Q4 2019 Earnings Call
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Good morning, and welcome to La Mano Negra fourth quarter 2019 conference call and webcast. All participants will be in listen-only mode wage. Should you need assistance, please signal the conference specialist by pressing the star key followed by zero after today's presentation will be an opportunity to ask questions. Mr. Man will be responding in Spanish immediately following an English by an English translation to ask a question. You may press star them one on your telephone keypad to withdraw your question, please press * then two, please note that this event is being recorded. I would now like to turn the conference over to mister Vestige. Have a VR please. Go ahead.
Thank you. Hi, good morning. Thank you for joining yesterday. I appreciate your participation in this conference call by now. Everyone should have access to our earnings press release and today's call a presentation both of which were distributed yesterday. After market close speaking during today's call will be served your 5 months our CEO and vice president of the board of directors together with our CFO Mark Levin both will be available for the Q&A session right after the presentation before we begin. 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 change events or circumstances now, I would like to turn the call over to our CEO Sergio pipeline.
Thank you. Hello, everyone, and thank you for today. I am.
To welcome you to the fourth quarter 2019 earnings conference call who is begin our presentation with a discussion of the highlights of the quarter and then Mom would take you to our market review and financial decide afterwards. We make some closing remarks. Finally. We will open the code to your question. Once again, the company off the capacity to adapt to the context of talent representation inflation activity construction by optimizing the cost of production improving margin and I will ask to sustain a profitability mentioned in US dollar
I'm showing like three the forequarter was characterized by a political transition and mid-grade Financial instability. Both Factor ending up postponing economic recovery and negatively impacting the construction sector are shown this light net revenues declined by 15% most impact by Simon and down payment in Argentina particularly as much for public infrastructure Project work with phone calls assessment also declined by the temperature and but thanks to positive pricing and the commitment in control. We were able to stand margin by 69x equals.
On the back of our competitive leadership and determination to undertake structural change to reach in 2019 and a certain amount of $100,000 and when it flew in the non-recurring costs of structural agency accept many details will have reach 209 million am American expansion of 378 basic point. We continue executing our Expansion Project at limani plan assist part of our strategy and we allow us to continue increasing production efficiency and profitability. I will now hand of the call please Marcos. Go ahead. I would they have anyone 22/4. Let me start by providing a quick outline of the macro environment and Industry Trends in Argentina after the presidential election.
You know till the last year they'll go and government had to make some measures to recover the stability of the financial system exchange and capital control and renovation jobs among others under up depending the ongoing economic and financial crisis negatively impacting the construction activity bulb the public and private sector during the fourth quarter the 17th Street declined by 9.4% year-over-year taking a closer look at the 17 Man by segment. We have served that the trend of the first quarter is maintained where the Box segment continues to recover percentage of sale at the expense of bugs.
about segment declined by
3.1% decrease by 17.2% consequently the share of cement something back increased by almost four percentage points off 57% in fourth quarter 82 almost 61% in fourth quarter 1980 rent. The incoming government took steps to achieve an economic recovery reschedule that maturities and regain confidence. We are still under this process. Therefore. We do not see an economic recovery before the second semester of the year last year ended up with an alarm volume 6.8% below that of 2018 and 9% below.
Lund 2017 historic record economy is a quotation for 2020 GDP minus 1.5% off but we expect a mid-single-digit declined by year-end with a recovery already by the second half of the year.
No, please turn to slide five for a review of our Revenue performance by segment. Top Line was down 15% in the fourth quarter as a persistent economic contraction impacted the construction activity seven revenues dropped by 9.1% impacted by sales volume drop of 11.1% which was partially compensated by real price increases as a consequence of the suspension or postponement of large public and private projects concrete and a great segment presented a sharp decline in sales volume a couple with softer prices resulting revenues of 15.5% of 35.1% year-over-year respectively by contrast. In fact, why does the amount remains strong although revenues were down 4.3% with volume declining 3.8% of the operation was affected by adverse weather conditions dead.
