Q2 2024 Loma Negra Compañía Industrial Argentina Sociedad Anónima Earnings Call

August 8, 2024

Good morning and welcome to the Loma Negra second quarter 2024 conference call and webcast. All participants will be in the Sonoma mode.

Operator: for conference call and webcast. Our participants will be in the Sonoma mode.

Operator: All participants will be in listen-only mode. Should you need assistance, please contact a conference specialist by pressing the star key followed by zero. To ask a question, you may press star, then 1 on your telephone keypad.

Operator: Should you need assistance, please send to our conference festivities for repressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

Operator: Should you need assistance, please contact a conference specialist by pressing the star key followed by zero.

Operator: Also, Mr. Sergio Faifman will be responding in Spanish immediately following in English translation. To ask a question, you may press star, then one on your telephone keypad. To try a question, please press star, then two.

Speaker Change: 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.

Operator: To ask a question, you may press star, then 1 on your telephone keypad.

Operator: Please note, this event is being recorded.

Diego Jalon: To withdraw your question, please press star then 2. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Diego Jalon, Head of Investor Relations. Please, Diego, go ahead.

Diego Jalon: I would now try to comment so that Mr. Diego Jalon, head of investor relations. Please, here, Diego, go ahead.

Diego Jalon: Thank you.

Diego Jalon: Good morning and welcome to Loma Negra's earnings conference calls. By now, everyone should have access to our earnings press release and the presentation for today's calls, both of which were distributed yesterday after market close.

Operator: Thank you.

Speaker Change: Good morning and welcome to Loma Negra's Earnings Conference Call.

Speaker Change: By now, everyone should have access to our earnings press release and the presentation for today's call.

Operator: Joining me on the call this morning will be Sergio Faifman, our CEO and Vice President of the Board of Directors, and our CFO, Marcos Gradin. Both of them will be available for the Q&A session. Now, I would like to turn the call over to Sergio.

Diego Jalon: Joining me on the call this morning will be Sergio Faifman, our CEO and Vice President of the Board of Directors, and our CFO Marco Rodin. Both of them will be available for the Q&A session.

Speaker Change: Both of which were distributed yesterday after market close.

Operator: Joining me on the call this morning will be Sergio Faifman, our CEO and Vice President of the Board of Directors, and our CFO , Marcos Gradin. Both of them will be available for the Q&A session.

Diego Jalon: 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.

Speaker Change: Before we proceed, I would like to make the following Safe Harbor Statements.

Speaker Change: 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.

Speaker Change: We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances.

Diego Jalon: This conference call will also include discussion on non-GAAP financial measures. The full reconciliation of the corresponding financial measures is included in the earnings press release.

Operator: This conference call will also include discussion on non-GAAP financial measures. The full reconciliation of the corresponding financial measures is included in the earnest press release. Now I would like to turn the call over to Sergio.

Sergio Faifman: Now, I would like to turn the call over to Sergio.

Sergio Faifman: Thank you, Diego. Hello, everyone, and thank you for showing us this morning.

Sergio Faifman: Thank you, Diego. Hello, everyone, and thank you for joining us this morning.

Sergio Faifman: I would like to start on my presentation by the occasion the highlights of the quarter. Then, Marco, we take you for our market review and financial result. Following that, I will share some final remarks before opening the call to your questions. Starting with slide two. We are glad to report another set of solid results. After starting the year, in a very challenging scenario, we significant year-to-year volume decline. Our business delivery in the second quarter and a certain everyday margin expansion, driven by our constant focus on free-tability and cost-control initiative. This demonstrates our strong capital-ability for efficiency and flexibility in adapting the challenging scenarios.

Sergio Faifman: I would like to start my presentation by discussing the highlights of the quarter.

Speaker Change: Then, Marcos will take you through our market review and financial results. Following that, I will share some final remarks before opening the call to your questions.

