
Adjusted EBITDA
3,511
2,213
58.6%
7,445
5,710
30.4%
Adjusted EBITDA Mg.
33.5%
28.3%
+521bps
31.7%
27.3%
+436bps
Net Profit
8,258
(448)
n/a
9,039
1,405
543.2%
Net Debt
1,454
12,380
-88.3%
1,454
12,380
-88.3%
Net Debt /LTM Adjusted EBITDA
0.12x
1.05x
-0.93x
0.12x
1.05x
-0.93x
In million US$
Three-months ended
September 30,
Nine-months ended
September 30,
2020
2019
% Chg.
2020
2019
% Chg.
Ps./US$, av
73.35
50.59
45.0%
67.62
44.60
51.6%
Ps./US$, eop
76.18
57.56
32.3%
76.18
57.56
32.3%
Net revenue
143
155
-7.6%
347
468
-25.8%
Adjusted EBITDA
48
44
9.4%
110
128
-14.0%
Adjusted EBITDA Mg.
33.5%
28.3%
+521bps
31.7%
27.3%
+436bps
Net Profit
113
(9)
n/a
134
32
324.2%
Net Debt
19
215
-91.1%
19
215
-91.1%
Net Debt /LTM Adjusted EBITDA
0.12x
1.05x
-0.93x
0.12x
1.05x
-0.93x
Overview of Operations
Sales Volumes
Table 2: Sales
Volumes2
Three-months ended
September 30,
Nine-months ended
September 30,
2020
2019
% Chg.
2020
2019
% Chg.
Cement, masonry & lime
MM Tn
1.53
1.49
2.9%
3.54
4.19
-15.5%
Concrete
MM m3
0.06
0.19
-70.2%
0.15
0.67
-77.4%
Railroad
MM Tn
1.06
1.13
-5.8%
2.63
3.36
-21.7%
Aggregates
MM Tn
0.19
0.26
-25.2%
0.35
0.85
-59.0%
2 Sales volumes include
inter-segment sales
Sales volumes of cement, masonry and lime in Argentina during
3Q20 increased 2.9% to 1.53 million tons reflecting a sustained
recovery for bagged cement, mostly explained by a stronger
household and retail demand. Conversely, bulk segment is still
heavily impacted by the slow execution of larger private and public
construction works, in part hampered by COVID-19 lockdowns and also
due to economic restrictions.
In this line, sales volumes in the Concrete and Aggregates
segments plummeted 70.2% and 25.2% YoY, to 0.06 million m3 and 0.19
million tons, respectively, as they were also heavily affected by
the lock-down and economic uncertainty impacting major private and
public projects.
Railroad segment volumes experienced a 5.8% decline versus the
comparable quarter in 2019, mainly explained by the volume drop of
frac-sand and building materials.
Review of Financial Results
Table 3: Condensed Interim
Consolidated Statements of Profit or Loss and Other Comprehensive
Income
(amounts expressed in millions of
pesos, unless otherwise noted)
Three-months ended
September 30,
Nine-months ended
September 30,
2020
2019
% Chg.
2020
2019
% Chg.
Net revenue
10,756
11,260
-4.5%
25,475
33,012
-22.8%
Cost of sales
(7,746)
(8,362)
-7.4%
(18,467)
(24,241)
-23.8%
Gross Profit
3,010
2,898
3.9%
7,008
8,771
-20.1%
Share of loss of associates
(363)
-
n/a
(363)
-
n/a
Selling and administrative
expenses
(828)
(791)
4.6%
(2,165)
(2,527)
-14.3%
Other gains and losses
6
40
-86.1%
58
17
238.8%
Impairment of property, plant and
equipment
(851)
-
n/a
(851)
-
n/a
Tax on debits and credits to bank
accounts
(133)
(123)
8.1%
(323)
(372)
-13.1%
Finance costs, net
Gain on net monetary position
107
376
-71.6%
320
1,255
-74.5%
Exchange rate differences
2,054
(2,064)
n/a
1,245
(1,891)
n/a
Financial income
218
104
108.9%
67
119
-43.7%
Financial expenses
(377)
(463)
-18.4%
(1,229)
(1,171)
4.9%
(Loss) Profit before
taxes
2,843
(22)
n/a
3,767
4,202
-10.4%
Income tax expense
Current
(965)
205
n/a
(1,175)
(855)
37.4%
Deferred
367
(363)
n/a
369
(443)
n/a
Net profit (loss) from
continuing operations
2,245
(180)
n/a
2,960
2,903
2.0%
Income from discontinued
operations
4,204
262
1502.5%
4,607
665
592.5%
Net profit (loss)
6,449
83
7715.7%
7,567
3,569
112.0%
Net Revenues
Net revenue decreased 4.5% to Ps. 10,756 million in 3Q20,
from Ps. 11,260 million in the comparable quarter last year,
reflecting the impact of the COVID-19 lockdown and the negative
economic momentum in segments other than our core cement business
which was up 5.3%.
