Market Overview

Loma Negra Reports 2Q18 Results

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Loma Negra (NYSE:LOMA) (BYMA: LOMA), ("Loma Negra" or the
"Company"), the leading cement producer in Argentina, today announced
results for the three and six-month periods ended June 30, 2018.

2Q18 Key Highlights

  • Net revenue up 37.2% YoY to Ps.4,757 million (US$202 million) mainly
    driven by growth in core business Cement, masonry & lime in Argentina
    and Concrete
  • Argentina Cement, masonry & lime net revenues up 33.4% despite
    relatively flat sales volumes
  • Consolidated Adjusted EBITDA rose 26.9% YoY to Ps.1,153 million (US$49
    million), mainly driven by the 36.6% increase in Adjusted EBITDA from
    the Cement, masonry, and lime segment in Argentina to Ps. 982 million
    (US$42 million).
  • Adjusted EBITDA margin of the Cement, masonry, and lime segment in
    Argentina expanded by 65 basis points YoY to 28.0%, while consolidated
    Adjusted EBITDA margin contracted by 197 basis points from 26.2% to
    24.2%.
  • Net Debt /LTM Adjusted EBITDA ratio of 0.83x from 1.44x in 2Q17 and
    0.3x in FY17

Commenting on the financial and operating performance for the
second quarter of 2018, Sergio Faifman, Loma Negra's Chief Executive
Officer, noted:
"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."

"As such, despite the improving margins in our core business, the
consolidated Adjusted EBITDA margin contracted in the period, mainly
reflecting a poor railway performance and strong growth of the lower
margin concrete business."

"Looking ahead, we remain cautiously optimistic with the outlook of
the cement demand 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 achieved last year."

"We also have confidence in the long-term prospects for our business,
supported by our leading market position and strong balance sheet, and
we continue to move ahead and make progress with the expansion of our
L'Amalí plant that will drive profitability gains and provide additional
capacity."

Table 1: Financial Highlights
(amounts expressed in millions of pesos, unless otherwise noted)
   

Three-months ended
June 30,

Six-months ended
June 30,

   

2018

 

2017

 

% Chg.

 

2018

 

2017

 

% Chg.

Net revenue   4,757   3,467   37.2%   9,291   6,669   39.3%
Gross Profit   1,331   1,035   28.5%   2,631   1,978   33.0%
Gross Profit margin   28.0%   29.9%   -189bps   28.3%   29.7%   -133bps
Adjusted EBITDA   1,153   909   26.9%   2,319   1,738   33.4%
Adjusted EBITDA Mg.   24.2%   26.2%   -197bps   25.0%   26.1%   -110bps
Net Profit   178   293   -39.3%   727   692   5.0%
Net Profit attributable to owners of the Company   179   276   -35.0%   706   630   11.9%
EPS   0.3010   0.4878   -38.3%   1.1838   1.1135   6.3%
Shares outstanding at eop1   596   566   5.3%   596   566   5.3%
Net Debt   3,772   4,446   -15.2%   3,772   4,446   -15.2%
Net Debt /LTM Adjusted EBITDA   0.83x   1.44x   -0.61x   0.83x   1.44x   -0.61x
1After IPO total Shares outstanding are 596 million

Table 1b: Financial Highlights in U.S. dollars
(amounts expressed in millions of U.S. dollars, unless otherwise
noted)
   

Three-months ended
June 30,

Six-months ended
June 30,

   

2018

 

2017

 

% Chg.

 

2018

 

2017

 

% Chg.

Ps./US$, av   23.54   15.74   49.5%   21.61   15.71   37.5%
Ps./US$, eop   28.86   16.60   73.9%   28.86   16.60   73.9%
Net revenue   202   220   -8.2%   430   424   1.3%
Adjusted EBITDA   49   58   -15.1%   107   111   -3.0%
Net Profit   8   19   -59.4%   34   44   -23.6%
Net Debt   131   268   -51.2%   131   268   -51.2%
Net Debt /LTM Adjusted EBITDA   0.83x   1.44x   -0.61x   0.83x   1.44x   -0.61x

Overview of Operations

Sales Volumes

Table 2: Sales Volumes2    
             

Three-months ended
June 30,

Six-months ended
June 30,

       

2018

 

2017

 

% Chg.

