Loma Negra Compañía Industrial Argentina Sociedad Anónima Q2 FY2024 earnings call

• The second quarter showed resilience with top-line at Ps. 166.1 billion, down 28%, but consolidated adjustment EBITDA at $51 million (down 11.7% in pesos) with margin expansion. - Cement segment EBITDA margin expanded 565 basis points. - SG&A expenses decreased sharply by 28.5% but remained flat at 9.4% of sales. - Energy efficiency improved with renewable energy proportion in Cement production matrix up to 61% from 36% in Q2 2023.

Cement, masonry & lime: Top-line down 26.1% with volumes contracting 32.5%. Adjusted EBITDA margin stood at 31.5%, expanding 565 basis points. Concrete: Revenues decreased by 47% in the quarter, mainly due to a 45% decrease in dispatches. Adjusted EBITDA margin contracted 796 basis points to minus 5%. Aggregate: Revenues decreased by 36% with state volumes down 25%. Adjusted EBITDA margin contracted to minus 10.8% from 5.3% in Q2 2023. Railroad: Revenues decreased by 14.5% in the quarter. Adjusted EBITDA margin expanded by 153 basis points to 6.3%.

• Expectation of continued recovery in Cement volumes with gradual stabilization of macroeconomic factors. - Hopeful about construction industry opportunities with reduction in inflation and attractive foreign direct investment. - Anticipation of maintaining current performance and seeing improvement in the fourth quarter.

• Macroeconomic challenges impacting industry performance. - Potential energy cost increases and natural gas shortages affecting kiln operations. - Volatility in volume dispatches affecting segments like Concrete and Aggregate.

Q: About July volumes and price trend, and sustainability of margins.

A: Volumes in July showed recovery trend expected to continue; margins expected to be maintained with factors like lower inflation and credit increases.

Q: Drivers of recovery in second half, public vs private works, impact of Rige.

A: Drivers include private works, resumption of public works, and potential positive impact of Rige program.

Q: Capital allocation, dividends, CapEx, and market share maintenance.

A: Capital allocation to address debt maturities; market share maintained without lowering prices to avoid long-term value destruction.

Q: Mix of bag vs bulk volumes and pricing impact.

A: Current mix within historic parameters; pricing strategy similar for both modes with no significant impact on pricing from mix variations