Our cement revenues experienced an increase of 5.3%, on the back
of volumes expansion of 2.9%, with robust rebound in Bag and
favorable pricing.
Railroad revenues decreased 29.8% YoY versus the comparable
quarter in 2019, as the lower frac-sand and building materials
demand affected both volumes and pricing mix.
Concrete plummeted 75.5%, with both sales volumes and prices
declining when compared to the 2Q in the year ago period.
Aggregates declined by 24.4%, as pricing performance partially
compensated the 25.2% volume decline.
Cost of sales, and Gross profit
Cost of sales decreased 7.4% YoY reaching Ps.7,746
million in 3Q20 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 increased 3.9% YoY to Ps.3,010 million in
3Q20 from Ps.2,898 million in 3Q19, with gross profit margin
expanding 225 basis points YoY to 28.0%, reflecting the recovery in
cement sales volumes coupled with good cost and pricing
performance.
Selling and Administrative Expenses
Selling and administrative expenses (SG&A) in 3Q20
increased 4.6% YoY to Ps.828 million, from Ps.791 million in 3Q19.
As a percentage of revenues, SG&A increased 67 basis points to
7.7% in 3Q20, from 7.0% in 3Q19 mainly as a consequence of higher
percentage of bagged cement sales on total sales.
Adjusted EBITDA & Margin
Table 4: Adjusted EBITDA
Reconciliation & Margin
(amounts expressed in millions of
pesos, unless otherwise noted)
Three-months ended
September 30,
Nine-months ended
September 30,
2020
2019
% Chg.
2020
2019
% Chg.
Adjusted EBITDA
reconciliation:
Net profit
6,449
83
7715.7%
7,567
3,569
112.0%
(+) Depreciation and
amortization
1,201
890
34.9%
2,782
2,365
17.7%
(+) Tax on debits and credits to
bank accounts
133
123
8.1%
323
372
-13.1%
(+) Income tax expense
598
158
278.6%
806
1,298
-37.9%
(+) Financial interest, net
(9)
289
n/a
804
881
-8.7%
(+) Exchange rate differences,
net
(2,054)
2,064
n/a
(1,245)
1,891
n/a
(+) Other financial expenses,
net
168
70
141.8%
358
171
109.5%
(+) Gain on net monetary
position
(107)
(376)
-71.6%
(320)
(1,255)
-74.5%
(+) Share of loss of
associates
363
-
n/a
363
-
n/a
(+) Impairment of property, plant
and equipment
851
-
n/a
851
-
n/a
(-) Income from discontinued
operations
4,204
262
1502.5%
4,607
665
592.5%
Adjusted EBITDA
3,389
3,037
11.6%
7,682
8,626
-10.9%
Adjusted EBITDA Margin
31.5%
27.0%
+454bps
30.2%
26.1%
+403bps
Adjusted EBITDA increased 11.6% YoY in the second quarter
of 2020 to Ps. 3,389 million, mostly explained by bagged cement.
Adjusted EBITDA margin expanded by 454 basis points to 31.5%
compared to 27.0% in 3Q19, also on the back of cement margins
expansion.
In particular, Cement, masonry cement and lime segment Adjusted
EBITDA margin expanded by 472 bps to 34.3%, mainly due to improved
energy inputs and lighter fixed cost structure, and further
supported by the increase in revenues.
Railroad Adjusted EBITDA margin deteriorated to 6.3%, impacted
by lower volumes and pricing mix, and costs declining less than
proportional.