For the regular segment products and reported volumes contributed positively to revenues. However, it was not enough to compensate the drop in building materials and chemicals volume resulting in a total decline of 15.5%
What we going to slide six Consolidated gross profit for the Border was down 14% on here with a margin expansion of 68 basis points reaching 30% in a quarter reflective production cost under control and also the benefits from the footprint electricity efforts achieving the previous quarter's sg&a expenses are subject to the revenues increased by $146 shift points to 8.3% impacted by the drop in revenues effective sales tax Red Red Cap in place for 1.68% is 18 to 1.5% in fourth quarter. Ninety. Do you in the aircraft office profit expanded by 3% off emojis improved 230 basis points?
Please talk to.
Slide seven impact by the plunging demand our adjusted with the a declined by 13.1% in the fourth quarter in a year-on-year basis. However, due to a timer goes control the positive pricing margin expanded by 69 basis points main cost-benefits revolve around energy inputs and previous structure adequacy org. We reach cuz after the VTA around two point nine billion pesos or forty nine million dollars for the full year 2018 will reach $199 of a job. I want excluding the recurring cost of the structure adjusted to be tabled coverage 209 million dollars or 5% below. Mm.
When excluding the application of inflation accounting adjustability for the 7 segment in Argentina posted emerging expansion of 135 a 6.2 36% off a question about a white margin improved 228 basis points compared to or 4:18 reaching for the 2.6% Our concrete segment reported a decline to BTA which is -27.3 million pesos. This segment was more directly impact by the whole thing in public and private sector projects equally aggregate 7788 decline year-over-year to 5.2 million basis.
A compass with the building materials sector our regular segment Davis d a contract by almost 8% partially compensated by are transported good with a month or 12.3% in terms of repeat the airport on measured in US dollars or seven business in Argentina remain strong around $32 per ton 1% off the year ago quarter.
What we going to the bottom line on Friday and there's much of the income for the quarter Ridge 1 billion pesos total Financial results presented a loss of 205 million pesos compared to a gl350 1 million pesos in the fourth quarter in the previous year. The effects are preceded in real terms during the quarter resulted in for an interesting game of 350,000 medium basis here one hundred thirty-five million lower than that of 18 the higher interest rate environment and the hydro staff resulted in higher net pack or 445 million pesos.
About the position resulted in again of 89 million basis.
Moving going to the balance sheet, as you can see on slide nine. We continue to make progress in our capital expenditure plan with Investments for the quarter reaching 2.4 billion pesos birthday or fourteen million dollars, approximately. We finish the fiscal year 2018 with Annette tab to adjust the ratio of 0.86 times compared to 60 point forty three times at the beginning of the our net debt at the end of the quarter was 161 million dollars with a bra stepped breakdown by currency up 49% in hard currency 25% in one year and 26% in Austin that basis we recommended the war to fully invest, 2018 early eighties. I was a teenager execute expansion of our family plan.
a key element of our
With them strategy. I will now handle the call back to serve you.
Thank you Marcus. Now, please turn just like then I would like to conclude by combining our satisfaction with the results achieved in 2019 in a context of economic contraction a high Financial volatility the company so it's flexibility for that other station our competitive leadership and determination were critical factors took the tractor change necessary to be charged twice on the back of these factors. We are rich in 2019 of 899 million dollars. I'm going to clean 10 or recurring cost of a tractor. They can see a certain EDT. I will have reach 209 million dollars with a marginal a city 1.6% in this day of a criminal Global in self-pity around the effect of the corona videos and the oil prices plummet. It's hard job.
Go by and I'll look for 2020. However, our previous estimation consider a consensus showing another are of middle single-digit contraction and expectation for the recovery by the second semester.
I would lump conservative has not been conditioned by this sort of challenges and we maintain our calls in and trusting in the progress and development of both contribute to narrow the housing and infrastructure. Deficit. This is the reason why we continue executing and Expansion Project at the current month, and we allow us to continue increasing production efficiency and profitability to let us try in the future. This is an awful awful repair remark. You are now ready to take question operator. Please open the call for questions.
Thank you. We will not conduct the we will now closed our our conference Gaston. Go ahead.
Thank you for joining us today. We appreciate your interest in our company, and we will look forward to meeting more of you over the coming months and providing Financial business updates for the next quarter's in the meantime the team remains available to answer any questions that you may have. Thank you very much and enjoy the rest of your day.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.