Loma Negra Compañía Industrial Argentina SA Q2 FY2023 earnings call

• Macro-economic struggle and political uncertainty affected economic activity, but cement industry contraction was resilient with sale volume tracking second for the second quarter in historical terms. - Top line for the quarter reached ARS51 billion, decreasing 6.5%, with Cement segment contraction partly compensated by Concrete's good performance. - Adjusted EBITDA for the second quarter stood at $63 million, flat from Q2 2022. - Announced two dividend payments totaling approximately $120 million, representing ~$1 per ADR. - Strong balance sheet with low net debt ratio at 0.82 times. - Cement segment margin continued to rank among world-class EBITDA margins, with US dollar EBITDA per ton at $36.8, 1% above last year's Q2.

Cement, masonry and lime segment was down 12.4% in top line, with volume contracting 3.6% year-on-year, mainly due to a decline in bagged cement sales. Concrete revenues strongly increased 26.6% in the quarter, with volumes up 14.8% due to strong momentum from private construction and public works. Aggregate segments show an expansion of 1.8% with a sales volume down of 8.3% mostly due to operational setbacks but compensated with strong price performance. Railroad revenues decreased 13.4% in the quarter year-on-year, affected by the decrease in transported volumes of fracsand and Aggregates.

• Expect volumes for the second half of the year to be slightly below 2022 figures but remain robust historically. - Natural gas prices: New contracts starting September and October have lower prices than last year's winter contracts, expected to improve margins. - Concrete business is expected to continue growing as the industry professionalizes, increasing the channel's participation.

• Macroeconomic struggle and increase in political uncertainty approaching the presidential election affecting economic activity. - Higher inflation and lower economic activity levels posing challenges.

Q: Given the industry's recent deceleration, what are perceptions for demand in the second half of the year, especially regarding the balance between bulk and bagged sales? Also, regarding pricing and cost pressures.

A: Expecting a slight acceleration in volumes remaining, with bulk cement continuing to gain tariff. Prices may have temporary margin impact due to inflation delay but no competitive change expected.

Q: Regarding natural gas prices and their impact on margins, and the Concrete business outlook.

A: Natural gas prices from new contracts will improve margins. Concrete business has room to continue growing as the industry professionalizes, increasing the channel's participation.