Loma Negra (LOMA) Q3 2026 Earnings Call Transcript

DATE

Friday, Nov. 6, 2026

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

• Revenue -- Ps. 170 billion, representing a 3.2% year-over-year decline primarily driven by weaker performance in the concrete, cement, and railroad segments.
• Adjusted EBITDA -- Ps. 54.2 billion, decreasing 6.7% year over year due to soft activity and seasonal cost pressures.
• Adjusted EBITDA Margin -- 20.1%, contracting 74 basis points year over year as other business segments weighed on overall results.
• Cement Volume -- 6.3% decline year over year, reflecting subdued activity levels and heavy winter rainfall in July and August.
• EBITDA per Ton -- $32.5, increasing 24% year over year and highlighting strong cash generation.
• Net Debt -- $145 million, representing a $40 million reduction compared to the second quarter of the year.
• Net Debt to Adjusted EBITDA Ratio -- 1x, improving from 1.39 at the end of the prior year third quarter.
• Bulk Cement Performance -- 2% growth year over year, outperforming the total industry dispatch decline of 3.9%.
• Bagged Cement Performance -- 8% decline year over year, reflecting ongoing pressure from the general consumption environment.
• Concrete Revenue -- 23.2% decrease year over year, driven by a 24.9% decline in sales volume from lower public works and industrial project activity.
• Railroad Revenue -- 2.2% decline year over year, as a 7% reduction in transported volumes of grain and aggregates offset favorable pricing.
• Aggregates Revenue -- 3.7% increase year over year, as strong pricing and improved sales mix compensated for a 16.1% contraction in volumes.
• Cost of Sales -- 3% decrease year over year, reflecting lower costs in cement and concrete partially offset by higher railroad maintenance and payroll costs.
• SG&A Expenses -- 16.1% increase year over year, primarily due to higher advertising, promotional spending, and IT services.
• Net Income -- Ps. 15.2 billion, compared with a net loss in the same period of the prior year.
• Cash Flow from Operations -- Ps. 86.3 billion, more than doubling year over year due to favorable working capital dynamics and lower inventory.
• CapEx -- Ps. 18.1 billion, compared with Ps. 19.5 billion in the third quarter of 2025.
• Corporate Bond Issuance -- $150 million, completed on Oct. 22 at a 6.3% interest rate to refinance upcoming debt maturities.
• Cement Segment EBITDA Margin -- 24.9%, expanding 67 basis points year over year due to favorable pricing dynamics.
• Railroad Segment EBITDA Margin -- negative 11%, compared to positive 3.4% in the prior year due to increased maintenance and service costs.
• Concrete Segment EBITDA Margin -- negative 4.6%, representing an improvement from negative 6.8% in the third quarter of 2025.
• Debt Composition -- 91% of total debt was denominated in U.S. dollars as of the end of the quarter.

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RISKS

• Faifman stated, "Industry volume remained subdued during the third quarter. As July and August were affected by still soft activity levels and heavy winter rainfall," noting the impact of external environmental factors.
• Gradin reported that "the concrete segment narrowed its gross loss compared with the third quarter of 2025 although it still remain in negative territory," indicating ongoing segment-level challenges.
• Gradin noted, "In contrast, the railroad segment adjusted EBITDA margin turns negative... mainly driven by the higher cost of sales," citing maintenance and labor cost pressures.

SUMMARY

Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA) reported a decline in consolidated revenue attributed to subdued economic activity and adverse weather conditions. The company saw improved profitability in its core cement segment and strengthened its financial position by reducing net debt and successfully issuing a local corporate bond after the quarter end. Management reported that while volume remained soft in July and August, a strong rebound in September suggests underlying demand reacts quickly to supportive weather conditions. The company is actively participating in multiple tenders under the RIGI regime to secure long-term volumes through energy, mining, and infrastructure projects.

• Management reported that industry cement dispatches in September grew 4.5% year over year and 18% sequentially following a period of heavy rainfall.
• CEO Faifman stated, "LOMA is going to be participating in the project of a plant of urea," as part of the company's focus on large-scale investments.
• The company is currently participating in seven significant tenders, many of which have project durations ranging from 24 to 30 months.
• CFO Gradin noted that favorable working capital dynamics, including lower inventory levels and improved trade receivables, drove a significant increase in operational cash flow.
• Management stated that while bulk cement demand is more resilient, the recovery of the bagged cement segment depends on the evolution of real wages and the return of credit.
• CEO Faifman noted that total volume impact is derived from the sum of multiple infrastructure projects because individual projects typically do not carry significant weight in total dispatches.