Sergio Faifman: Following that, I will share some final remarks before opening the call to your questions. We are glad to report another set of solid results. This demonstrates our strong capability for efficiency and flexibility in adapting to challenging scenarios driven by our constant focus on feasibility and cost control initiatives. Fortunately, we are starting to see a gradual but consistent recovery in cement volume, only down 11.7% despite the hard drop in volume. In the same sense, EBDI per tonne reached the red mark figures of $45, up 23% year-on-year and 15% on the second device in the upcoming quarter with less demanding capital needs. We will use our cash generation to gradually reduce our short-term pesos in debt.

Sergio Faifman: Starting with slide 2, we are glad to report another set of solid results.

Sergio Faifman: after starting the year in a very challenging scenario with significant year-on-year volume and decline.

Sergio Faifman: Our business, delivery in the second quarter and assessment EBDI margin expansion.

Sergio Faifman: Driven by our constant focus on feasibility and cost control initiative.

Sergio Faifman: This demonstrates our strong capability for efficiency and flexibility in adapting the challenging scenarios.

Sergio Faifman: Fortunately, we are starting to see a gradual but consistent recovery in cement volumes. But before tiling into the detail of the industry, let's review the financial highlights of the quarter. As I mentioned before, in the second quarter, Loma has demonstrated resilience and its operational and competitive strengths. Our top line stood at 166.1. The consolidated assessment ABDA reached $51 million or 38 billion pesos in the second quarter, only down 11.7% despite the hard drop of voting despise. This assault was possible due to the good expansion of the BDA in Marching of the cement segments. The consolidated ABDA in Marching to 28.1%, expanding 520 basis points year-on-year.

Sergio Faifman: Fortunately, we are starting to see a gradual but consistent recovery in cement volumes. But before diving into the detail of the industry, let's review the financial highlights of the quarter.

Sergio Faifman: As I mentioned before, in the second quarter, Loma has demonstrated resilience and its operational and competitive strengths.

Sergio Faifman: Our top line stood at 166.1 billion pesos, decreasing 28% in the quarter, with cement volume down 32.5%.

Sergio Faifman: The consolidated adjustment FBDA reached $51 million or $38 billion pesos in the second quarter, only down 11.7% despite the hard drop of volume dispatch.

Sergio Faifman: This assault was possible due to the good expansion of the VDI margin of the cement segment.

Speaker Change: pro the concsolidated ebitd marchin to twenty eight point one percent expanding five hhundredary twenty basic points year-on years

Sergio Faifman: In the same sense, ABDA per tone reached the trademark figures of $45, up 23% year-on-year and 15% on the second devices. On the financial side, our balance sheets remain strong with net depth of $270 million.

Sergio Faifman: In the same sense, EBDI per ton reached the red mark figures of $45, up 23% year-on-year and 15% on the secondary devices.

Sergio Faifman: On the financial side, our balance sheets remain strong, with net debt of $270 million.

Sergio Faifman: On the upcoming quarter, we'll less the mining capital needs. We will use our cash generation to gradually reduce our short-term pesos' internet.

Sergio Faifman: On the upcoming quarter, with less demanding capital needs, we will use our cash generation to gradually reduce our short-term pesos indebtedness.

Marcos Gradin: I will now hand off the call to Marcos Gradin, who will look for our market review and financial results. Please, Marcos, go ahead. Thank you, Sergio.

Marcos Gradin: I will now hand over the call to Marcos Gradin, who will work with you for our market review and financial results. Please, Marcos, go ahead.

Marcos Gradin: Good morning, everyone. Please turn to slide four. As shown in the chart on the lower left, the central bank market's expectations report suggests that the economy might have experienced its most significant quarterly downturn in the first quarter of this year, with a more optimistic forecast for the second half. When we examine the figures for our industry, the construction activity indicator reveals a gradual improvement after hitting a low in March. The monthly 7.6 charts for the industry reflect the same pattern of continuous sequential recovery. Even though June seems to break the trend when removing the effect of fuel and working dates during the month, the average daily dispatches show that the positive trend is in place.