Finally, Concrete and Aggregates were heavily impacted by low
level of construction works execution, therefore Adjusted EBITDA
margin at -16.6% and -31.9%, respectively.
Finance Costs-Net
Table 5: Finance Costs,
net
(amounts expressed in millions of
pesos, unless otherwise noted)
Three-months ended
September 30,
Nine-months ended
September 30,
2020
2019
% Chg.
2020
2019
% Chg.
Exchange rate differences
2,054
(2,064)
n/a
1,245
(1,891)
n/a
Financial income
218
104
108.9%
67
119
-43.7%
Financial expenses
(377)
(463)
-18.4%
(1,229)
(1,171)
4.9%
Gain on net monetary position
107
376
-71.6%
320
1,255
-74.5%
Total Finance Costs,
Net
2,001
(2,046)
n/a
403
(1,688)
n/a
During 3Q20, the Company reported a gain of Ps.2,001 million in
total finance costs-net compared to a loss of Ps. 2,046 million in
the previous year third quarter, mainly due to a gain in foreign
exchange differences. Net Financial expense decreased by Ps.199
million to Ps.160 million resulting from a lower financial debt
position.
Net Profit and Net Profit Attributable to Owners of the
Company
Net Profit for 3Q20 stood at Ps.6,449 million, which
includes Ps.4,204 million of income from discontinued operations in
Paraguay, reflecting the sale of our 51% stake in Yguazú Cementos
S.A.
Net profit from continuing operations, increased by Ps.2,425
million, mostly explained by a gain in foreign exchange differences
and Adjusted EBITDA growth. Additionally, due to a change in
business perspectives for our Railway and Aggregate segments, a
non-cash impairment loss of Ps.851 million was recorded. Moreover,
net profit was also affected by a Ps. 363 million share loss in
associates related to a cash contribution done in Ferrosur Roca, in
order to preserve the stake of minority interest.
Net Profit Attributable to Owners of the Company
increased by Ps. 6,368 million YoY, to Ps.6,436 million in 3Q20.
During the quarter, the Company reported earnings per common share
of Ps.10.7977 and earnings per ADR of Ps.53.9886, compared with
earnings per common share of Ps.0.1142 and earnings per ADR of
Ps.0.5709 in 3Q19.
Capitalization
Table 6: Capitalization and
Debt Ratio
(amounts expressed in millions of
pesos, unless otherwise noted)
As of September 30,
As of
December, 31
2020
2019
2019
Total Debt
6,105
14,229
11,262
- Short-Term Debt
3,932
6,819
6,262
- Long-Term Debt
2,173
7,411
5,001
Cash and Cash Equivalents
4,652
1,849
1,595
Total Net Debt
1,454
12,380
9,667
Shareholders' Equity
38,115
34,948
35,864
Capitalization
44,221
49,177
47,127
LTM Adjusted EBITDA
11,992
11,785
11,640
Net Debt /LTM Adjusted EBITDA
0.12x
1.05x
0.83x
As of September 30, 2020, total cash and cash equivalents were
Ps.4,652 million compared with Ps.1,595 million as of the December
31, 2019. Total debt at the close of the quarter stood at Ps.6,105
million, composed by Ps.3,932 million in short-term borrowings,
including the current portion of long-term borrowings (or 64% of
total borrowings), and Ps.2,173 million in long-term borrowings (or
36% of total borrowings).
As of September 30, 2020, 84% (or Ps.5,119 million) Loma Negra’s
total debt was denominated in U.S. dollars, and 16% (or Ps.987
million) in Euros. The average duration of Loma Negra’s total debt
was 0.8 years.
As of September 30, 2020, Ps.5,119 million, or 84%, of the
Company’s total consolidated borrowings bore interest at rates
based on Libor, and Ps.987 million of borrowings bore interest at a
fixed rate.
The Net Debt to Adjusted EBITDA (LTM) ratio decreased to 0.12x
as of September 30, 2020 from 1.17x as of June 30,2020 as a result
of the proceeds from the sale our 51% stake in Yguazú Cementos S.A.
and the additional cash generated from our continuing operations
together with the use of funds in investing activities.