     

2018

 

2017

 

% Chg.

Cement, masonry & lime
Argentina MM Tn 1.49 1.50 -0.6% 3.07 2.94 4.4%
Paraguay MM Tn   0.13   0.13   -2.4%       0.27   0.28   -3.9%
Cement, masonry & lime total       1.61   1.62   -0.7%       3.34   3.22   3.7%
Argentina:
Concrete MM m3 0.25 0.20 23.7% 0.50 0.38 33.5%
Railroad MM Tn 1.16 1.23 -6.1% 2.32 2.46 -5.5%
Aggregates   MM Tn   0.25   0.27   -7.4%       0.54   0.51   6.6%

2Sales volumes include inter-segment sales

The challenging macroenviorenment in 2Q18 prevented sales volumes of
cement, masonry and lime in Argentina to grow, remaining almost flat YoY
at 1.49 million tons. Sales volumes in Paraguay fell 2.4% in the period
to 0.13 million tons, mainly due to the high utilization rate and the
lower inventory levels compared to the prior year. As a result,
consolidated total sales volumes of cement, masonry and lime for the
quarter decreased 0.7% YoY to 1.61 million tons.

Concrete volumes in Argentina, increased 23.7% YoY to 0.25 million m3
mainly driven by a good progress in public infrastructure works,
principally in the metropolitan area of Buenos Aires.

In 2Q18, aggregate volumes declined 7.4% YoY to 0.25 million tons. This
also affected volumes at Ferrosur, which declined 6.1% to 1.16 million
tons principally reflecting lower transported volumes of own and
third-party aggregates.

Review of Financial Results

Table 3: Consolidated Statement of Financial Position
(amounts expressed in millions of pesos, unless otherwise noted)            
 

Three-months ended June 30,

Six-months ended June 30,

   

2018

 

2017

 

% Chg.

     

2018

 

2017

 

% Chg.

Net revenue 4,757   3,467 37.2% 9,291 6,669 39.3%
Cost of sales   (3,426)   (2,432)   40.9%       (6,659)   (4,691)   41.9%
Gross Profit   1,331   1,035   28.5%       2,631   1,978   33.0%
Selling and administrative expenses (365) (273) 33.6% (692) (542) 27.7%
Other gains and losses (8) 1 n/a (4) 1 -381.1%
Tax on debits and credits to bank accounts (31) (39) -20.6% (96) (79) 21.3%
Finance costs, net
Exchange rate differences (515) (130) 295.3% (625) (43) 1348.4%
Financial income 63 16 295.1% 171 20 768.5%
Financial expenses   (219)   (178)   22.7%       (368)   (320)   15.1%
Profit before taxes   256   432   -40.6%       1,018   1,015   0.3%
Income tax expense
Current 5 (130) -103.6% (195) (312) -37.5%
Deferred   (83)   (9)   781.2%       (97)   (11)   752.1%
Net profit   178   293   -39.3%       727   692   5.0%
Net majority income   179   276   -35.0%       706   630   11.9%

Net Revenues

Net revenue increased 37.2% to Ps.4,757 million in 2Q18, from
Ps.3,467 million in the comparable quarter last year, mainly driven by
revenue growth in the Cement, masonry and lime segments in Argentina and
Paraguay, and further supported by continued growth in the Concrete
segment.

Cement, masonry and lime revenues in Argentina were up 33.4% YoY, to
Ps.3,503 million despite volumes remaining almost flat. Cement revenues
in Paraguay increased 49.2%, reaching Ps.369 million in the quarter as
the 2.4% YoY decline in volume was more than offset by Paraguayan
Guarani appreciation against the Argentine peso and better local pricing.

Concrete revenues rose 80.3% YoY to Ps.790 million driven by volume
growth and higher prices. In addition, Railroad revenues rose 24.9% to
Ps.485 million, slightly below inflation mainly reflecting lower
transported volumes, partially compensated by higher prices. Aggregates
revenues were up 6.0% to Ps.69 million during the period, reflecting a
7,4% decline in volumes and a significantly higher share of FOB sales in
the quarter.

Cost of sales increased 40.9% YoY reaching Ps.3,426 million in
2Q18. In Cement, masonry and lime in Argentina cost of sales increased
31.7% YoY, principally reflecting the impact of the peso depreciation on
the Company's cost structure, mainly in thermal and electricity costs.