INDUSTRY GLOSSARY

• RIGI: Regime for Incentives for Large Investments, an Argentine framework designed to attract significant capital projects.
• Bulk Cement: Cement sold without packaging, typically transported in large quantities for heavy infrastructure or industrial concrete production.
• Bagged Cement: Cement packaged in individual units, primarily used by the retail market and for smaller construction projects.
• ISIC: A synthetic indicator of construction activity in Argentina used to track industry trends.
• EMEA: The Estimador Mensual de Actividad Económica, a monthly indicator of general economic activity in Argentina.
• Clinker: A hardened intermediate product produced by heating limestone and clay, serving as the main ingredient in cement production.

Full Conference Call Transcript

Operator: Good day, and welcome to the Loma Negra Third Quarter 26 Conference Call and Webcast. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Also, Mr. Sergio Faifman will be responding in Spanish immediately following an English translation. Please note that this event is being recorded. I would like now 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 on non-GAAP financial measures 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 by discussing the highlights of the quarter. Then Marco will take you through our market review financial results. Following that, I will share some final remarks. Before opening the call to your questions. Starting with Slide 2. Industry volume remained subdued during the third quarter. As July and August were affected by still soft activity levels and heavy winter rainfall. September, however, showered a significant improvement on the back of more favorable weather, which we view as an encouraging sign for the months ahead. In this context, our cement volume decreased 6.3% year over year, consolidated threat revenue declined 3.2%.

To Ps. 170 billion. In terms of profitability, consolidated adjustment, EBITDA reached 54.2 billion down 6.7% year over year, with margin contracting 74 basis point to 20.1%. As our other businesses weather the overall result. Our cement business on the other hand, slightly improving its margin both year over year and sequentially. Despite the third quarter typically being our lowest margin quarter. Due to seasonal cost. In dollar terms, EBITDA per ton stood at $32.5 up 24% year over year. Highlighting the strength of our cash generation even in a still challenging demand environment. We also continued to strengthen our balance sheet As of quarter end, net debt stood at $145 million $40 million lower in the second quarter.

Leaving our net debt to adjusted EBITDA ratio down to 1x. In addition, after the close of the quarter, we saw a new issue and $150 million corporate bond to refinance upcoming structural debt maturity. I will now hand off the call to Marcos, who will review our market and financial results.

Marcos Isabelino Gradin: This is Marcos. Thank you, Sergio. Good day, everyone. Please turn to Slide 4. On the macro front, recent data points to a softer activity trajectory. GDP grew 2% year-over-year in the second quarter, while the EMEA, Argentina's monthly economic activity indicator, declined 1.5% year over year in July and 1.7% in August. Leading community growth at 1.2% through the first 8 months of the year. Market expectation according to the central banks REM survey, points to growth of 1.5% for 2026 and 2.5% for 2027. Construction activity also showed a softer performance during the quarter. The ISIC declined 5.5% year-over-year in July and 4.4% in August. Latest available data.

Although we posted a 0.4% sequential improvement in August, on a seasonally adjusted basis. Drilling indicators were broadly flat. Registered private sector employment in construction declined 0.3% year over year in July and building permits authorized in the same month were also down 0.3% although they remained up 7.5% on a cumulative basis for the first 7 months of the year. Against this backdrop, industry cement dispatches declined 3.9% year over year during the quarter. July and August were both down 8.2% year over year. Affected by still soft activity and heavy rainfall. While September rebounded strongly, growing 4.5% year over year and 18% sequentially, on the back of more favorable weather.

In terms of product mix, bulk cement continues to outperform. Growing 2% year over year while bagged cement declined 8%. Still weighed down by the consumption environment. As a result, although bagged cement still represents a majority of the industry mix, bulk cement continues to gradually gain share. Looking ahead, while the recovery remains uneven, September's performance suggests underlying demand is there and reacts once weather conditions normalize. This, together with RIGI projects beginning to move forward toward the end of the year supports a more positive perspective for the coming months. Turning to Slide 5 for a review of our top line performance by segment. Third quarter consolidated revenues decreased by 3.2% year over year.

The decline was primarily driven by weaker performance in the concrete businesses followed by the cement and railroad segments. While CAGR revenue in aggregates provided a partial offset. Revenues from the segment measured in Cement and Lime segment decreased by 1.8% year over year. Sales volume declined by 6.3% mainly due to the adverse weather condition discussed earlier Our performance relative to the industry was also affected by Missouri Cement sales, which followed the market trends similar to those of bagged cement. Positive pricing dynamics mitigated part of the volume in impact. Performance across these bulk channels remained mixed. With bulk cement supported by more resilient demand while bagged cement continued to underperform.

Concrete revenues decreased 23.2% compared with the third quarter of 25. Reflecting a 24.9% decline in sales volume. This was mainly attributable to a lower contribution from special projects with the demand related to public works and reduced activity in industrial and architectural projects. Better pricing partly cushioned the impact of lower volumes. Railroad revenues decreased by 2.2% year over year in the first quarter of 2026, Favorable pricing dynamics were not sufficient to offset 7% decline in transported volumes. Mainly due to lower shipments of grain, fractions and radicaggregates. This was partially compensated by higher volumes of chemical and chips.