Cash Flows
Table 7: Condensed Interim
Consolidated Statement of Cash Flows for the Three-months and
Nine-months ended September 30, 2020 and 2019
(amounts expressed in millions of
pesos, unless otherwise noted)
Three-months ended
September 30,
Nine-months
ended
September 30,
2020
2019
2020
2019
CASH FLOWS FROM OPERATING
ACTIVITIES
Net profit (loss) from
continuing operations
2,245
(180)
2,960
2,903
Income from discontinued
operations
4,204
262
4,607
665
Net profit
6,449
83
7,567
3,569
Adjustments to reconcile net
profit to net cash provided by operating activities
(3,964)
2,350
(1,139)
5,058
Changes in operating assets and
liabilities
852
1,501
204
(2,595)
Net cash generated by / used in
by operating activities
3,337
3,933
6,632
6,032
CASH FLOWS FROM INVESTING
ACTIVITIES
Property, plant and equipment,
Intangible Assets, net
(1,563)
(4,232)
(7,167)
(11,472)
Contributions to Trust
(26)
(26)
(50)
(62)
Proceeds from disposal of Yguazú
Cementos S.A.
7,495
-
7,495
-
Net cash generated by / used in
investing activities
5,906
(4,258)
278
(11,534)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds / Repayments from
borrowings, Interest paid
(9,994)
101
(6,578)
2,185
Net cash generated by / used in
by financing activities
(9,994)
101
(6,578)
2,185
Net increase (decrease) in
cash and cash equivalents
(750)
(223)
332
(3,317)
Cash and cash equivalents at the
beginning of the year
2,628
1,087
1,595
4,385
Effect of the re-expression in
homogeneous cash currency ("Inflation-Adjusted")
(33)
(51)
(100)
(149)
Effects of the exchange rate
differences on cash and cash equivalents in foreign currency
2,806
18
2,825
(88)
Cash and cash equivalents at
the end of the period
4,652
831
4,652
831
In the 3Q20, our cash flow generated by operating activities was
Ps.3,337 million compared to Ps.3,933 million in 3Q19 as higher
working capital needs more than offset the Adjusted EBITDA growth.
During 3Q20, the Company made capital expenditures for a total of
Ps.1,563 million, mostly allocated to the expansion of production
capacity of L’Amalí plant. Additionally, a total of Ps.7,495
million funds were received related to the disposal of Yguazú
Cementos S.A.
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.
As of the end of the quarter, all detailed engineering is
completed, all equipment and materials supplies has been delivered
to site, and commissioning and start-up has been completed at
crushing department and new primary crusher is fully
operational.
Civil and electromechanical works present a progress of
approximately 90%. The works to be completed are electromechanical
erection works at kiln, cement mill and dispatch areas.
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 expected to be at the beginning
of 2021.
Sale of Paraguayan company Yguazú Cementos S.A.
On August 21, 2020, Loma Negra C.I.A.S.A. (the “Company”) sold
its total stake in the Paraguayan company Yguazú Cementos S.A.
(“Yguazú”), which represented 51.0017% of the capital stock of
Yguazú. The sale was made to the local shareholder of Yguazú.
The goal of the Company is to seek and execute high potential
projects, for this reason, after having started marketing
operations in Paraguay in 2000, built and operated the factory
since 2013, and currently reaching high standards of production and
profitability, it was decided to sell it.
The Company considers that the economic result of Ps.4,204
million obtained by this operation was very beneficial for Loma
Negra and is in line with maximizing value for its shareholders.
The sale price was US$107 million, the use of proceeds was mainly
applied to repay existing debt and for the distribution of an
extraordinary dividend.
Recent Events
Dividend distribution
Taking into account the extraordinary income as a result of the
sale of the Company's stake in the Paraguayan company Yguazú
Cementos SA, and other factors, including the current flow of
funds, the current financial situation of the Company, the high
degree of progress of the current project to expand the L'Amalí
cement plant, and the investment plans projected by the Company in
the short and medium term, the board of directors decided about the
convenience of a cash dividend distribution.
With this considerations, on August 28, 2020, the board of
directors called for an Ordinary General Shareholders´ Meeting. In
this regard, during the ordinary shareholders‘ meeting held on
September 30, 2020 it was approved the payment of dividends for a
total amount of Ps. 2,400 million equivalent to Ps. 4.027 per
outstanding share (Ps.20.133 per ADS) and the allocation of all the
funds in the Reserve for Future Dividends and part of the funds in
the Optional Reserve to the payment of the dividends. As of the
date of this Earnings release presentation, the full amount of
dividends was distributed.