Gross profit rose 28.5% YoY to Ps.1,331 million in
the second quarter of 2018 from Ps.1,035 million in same quarter of last
year, with gross profit margin contracting 189 basis points YoY to
28.0%. The Cement, masonry and lime segment in Argentina reported an YoY
improvement of 88 basis points in gross margin reaching 33.4%, that was
more than offset by lower transported volumes in the Railroad segment,
robust growth in the lower-margin Concrete segment, and a slight
decrease in gross profit of the Cement segment in Paraguay.

Selling and Administrative Expenses

Selling and administrative expenses (SG&A) in 2Q18 rose 33.6% YoY to
Ps.365 million, from Ps.273 million in 2Q17, affected by expenses
resulting from the obligations of being a publicly listed company.
Notwithstanding, as a percentage of revenues, SG&A declined 20 basis
points to 7.7% in 2Q18 from 7.9% in 2Q17 principally due to higher cost
dilution along with a reduction in the effective sales tax rate.

Adjusted EBITDA & Margin

Table 4: Adjusted EBITDA Reconciliation & Margin
(amounts expressed in millions of pesos, unless otherwise noted)
     

Three-months ended
June 30,

 

Six-months ended
June 30,

   

2018

 

2017

 

% Chg.

   

2018

 

2017

 

% Chg.

Adjusted EBITDA reconciliation:        
Net profit 178 293 -39.3% 727 692 5.0%
(+) Financial interest, net 124 151 -18.1% 139 266 -47.7%
(+) Income tax expense 79 139 -43.5% 292 323 -9.8%
(+) Depreciation and amortization 195 145 34.0% 384 301 27.6%
(+) Exchange rate differences 515 130 295.3% 625 43 1348.4%
(+) Other financial expenses, net 32 11 189.1% 58 35 68.0%
(+) Tax on debits and credits to bank accounts   31   39   -20.6%     96 79   21.3%
Adjusted EBITDA 1,153 909 26.9% 2,319 1,738 33.4%
Adjusted EBITDA Margin   24.2%   26.2%   -197bps     25.0% 26.1%   -110bps

Adjusted EBITDA increased 26.9% year-over-year in the second
quarter of 2018 to Ps.1,153 million, mainly driven by the Cement
segments in Argentina and Paraguay.

Adjusted EBITDA Margin, however, declined 197 basis points
to 24.2% compared to 26.2% in 2Q17, mostly as a result a poor Railroad
segment performance and strong growth in lower margin-Concrete revenues
during the period.

Adjusted EBITDA for the Cement segment in Argentina, which represented
85% of the consolidated adjusted EBITDA in 2Q18, increased 36.6% YoY to
Ps.982 million. Adjusted EBITDA margin expanded 65 basis points to 28.0%
during the period.

The Cement segment in Paraguay, reported a 33.7% increase in Adjusted
EBITDA reaching Ps.125 million, while the Adjusted EBITDA margin
contracted 395 basis points to 33.9%, due to a temporary purchase of
third-party clinker. Furthermore, while the Concrete segment reported a
49.2% increase in Adjusted EBITDA reaching Ps.27 million, the Adjusted
EBITDA margin contracted 71 basis points.

By contrast, Adjusted EBITDA for the Railroad segment fell 76.4% to
Ps.16 million in the second quarter of 2018, with Adjusted EBITDA margin
contracting to 3.2% from 17.1% in 2Q17 as a result of lower dilution of
fixed costs primarily due to a decline in transported volumes of
aggregates.

Finance Costs-Net

Table 5: Finance Costs-Net
(amounts expressed in millions of pesos, unless otherwise noted)
             

Three-months ended
June 30,

Six-months ended
June 30,

     

2018

 

2017

 

% Chg.

     

2018

 

2017

 

% Chg.

   
Exchange rate differences (515) (130) 295.3% (625) (43) 1348.4%
Financial income 63 16 295.1% 171 20 768.5%
Financial expenses     (219)   (178)   22.7%       (368)   (320)   15.1%
Total Finance Costs-Net     (671)   (292)   129.3%       (822)   (343)   139.4%

During 2Q18, total finance costs-net increased by 129.3% YoY to Ps.671
million, principally as a result of higher foreign exchange differences,
resulting from the peso depreciation in the period.