Supported by the resumption of services to Neuquen from the repair of the rail section in Bahia Blanca that had been damaged by late last year's storms. Revenues in the aggregates segment increased by 3.7% year over year. As a strong pricing environment and an improved sales mix more than compensate for a 16.1% contraction in volumes. Volumes were affected by similar factors to those in concrete. Particularly weaker demand from public works and construction companies. Moving on to Slide 7. Consolidated gross profit decreased by 4% year over year. With gross margin barely contracted 14 basis points to 17.2%, mainly reflecting lower net revenues partially mitigated by also lower cost of sales.

Cost of sales decreased by 3% year over year primarily reflecting lower cost in the cement and concrete segments. Partially offset by higher cost of sales in the railroad and aggregate businesses. In the Cement segment, cost of sales increased on a per ton basis suffer a minor increase. Mainly driven by higher depreciation Excluding this effect, unit cost remains broadly in line with last year. The use of clinker produced during the warmer months together with the planned kiln shutdowns help mitigate seasonal energy pressures alongside lower fuel, electricity, packaging, and contractor costs.

In railroad, the increase of cost of sales was mainly related to higher truck maintenance cost, and, to a lesser extent, higher third party services and payroll cost. The concrete segment narrowed its gross loss compared with the third quarter of 2025 although it still remain in negative territory. Finally, SG&A expenses increased by 16.1% year over year mainly driven by higher advertising and promotional spending, as well as consulting and IT services. As a percentage of sales, SG&A reached 11.1%, up 184 basis points compared to the third quarter of 25. Please turn to Slide 8. Consolidated adjusted EBITDA for the quarter reached $42 million up 16.2% year over year while in pesos it stood at 54.2 billion.

Representing a 6.7% decline. The decrease in pesos was primarily driven by weaker performance in the rate of segment and, to a lesser extent, lower contribution from our business partially offset by improved results in cement and concrete. As a result, the consolidated adjusted EBITDA margin contracted by 74 basis points year over year to 20.1%. While remaining broadly stable compared with the previous quarter. In the Cement segment, the adjusted EBITDA margin expanded by 67 basis points year over year to 24.9%, primarily reflecting favorable pricing dynamics. This more than offset the pressure on unit cost from lower volumes which limited the dilution of fixed cost as well as higher SG&A expenses.

In the Corvette segment, adjusted EBITDA margin improved 220 basis points to negative 4.6%. Compared with negative 6.8% in the third quarter of 2025. Supported by better pricing. However, the segment remains in negative territory as current volumes are still too low to adequate cover its cost structure. In contrast, the railroad segment adjusted EBITDA margin turns negative. Reaching negative 11% in the third quarter. Compared with positive 3.4% in the same period of 2025. Mainly driven by the higher cost of sales in the previous slide, partially offset by lower SG&A expenses. The aggregate segments also recorded margin contraction. With its adjusted EBITDA margin declining to 19.4% from negative 16.7% in the same period last year.

A stronger pricing environment partially mitigated the impact of lower volumes. While higher cost continues to weigh on the cement's profitability. Moving to the bottom line on Slide 10, Net income attributable to owners of the company amounted to 15.2 billion in the quarter. Compared with a net loss of COP11.3 billion in the third quarter 2025. The improvement was primarily attributable to a net financial gain in the quarter compared with a financial loss in third quarter 2025. Despite weaker operating performance. This improvement was partially offset by higher income tax expenses as the company recorded a net tax expense in third quarter 2026. Compared with a net tax benefit in the same period of the previous year.

On the financial side, the company recorded a net financial gain of 8.5 billion pesos in the quarter compared to a net financial loss of $383 billion dollars in the same period of 2025. This year over year improvement mainly reflects a more moderate pace of peso depreciation as well as lower net financial expenses which declined to Ps. 7.9 billion from Ps. 23.3 billion in the third quarter of 2025 primarily due to lower financial expenses. Moving on to the balance sheet. As you can see on Slide 11, We ended the quarter with net debt of 220 billion pesos, and our net debt-to-adjusted EBITDA ratio of 1x.

A significant improvement from 1.39 times a year ago and 1.47 at the end of 2025. Cash flow from operation activities totaled 86.3 billion pesos in the quarter, more than doubling the 42.6 billion generated in the third quarter of 2025. This year over year improvement was mainly driven by a favorable working capital dynamics, reflecting an improvement in trade and other receivables, together with lower inventory levels and higher tax payables. Regarding investment activities, the company used 18.8 billion pesos with CapEx totaling 18.1 billion. Compared to 19.5 billion the same quarter of last year.