3Q20 Earnings Conference Call
When:
10:00 a.m. U.S. ET (12:00 a.m. BAT),
November 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/loma201111X8vSYMy7.html
Replay:
A telephone replay of the conference call
will be available between November 11, 2020 at 1:00 pm U.S. E.T.
and ending on November 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 10149478. 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, plus share of loss of associates, plus net Impairment of
Property, plant and equipment, and less income from discontinued
operation. 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. 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 September 30, 2020 and
December 31, 2019
(amounts expressed in millions of pesos,
unless otherwise noted)
As of
September 30,
As of
December 31,
2020
2019
ASSETS
Non-current assets
Property, plant and equipment
47,524
48,303
Right to use assets
424
499
Intangible assets
114
154
Investments
3
5,409
Goodwill
31
31
Inventories
1,962
1,831
Other receivables
426
687
Total non-current assets
50,483
56,914
Current assets
Inventories
4,980
5,922
Other receivables
1,130
687
Trade accounts receivable
2,665
2,903
Investments
4,383
1,247
Cash and banks
269
348
Total current assets
13,427
11,107
TOTAL ASSETS
63,910
68,021
SHAREHOLDERS' EQUITY
Capital stock and other capital related
accounts
13,518
13,518
Reserves
16,815
14,520
Retained earnings
7,496
4,695
Accumulated other comprehensive income
-
404
Equity attributable to the owners of the
Company
37,829
33,136
Non-controlling interests
287
2,728
TOTAL SHAREHOLDERS' EQUITY
38,115
35,864
LIABILITIES
Non-current liabilities
Borrowings
2,173
5,001
Accounts payables
90
170
Provisions
718
682
Debts for leases
375
416
Other liabilities
50
63
Deferred tax liabilities
6,278
6,647
Total non-current
liabilities
9,684
12,978
Current liabilities
Borrowings
3,932
6,262
Accounts payable
5,848
10,681
Advances from customers
558
233
Salaries and social security
payables
979
1,148
Tax liabilities
2,178
628
Debts for leases
126
125
Other liabilities
2,491
102
Total current liabilities
16,111
19,178
TOTAL LIABILITIES
25,795
32,156
TOTAL SHAREHOLDERS' EQUITY AND
LIABILITIES
63,910
68,021
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
September 30,
Nine-months ended
September 30,
2020
2019
% Change
2020
2019
% Change
Net revenue
10,756
11,260
-4.5%
25,475
33,012
-22.8%
Cost of sales
(7,746)
(8,362)
-7.4%
(18,467)
(24,241)
-23.8%
Gross profit
3,010
2,898
3.9%
7,008
8,771
-20.1%
Share of loss of associates
(363)
-
n/a
(363)
-
n/a
Selling and administrative expenses
(828)
(791)
4.6%
(2,165)
(2,527)
-14.3%
Other gains and losses
6
40
-86.1%
58
17
238.8%
Impairment of property, plant and
equipment
(851)
-
n/a
(851)
-
n/a
Tax on debits and credits to bank
accounts
(133)
(123)
8.1%
(323)
(372)
-13.1%
Finance costs, net
Gain on net monetary position
107
376
-71.6%
320
1,255
-74.5%
Exchange rate differences
2,054
(2,064)
n/a
1,245
(1,891)
n/a
Financial income