In 2Q18, the Company reported foreign exchange loss of Ps.515 million,
mostly driven by non-cash losses, as a result of the 43.3% peso
depreciation in the net debt position in foreign currency, as compared
to a Ps.130 million loss in 2Q17 when the peso depreciated 7.9%.

Net Financial expense, decreased by Ps.7 million as a result of
increases in both the cash balance and interest rates.

Net Profit and Net Profit Attributable to Owners of the Company

Net Profit for the second quarter of 2018, decreased 39,3% to
Ps.178 million from Ps.293 million in 2Q17. The effective tax rate
declined to 30.7% in 2Q18 from 32.2% in the year-ago period, as a result
of the adjustment in deferred taxes in Argentina from the Tax Reform
enacted on December 2017 which reduced the income tax rate from 35% to
30% in 2018 and 2019, and to 25% thereafter.

Net Profit Attributable to Owners of the Company declined 35%
YoY, or Ps.97 million, to Ps.179 million in 2Q18. During the quarter,
the Company reported earnings per common share of Ps.0.3010 and earnings
per ADR of Ps.1.5500, compared with earnings per share of Ps.0.4878 and
earnings per ADR of Ps.2.4390 in 2Q17.

Capitalization

Table 6: Capitalization and Debt Ratio
(amounts expressed in millions of pesos, unless otherwise noted)
       
   

As of June 30,

   

As of FY ended
December 31,

 
Total Debt 5,390 4,744 4,364
- Short-Term Debt 2,872 3,017 1,760
- Long-Term Debt 2,518 1,728 2,604
Cash and Cash Equivalents   1,618   298     3,180
Total Net Debt   3,772   4,446     1,184
Shareholders' Equity   5,690   1,383     4,416
Capitalization   11,080   6,128     8,780
LTM Adjusted EBITDA 4,523 3,083 3,942
Net Debt /LTM Adjusted EBITDA   0.83x   1.44x     0.30x

As of June 30, 2018, total cash and cash equivalents were Ps.1,618
million down from Ps.3,180 million as of the end of 2017 mainly due to
increased capex investments along with seasonally higher working capital
needs. Total debt at the close of the quarter was Ps.5,390 million,
composed by Ps.2,872 million in short-term borrowings, including the
current portion of long-term borrowings (or 53% of total borrowings),
and Ps.2,518 million in long-term borrowings (or 47% of total
borrowings).

As of June 30, 2018, 38.5%, or Ps.2,077 million, Loma Negra's total debt
was denominated in U.S. dollars, 39.6% (or Ps.2,135 million) in
Guaraníes, and 21.9% (or Ps.1,178 million) in Argentine pesos, with an
average duration of 1.9 years.

At the close of 2Q18, Ps.2,895 million, or 53.7%, of the Company's total
consolidated borrowings bore interest at floating rates, including
Ps.205 million of Peso-denominated borrowings that bore interest at
rates based on the Buenos Aires Deposits of Large Amount Rate, or
BADLAR, Ps.2,033 million of foreign currency-denominated borrowings that
bore interest at rates based on Libor, and Ps.657 million of borrowings
with other floating interest rate.

The Net Debt to Adjusted EBITDA (LTM) ratio declined to 0.83x in 2Q18
from 1.44x as of June 30, 2017 reflecting the IPO proceeds and the use
of funds in operations and investing activities.

Cash Flows

Table 7: Condensed Interim Consolidated Statement of Cash Flows
for the Six-months and Three-months

Ended June 30, 2018
and 2017
         
(amounts expressed in millions of pesos, unless otherwise noted)

Three-months
ended June 30,

Six-months
ended June 30,

   

2018

 

2017

   

2018

 

2017

CASH FLOWS FROM OPERATING ACTIVITIES
Net profit for the period 178 293 727 692
Adjustments to reconcile net profit to net cash provided by
operating activities
887 557 1,504 945
 
Changes in operating assets and liabilities: (999) (377) (2,078) (1,079)
Net cash generated by operating activities 66 473 153 558
 
CASH FLOWS FROM INVESTING ACTIVITIES
Property, plant and equipment, Intangible Assets, net (461) (207) (1,314) (676)
Others (10) (40) (19) (13)
 