On the financial side, the company used 25 billion pesos during the quarter, mainly related to loan repayments compared to a net cash generated in the third quarter of 2025 when the company issued its class 5 corporate bonds. In US dollar terms, net debt stood at $145 million with an average debt maturity of 1.2 years. As of quarter end, 91% of the total debt was denominated to US dollars while the remaining balance in pesos. As Sergio mentioned, after the close of the quarter on October 22, we issued Class 7 corporate bond in the local market for $150 million with a 30-month fixed tenure and a 6.25% interest rate.

Transaction was very well received by the market, and we would like to thank all investors who have in each of our issuances, continue to place their trust in the company. Proceeds will be used mainly to refinance upcoming structured debt maturities, extending the average maturity of our debt, and further strengthening our debt profile. 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, I please ask you to turn to Slide 13. As a volume continued to come in below our expectation. Still heavily affected by a particularly rainy winter. September showed that demand responds quickly when weather condition are supportive. Which we see a positive sign as we look ahead. At the same time, many of the large scale project linked to the awaiting approval until recently where only news. Are now becoming a reality, with several of them already guiding underway even before year end. We expect their contribution to demand to gradually build as months go by.

Bagged segment and TAM remains a segment where the outlook remain less clear. whose recovery depend more closely on the evolution of the real economy. Real wages and the return of credit. In this context, LOMA Negra remain focused on maintaining healthy pricing dynamics and strict cost discipline in order to preserve profitability. Finally, I would like to highlight the successful debt placement complete in October. Which strengthened our financial position and reaffirm investor confidence in our company. This is the end of our prepared remarks. We are now ready to take questions. Operator, please open the call for questions.

Operator: Thank you. We will now conduct a question and answer session. If you. You may press *(2) if you would like to remove your line. For participants using speaker equipment, it may be necessary to pick up your handset. We also would like to ask that you please limit 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. Our first question comes from Marina Mertens of Latin Securities. Please go ahead.

Analyst: Hi, LOMA team. Thank you for taking my question. it is regarding volumes and what are the main drivers you see for 2027 that were not present in 2026? Thank you.

Sergio Damian Faifman: Hi, Marina. Thank you for your question. The truth is that we have seen is a change in the weather conditions that impacted severely during 2026. And when you see an improvement like in September, the weather was better, the volumes start to pick up. In October, again, with some rain, volumes are, again, below. But when we see days with good climate, the difference is between 15%, 20% with these days with these rainy days. And what we are seeing looking forward are some projects that we are participating in tenders. Linked to the RIGI regime. Yes. So this, for example, we communicated that LOMA is going to be participating in the project of a plant of urea.

And we are also participating in some other tenders and projects that should boost volumes looking forward to 2027. The sum of these 2 factors and also coupled with a recovery of the economy. We are optimistic. optimistic about the outlook for next year. Thank you. Sorry, you mentioned the project with Pampa. How much that represents in terms of dispatches for LOMA? Individually, there is no project that has a significant weight in terms of cement dispatches. it is more the sum of these projects that will impact our volumes. But punctually, this project is around 300 thousand cubic meters of concrete.

Operator: Thank you. Our next question comes from Daniel Vielman of Citi. Please go ahead.

Daniel Vielman: Hi, good morning everyone. Thanks for the presentation. And the opportunity to ask question. Maybe a follow-up from the RIGI evidence on your value. If you could share some color around how it is looking like for I do not know, 1 year ago, And if you see any names of the projects, kind of mentioned it that are boosting demand, but how much it could drive demand in 2027 Also, if you could share some outlook on pricing and margins for the 4Q 26 Thank you, Sergio.

Sergio Damian Faifman: Hi, Daniel. Thank you for your question. We do not have exact figures in terms of tons and volumes. Regarding the Rigi for 2027. What can I say is that we are participating in 7 tenders? That are significant projects. Many of those have periods of 24, 30 months. And there are also projects linked with mining. That we are seeing if they start. The Probably these mining projects are a little bit backlog due to the political atmosphere. But we are waiting to see the follow-up of that. All the projects linked to oil and gas are advancing at a more accelerated pace. In terms of pricing, as you have seen, we are consolidating our strategy on pricing.

And we are seeing, looking forward, to consolidate this strategy and path. With similar levels of prices And on the other hand, always looking for opportunities regarding fixed costs and variable cost to improve our profitability.

Operator: And this concludes our question and answer session. I would like to turn the conference back to Diego Jalón for closing remarks.

Diego Jalón: Thank you very much, to you all for joining us this morning. We look forward to meeting you again in our next call for the upcoming quarter. And obviously, if you have any other question, you can reach the IR team. You very much.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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