218
104
108.9%
67
119
-43.7%
Financial expenses
(377)
(463)
-18.4%
(1,229)
(1,171)
4.9%
Profit (Loss) before taxes
2,843
(22)
n/a
3,767
4,202
-10.4%
Income tax expense
Current
(965)
205
n/a
(1,175)
(855)
37.4%
Deferred
367
(363)
n/a
369
(443)
n/a
Net profit (loss) from continuing
operations
2,245
(180)
n/a
2,960
2,903
2.0%
Income from discontinued operations
4,204
262
1502.5%
4,607
665
592.5%
Net profit
6,449
83
7715.7%
7,567
3,569
112.0%
Other Comprehensive Income
Items to be reclassified through profit
and loss:
Exchange differences on translating
foreign operations
(159)
669
n/a
(257)
239
n/a
Total other comprehensive (loss)
income
(159)
669
n/a
(257)
239
n/a
TOTAL COMPREHENSIVE INCOME
6,290
752
736.6%
7,310
3,808
92.0%
Net Profit (loss) for the period
attributable to:
Owners of the Company
6,436
68
9356.1%
7,496
3,411
119.7%
Non-controlling interests
14
14
-6.3%
71
157
-54.9%
NET PROFIT FOR THE PERIOD
6,449
83
7715.7%
7,567
3,569
112.0%
Total comprehensive (loss) income
attributable to:
Owners of the Company
6,354
409
1452.0%
7,365
3,533
108.4%
Non-controlling interests
(64)
342
n/a
(55)
275
n/a
TOTAL COMPREHENSIVE INCOME
6,290
752
736.6%
7,310
3,808
92.0%
Earnings per share (basic and
diluted):
10.7977
0.1142
9356.0%
12.5770
5.7234
119.7%
Table 10: Condensed Interim
Consolidated Statement of Cash Flows for the Three-months and
Nine-months ended September 30, 2020 and 2019
(amounts expressed in millions of
pesos, unless otherwise noted)
Three-months ended
September 30,
Nine-months ended
September 30,
2020
2019
2020
2019
CASH FLOWS FROM OPERATING
ACTIVITIES
Net profit (loss) from
continuing operations
2,245
(180)
2,960
2,903
Income from discontinued
operations
4,204
262
4,607
665
Net profit
6,449
83
7,567
3,569
Adjustments to reconcile net
profit to net cash provided by operating activities
Income tax expense
1,960
225
2,169
1,365
Depreciation and amortization
1,201
890
2,782
2,365
Provisions
(28)
(1)
(38)
112
Interest expense
16
347
935
827
Exchange rate differences
(2,694)
1,427
(2,378)
1,134
Share of loss of associates
568
(527)
363
(732)
Gain on disposal of property,
plant and equipment
22
(12)
39
(12)
Gain on disposal of shareholding
of Yguazú Cementos S.A.
(5,970)
-
(5,970)
-
Impairment of property, plant and
equipment
851
-
851
-
Depreciation value of trust
108
-
108
-
Changes in operating assets and
liabilities
Inventories
984
823
677
(205)
Other receivables
155
(177)
76
(163)
Trade accounts receivable
(549)
(91)
(227)
(782)
Advances from customers
241
7
342
(42)
Accounts payable
585
1,189
607
935
Salaries and social security
payables
292
120
6
212
Provisions
(11)
52
(37)
(76)
Tax liabilities
(276)
793
(104)
330
Other liabilities
7
11
(23)
82
Gain on net monetary position
(107)
(376)
(320)
(1,255)
Income tax paid
(469)
(848)
(794)
(1,631)
Net cash generated by / used in
by operating activities
3,337
3,933
6,632
6,032
CASH FLOWS FROM INVESTING
ACTIVITIES
Proceeds from disposal of Yguazú
Cementos S.A.