Net cash used in investing activities (471) (247) (1,334) (689)
 
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds / Repayments from borrowings, Interest paid (634) 211 (790) 25
Dividends paid - (442) - (442)
 
Net cash (used in) generated by financing activities (634) (232) (790) (417)
 
Net decrease in cash and cash equivalents (1,039) (6) (1,971) (547)
Cash and cash equivalents at the beginning of the year 2,294 265 3,180 803
Effects of the exchange rate differences on cash and cash
equivalents in foreign currency
363 38 410 15
 
Cash and cash equivalents at the end of the period     1,618   298     1,618   298

During the six-month period ended June 30, 2018, total capital
expenditures were Ps.1,314 million, 52% directed to the expansion of
production capacity of L´Amalí plant. Cash flow generated by operating
activities as of June 30, 2018 was Ps.153 million compared to Ps.558
million in the year ago period explained mainly by higher working
capital needs this quarter, mainly regarding inventories higher
replacement cost and maintenance stoppage schedule requirements.

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 of
approximately US$350 million, and is expected to be completed early 2020.

For this project, the Company contracted Sinoma International
Engineering Co. Ltd. ("Sinoma") for the construction of the new cement
production line with a capacity of 5,800 tons per day of clinker. The
agreement includes the engineering, provision and shipment of all the
equipment for the plant and its construction.

Basic engineering of the new plant and study of soil in situ was
completed in 4Q17. The Company continued to make progress with overall
project execution during the quarter. First equipments are to arrive
before 2018YE. The local manufacturer for the steel structure was
contracted. Electromechanical construction works are under final
selection process. Civil works for major equipment remain on schedule.
Additions to Property, Plant and Equipment related to this project
during 2Q18 amounted to Ps.154 million.

Recent Events

Argentina to become Hyperinflationary economy

Inflation indices of Argentina were released showing a three-year
cumulative rate in excess of 100 percent, indicating that the
Argentinian economy is, as defined by IAS 29, hyperinflationary.

In light of the stated preferences in IAS 29 that all entities apply
inflation accounting from the same time and using the same general price
index, the use of inflation accounting will be applied in respect of
Argentinian peso functional operations for periods ending after July
1st, 2018.

The Company is evaluating the effects on the interim financial
statements which will be considered for subsequent reporting periods

2Q18 Earnings Conference Call

When:

  10:00 a.m. U.S. ET (11:00 a.m. BAT), August 10, 2018

Dial-in:

0800-444-2930 (Argentina), 1-866-807-9684 (U.S.), 1-866-605-3852
(Canada), 1-412-317-5415 (International)

Password:

Loma Negra Earnings Call

Webcast:

https://services.choruscall.com/links/loma180810rmgzeNa5.html

Replay:

A telephone replay of the conference call will be available
between August 10, 2018 at 1:00 pm U.S. E.T. and ending on August
16, 2018. 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 10122124. The audio of the conference call will
also be archived on the Company's website at www.lomanegra.com

 

Definitions

Adjusted EBITDA is calculated as net profit plus financial
interest, net plus income tax expense plus depreciation and amortization
plus exchange rate differences plus other financial expenses, net plus
tax on debits and credits to bank accounts. Loma Negra believes that
excluding tax on debits and credits to bank accounts from its
calculation of Adjusted EBITDA is a better measure of operating
performance when compared to other international players.

Net Debt is calculated as borrowings less cash and cash
equivalents.

About Loma Negra

Founded in 1926, Loma Negra is the leading cement company in Argentina,
producing and distributing cement, masonry cement, aggregates, concrete
and lime, products primarily used in private and public construction.
Loma Negra is a vertically-integrated cement and concrete company, with
nationwide operations, supported by vast limestone reserves,
strategically located plants, top-of-mind brands and established
distribution channels. The Company also owns a 51% equity stake in an
integrated cement production plant in Paraguay, which is one of two
leading cement producers in that country. Loma Negra is listed both on
BYMA and on NYSE in the U.S., where it trades under the symbol "LOMA".
One ADS represents five (5) common shares. For more information, visit www.lomanegra.com.

Note

The Company presented some figures converted from Pesos to U.S.
dollars for comparison purposes. The exchange rate used to convert Pesos
to U.S. dollars was the reference exchange rate (Communication "A" 3500)
reported by the Central Bank for U.S. dollars.
The information
presented in U.S. dollars is for the convenience of the reader only.
Certain
figures included in this report have been subject to rounding
adjustments. Accordingly, figures shown as totals in certain tables may
not be arithmetic aggregations of the figures presented in previous
quarters.

Disclaimer

This release contains forward-looking statements within the meaning of
federal securities law that are subject to risks and uncertainties.
These statements are only predictions based upon our current
expectations and projections about possible or assumed future results of
our business, financial condition, results of operations, liquidity,
plans and objectives. In some cases, you can identify forward-looking
statements by terminology such as "believe," "may," "estimate,"
"continue," "anticipate," "intend," "should," "plan," "expect,"
"predict," "potential," "seek," "forecast," or the negative of these
terms or other similar expressions. The forward-looking statements are
based on the information currently available to us. There are important
factors that could cause our actual results, level of activity,
performance or achievements to differ materially from the results, level
of activity, performance or achievements expressed or implied by the
forward-looking statements, including, among others things: changes in
general economic, political, governmental and business conditions
globally and in Argentina, changes in inflation rates, fluctuations in
the exchange rate of the peso, the level of construction generally,
changes in cement demand and prices, changes in raw material and energy
prices, changes in business strategy and various other factors. You
should not rely upon forward-looking statements as predictions of future
events. Although we believe in good faith that the expectations
reflected in the forward-looking statements are reasonable, we cannot
guarantee that future results, levels of activity, performance and
events and circumstances reflected in the forward-looking statements
will be achieved or will occur. Any or all of Loma Negra's
forward-looking statements in this release may turn out to be wrong. You
should consider these forward-looking statements in light of other
factors discussed under the heading "Risk Factors" in the prospectus
filed with the Securities and Exchange Commission on October 31, 2017 in
connection with Loma Negra's initial public offering. Therefore, readers
are cautioned not to place undue reliance on these forward-looking
statements. Except as required by law, we undertake no obligation to
update publicly any forward-looking statements for any reason after the
date of this release to conform these statements to actual results or to
changes in our expectations.

Table 8: Condensed Interim Consolidated Statements of Financial
Position as of June 30, 2018 and December 31, 2017 (Unaudited)
(amounts expressed in millions of pesos, unless otherwise noted)
   

As of June 30,

As of December 31,

   

2018

 

2017

ASSETS        

Non-Current assets

       
Property, plant and equipment 7,482 5,979
Intangible assets 72 75
Investments 0 0
Goodwill 39 39
Inventories 266 215
Other receivables - 145
Trade accounts receivable   625   -

Total non-current assets

  8,486   6,454
Current assets        
Inventories 2,777 1,834
Other receivables 436 242
Trade accounts receivable 1,697 1,263
Investments 1,250 2,991
Cash and banks   368   189
Total current assets   6,528   6,519
TOTAL ASSETS   15,014   12,972
SHAREHOLDERS' EQUITY        
Capital stock and other capital related accounts 1,922 1,922
Reserves 1,650 59
Retained earnings 706 1,591
Accumulated other comprehensive income 530 250
Equity attributable to the owners of the Company 4,807 3,823
Non-controlling interests   883   593
TOTAL SHAREHOLDERS' EQUITY   5,690   4,416
LIABILITIES        
Non-current liabilities        
Borrowings 2,518 2,604
Accounts payable 85 71
Provisions 196 161
Tax liabilities - 0
Other liabilities 14 16
Deferred tax liabilities   330   229
Total non-current liabilities   3,142   3,082
Current liabilities        
Borrowings 2,872 1,760
Accounts payable 2,336 2,362
Advances from customers 156 206
Salaries and social security payables 430 542
Tax liabilities 359 573
Other liabilities   29   32
Total current liabilities   6,181   5,474
TOTAL LIABILITIES   9,324   8,556
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES   15,014   12,972

Table 9: Condensed Interim Consolidated Statements of Profit or
Loss and Other Comprehensive Income for the six months ended June
30, 2018 and 2017 (Unaudited)
(amounts expressed in millions of pesos, unless otherwise noted)
         

Three-months ended
June 30,

Six-months ended
June 30,

     

2018

 

2017

 

% Change

 

2018

 

2017

 