7,495
-
7,495
-
Proceeds from disposal of
Property, plant and equipment
14
30
36
43
Payments to acquire Property,
plant and equipment
(1,576)
(4,255)
(7,199)
(11,480)
Payments to acquire Intangible
Assets
(1)
(7)
(4)
(36)
Contributions to Trust
(26)
(26)
(50)
(62)
Net cash generated by / used in
investing activities
5,906
(4,258)
278
(11,534)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from borrowings
0
3,395
11,359
8,087
Interest paid
(1,069)
(855)
(2,541)
(1,691)
Debts for leases
(36)
(56)
(98)
(88)
Repayment of borrowings
(8,888)
(2,384)
(15,298)
(4,123)
Net cash generated by / used in
by financing activities
(9,994)
101
(6,578)
2,185
Net increase (decrease) in cash
and cash equivalents
(750)
(223)
332
(3,317)
Cash and cash equivalents at the
beginning of the period
2,628
1,087
1,595
4,385
Effect of the re-expression in
homogeneous cash currency ("Inflation-Adjusted")
(33)
(51)
(100)
(149)
Effects of the exchange rate
differences on cash and cash equivalents in foreign currency
2,806
18
2,825
(88)
Cash and cash equivalents at
the end of the period
4,652
831
4,652
831
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
September 30,
Nine-months ended
September 30,
2020
%
2019
%
2020
%
2019
%
Net revenue
10,487
100.0%
7,830
100.0%
23,477
100.0%
20,881
100.0%
Cement, masonry cement and
lime
9,801
93.5%
6,638
84.8%
21,433
91.3%
17,263
82.7%
Concrete
340
3.2%
987
12.6%
917
3.9%
3,187
15.3%
Railroad
770
7.3%
783
10.0%
2,167
9.2%
2,147
10.3%
Aggregates
128
1.2%
120
1.5%
202
0.9%
379
1.8%
Others
29
0.3%
44
0.6%
114
0.5%
110
0.5%
Eliminations
(581)
-5.5%
(742)
-9.5%
(1,356)
-5.8%
(2,205)
-10.6%
Cost of sales
6,688
100.0%
5,361
100.0%
15,192
100.0%
14,359
100.0%
Cement, masonry cement and
lime
5,799
86.7%
4,340
81.0%
12,831
84.5%
11,249
78.3%
Concrete
531
7.9%
936
17.5%
1,260
8.3%
2,979
20.7%
Railroad
753
11.3%
676
12.6%
2,101
13.8%
1,869
13.0%
Aggregates
162
2.4%
120
2.2%
278
1.8%
396
2.8%
Others
24
0.4%
31
0.6%
78
0.5%
72
0.5%
Eliminations
(581)
-8.7%
(742)
-13.8%
(1,356)
-8.9%
(2,205)
-15.4%
Selling, admin. expenses and
other gains & losses
728
100.0%
513
100.0%
1,774
100.0%
1,543
100.0%
Cement, masonry cement and
lime
687
94.4%
435
84.9%
1,606
90.5%
1,269
82.3%
Concrete
(8)
-1.0%
21
4.2%
1
0.0%
91
5.9%
Railroad
30
4.1%
41
8.0%
120
6.8%
139
9.0%
Aggregates
1
0.2%
(0)
0.0%
(2)
-0.1%
3
0.2%
Others
17
2.3%
15
3.0%
50
2.8%
40
2.6%
Depreciation and
amortization
440
100.0%
257
100.0%
935
100.0%
732
100.0%
Cement, masonry cement and
lime
237
53.9%
185
72.0%
570
61.0%
538
73.6%
Concrete
134
30.4%
18
7.1%
168
17.9%
45
6.2%
Railroad
62
14.1%
48
18.6%
178
19.0%
132
18.0%
Aggregates
6
1.3%
5
1.9%
16
1.7%
14
1.9%
Others
1
0.2%
1
0.4%
3
0.4%
2
0.3%
Adjusted EBITDA
3,511
100.0%
2,213
100.0%
7,445
100.0%
5,710
100.0%
Cement, masonry cement and
lime
3,552
101.2%
2,048
92.5%
7,566
101.6%
5,283
92.5%
Concrete
(50)
-1.4%
48
2.2%
(176)
-2.4%
162
2.8%
Railroad
49
1.4%
114
5.1%
123
1.7%
270
4.7%
Aggregates
(30)
-0.8%
5
0.2%
(57)
-0.8%
(6)
-0.1%
Others
(10)
-0.3%
(1)
-0.1%
(11)
-0.1%
1
0.0%
Reconciling items:
Effect by translation in
homogeneous cash currency ("Inflation-Adjusted")
(122)
823
237
2,916
Depreciation and amortization
(1,201)
(890)
(2,782)
(2,365)
Tax on debits and credits banks
accounts
(133)
(123)
(323)
(372)
Finance costs, net
2,001
(2,046)
403
(1,688)
Income tax
(598)
(158)
(806)
(1,298)
Share of profit of associates
(363)
-
(363)
-
Impairment of property, plant and
equipment
(851)
-
(851)
-
Income from discontinued
operations
4,204
262
4,607
665
NET (LOSS) PROFIT FOR THE
PERIOD
6,449
83
7,567
3,569
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201110006189/en/
IR Contacts
Marcos I. Gradin, Chief Financial Officer and Investor
Relations
Gastón Pinnel, Investor Relations Manager
+54-11-4319-3050 investorrelations@lomanegra.com
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