% Change

Net revenue 4,757   3,467   37.2% 9,291   6,669   39.3%
Cost of sales     (3,426)   (2,432)   40.9%   (6,659)   (4,691)   41.9%
Gross profit     1,331   1,035   29%   2,631   1,978   33%
 
Selling and administrative expenses (365) (273) 33.6% (692) (542) 27.7%
Other gains and losses (8) 1 n/a (4) 1 -381.1%
Tax on debits and credits to bank accounts (31) (39) -20.6% (96) (79) 21.3%
Finance costs, net
Exchange rate differences (515) (130) 295.3% (625) (43) 1348.4%
Financial income 63 16 295.1% 171 20 768.5%
Financial expenses     (219)   (178)   22.7%   (368)   (320)   15.1%
Profit before taxes     256   432   -41%   1,018   1,015   0%
Income tax expense
Current 5 (130) -103.6% (195) (312) -37.5%
Deferred     (83)   (9)   781.2%   (97)   (11)   752.1%
Net profit     178   293   -39%   727   692   5%
 
Other Comprehensive Income
Items to be reclassified through profit and loss:
Exchange differences on translating foreign operations 464 4 n/a 548 21 2517.1%
Cash flow hedges1     -   -   n/a   -   -   n/a
Total other comprehensive (loss) income     464   4   n/a   548   21   n/a
TOTAL COMPREHENSIVE INCOME     642   296   n/a   1,274   713   n/a
Net Profit (loss) for the period attributable to:
Owners of the Company 179 276 -35.0% 706 630 11.9%
Non-controlling interests     (2)   17   n/a   21   62   n/a
NET PROFIT FOR THE PERIOD     178   293   -39.3%   727   692   5.0%
Total comprehensive income (loss) attributable to:
Owners of the Company 416 288 44.3% 985 651 51.2%
Non-controlling interests     226   54   n/a   289   62   n/a
TOTAL COMPREHENSIVE INCOME     642   342   n/a   1,274   713   n/a
Earnings per share (basic and diluted):     0.3010   0.4878   -38.3%   1.1838   1.1135   6.3%

Table 10: Condensed Interim Consolidated Statement of Cash Flows
for the Six-months and Three-months Ended June 30, 2018 and 2017
(Unaudited)
(amounts expressed in millions of pesos, unless otherwise noted)  
   

Three-months ended
June 30,

Six-months ended
June 30,

2018

 

2017

2018

 

2017

CASH FLOWS FROM OPERATING ACTIVITIES
Net profit for the period 178 293 727 692
Adjustments to reconcile net profit to net cash provided by
operating activities
Income tax expense 79 139 292 323
Depreciation and amortization 195 146 384 301
Provisions 28 14 35 26
Interest expense 179 141 298 263
Share of profit of associates - - - -
Interest income (88) 82 - (4)
Exchange rate differences 496 41 496 42
Gain on disposal of Property, plant and equipment - (5) - (5)
Changes in operating assets and liabilities
Inventories (492) (105) (867) (372)
Other receivables (53) (47) (135) (26)
Trade accounts receivable (82) (26) (363) (335)
Advances from customers 10 (86) (51) (6)
Accounts payable 93 52 (124) (168)
Salaries and social security payables (134) (82) (115) (52)
Provisions (5) (5) (10) (7)
Tax liabilities 16 (2) 15 7
Other liabilities (0) (3) (3) (5)
Income tax paid (351) (73) (427) (115)
Net cash generated by operating activities 66 473 153 558
 
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of Property, plant and equipment 2 13 5 13
Payments to acquire Property, plant and equipment (408) (218) (768) (680)
Payment of advances of Property, plant and equipment (53) - (548) -
Payments to acquire Intangible Assets (2) (2) (3) (9)
Interest collected - (27) - -
Contributions to Trust (10) (13) (19) (13)
Net cash used in investing activities (471) (247) (1,334) (689)
 
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 236 1,303 418 1,487
Interest paid (144) (111) (302) (267)
Dividends paid - (442) - (442)
Repayment of borrowings (727) (982) (906) (1,194)
Net cash used in financing activities (634) (232) (790) (417)
Net decrease in cash and cash equivalents (1,039) (6) (1,971) (547)
Cash and cash equivalents at the beginning of the year 2,294 265 3,180 803
Effects of the exchange rate differences on cash and cash
equivalents in foreign currency
363 38 410 15
 
Cash and cash equivalents at the end of the period 1,618 298 1,618 298

Table 11: Financial Data by Segment
(amounts expressed in millions of pesos, unless otherwise noted)
     

Three-months ended June 30,

Six-months ended June 30,

     

2018

 

%

 

2017

 

%

 

2018

 

%

 

2017

 

%

Net revenue     4,757   100.0%   3,467   100.0%   9,291   100.0%   6,669   100.0%
Cement, masonry cement and lime—Argentina 3,503   73.6%   2,626   75.7% 6,903   74.3%   5,035   75.5%
Cement—Paraguay 369 7.8% 247 7.1% 715 7.7% 528 7.9%
Concrete 790 16.6% 438 12.6% 1,497 16.1% 798 12.0%
Railroad 485 10.2% 388 11.2% 926 10.0% 747 11.2%
Aggregates 69 1.4% 65 1.9% 137 1.5% 117 1.8%
Others 28 0.6% 37 1.1% 53 0.6% 67 1.0%
Eliminations     (487)   -10.2%   (334)   -9.6%   (939)   -10.1%   (623)   -9.3%
Cost of sales     3,426   100.0%   2,432   100.0%   6,659   100.0%   4,691   100.0%
Cement, masonry cement and lime—Argentina 2,332 68.1% 1,771 72.8% 4,610 69.2% 3,439 73.3%
Cement—Paraguay 284 8.3% 187 7.7% 521 7.8% 371 7.9%
Concrete 744 21.7% 406 16.7% 1,420 21.3% 740 15.8%
Railroad 466 13.6% 320 13.2% 880 13.2% 621 13.2%
Aggregates 71 2.1% 65 2.7% 138 2.1% 115 2.4%
Others 15 0.5% 17 0.7% 29 0.4% 29 0.6%
Eliminations     (487)   -14.2%   (334)   -13.7%   (939)   -14.1%   (623)   -13.3%
Selling, admin. expenses and other gains & losses     373   100.0%   272   100.0%   696   100.0%   541   100.0%
Cement, masonry cement and lime—Argentina 283 76.0% 213 78.4% 527 75.7% 410 75.8%
Cement—Paraguay 16 4.3% 9 3.2% 29 4.2% 18 3.4%
Concrete 27 7.2% 19 7.0% 51 7.3% 36 6.7%
Railroad 36 9.7% 19 7.2% 68 9.8% 55 10.1%
Aggregates 1 0.4% 1 0.5% 3 0.4% 3 0.5%
Others     9   2.5%   10   3.8%   18   2.6%   19   3.5%
Depreciation and amortization     195   100.0%   145   100.0%   384   100.0%   301   100.0%
Cement, masonry cement and lime—Argentina 94 48.3% 77 53.3% 191 49.8% 174 57.8%
Cement—Paraguay 56 28.8% 42 29.0% 111 28.8% 77 25.5%
Concrete 8 4.0% 5 3.1% 16 4.0% 8 2.7%
Railroad 33 17.0% 18 12.5% 60 15.7% 36 12.0%
Aggregates 3 1.6% 2 1.7% 5 1.3% 5 1.7%
Others     1   0.3%   1   0.4%   1   0.3%   1   0.4%
Adjusted EBITDA     1,153   100.0%   909   100.0%   2,319   100.0%   1,738   100.0%
Cement, masonry cement and lime—Argentina 982 85.2% 719 79.1% 1,957 84.4% 1,360 78.3%
Cement—Paraguay 125 10.9% 94 10.3% 275 11.9% 216 12.4%
Concrete 27 2.3% 18 2.0% 42 1.8% 31 1.8%
Railroad 16 1.4% 67 7.3% 37 1.6% 107 6.2%
Aggregates (0) 0.0% 1 0.1% 1 0.0% 4 0.3%
Others     4   0.3%   10   1.1%   7   0.3%   20   1.1%
Reconciling items:
Depreciation and amortization (195) (145) (384) (301)
Tax on debits and credits banks accounts (31) (39) (96) (79)
Finance costs, net (671) (292) (822) (343)
Income tax (79) (139) (292) (323)
NET PROFIT FOR THE PERIOD     178       293       727       692    

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