Sergio Faifman: Thank you, Sergio. Good morning, everyone. Please turn to slide four. As shown in the chart on the lower left, the Central Bank Market Expectations Report suggests that the economy might have experienced its most significant quarterly downturn in the first quarter of this year, with a more optimistic forecast for the second half. When we examine the figures for our industry, the Construction Activity Indicator reveals a gradual improvement after hitting a low in March. The monthly seven sales chart for the industry reflects the same pattern of continuous sequential recovery. Even though June seems to break the trend when removing the effect of few working dates during the month, the average daily dispatches show

Marcos Gradin: Additionally, the July data suggests we are reaching a new level for the second half of this year. The macroeconomic conditions remain challenging, but as economic variables stabilize, the industry can find a solid foundation for growth. The industry's bulk-semined dispatches remain the most affected by this contact, down 41% year-on-year, while backsemin posted a contraction of 24%. When looking at the breakdown by dispatch mode for the quarter, bulk shipments represent 39% of the total dispatches, while the bulk format gained trend, reaching 61%, 6% points above the second quarter of 2023. Turning to slide 5 for our review of our top-line performance by segment.

Sergio Faifman: that the positive trend is in place. Additionally, the July data suggests we are reaching a new level for the second half of this year. The macroeconomic conditions remain challenging, but as economic variables stabilize, the industry can find a solid foundation for growth. The industry's bulk cement dispatches remain the most affected by this context, down 41% year on year, while bulk cement posted a contraction of 24%. When looking at the breakdown by dispatch mode for the quarter, bulk shipments represent 39% of the total dispatches, while the bulk format gained terrain, reaching 61%, six percentage points above the second quarter of the year.

Sergio Faifman: 2023. Turning to slide 5 for a review of our top line performance by segment. The first quarter top line show a decrease of 28% mainly due to a lower top line performance of the cement business followed by the rest of the segments. The cement, masonry cement and line segment was down 26.1% with volumes contracting 32.5% year on year. The decline in volume was partially offset by a strong price performance. Although the contraction affected both dispatch modes, bulk cement was hit the hardest. In our bulk client segmentation, industry and construction companies remained significantly down.

Marcos Gradin: The first quarter top-line shows a decrease of 28%, mainly due to a lower top-line performance of the 7th business, followed by the rest of the segments. The 7th measure of 7th and 9th segment was down 26.1%, with volumes contracting 32.5% year-on-year. The decline in volume was partially upset by a strong price performance. Although the contraction affected both the dispatch modes, bulk cement was hit the hardest. In our bulk, client segmentation, industry and construction companies remain significantly down, while public works only began to show some early signs of activity towards the end of the 45% decrease in the dispatches.

Sergio Faifman: following the trend of the concrete segment. Finally, railroad revenues decreased by 14.5% in the quarter. Transported volumes were down 22.5%, primarily after...

Marcos Gradin: The type of projects that are the core of our business are still lagging behind in terms of activity reactivation. Hybrid segment shows a decrease of 36%, with a volume down 25%, following the trend of the concrete segment. Finally, railroad revenues decreased by 14.5% in the quarter. Transported volumes were down 22.5%, primarily affected by the lower level of activity in the construction sector, partially compensated by improvements in transported volumes of raxan and grains. The positive price dynamics also helped compensate for the lower volume. Moving on to slide 7, the consolidated graph profit for the quarter declined 18.1% with emerging expansion of 329 basis points to 27% that partially offset the volume contraction on our core business.

Sergio Faifman: affected by the lower level of activity in the construction sector, partially compensated by improvements in transported volumes of raxan and grains. The positive price dynamics also help compensate for the lower volume. Moving on to slide 7, the Consolidated Gross Profit for the quarter declined 18.1% with a margin expansion of 329 basis points to 27%, that partially offset the volume contraction on our core business. Regarding the seventh segment, the favourable price trend and strict cost management, along with reduced depreciation, partially mitigate the impact of lower sales volume.

Marcos Gradin: Regarding the cement segment, the favorable price trend and strict cost management, along with reduced appreciation, partially mitigate the impact of lower sales volume. Concerned in the cost of cement sales, the technical usage in the quarter. was mostly produced during the warm-up month when energy inputs were lower. To mitigate higher energy costs and a potential natural gas shortage, most of our kins were shut down during this quarter. We plan to utilize our clinker stock and spring, at which point we will restart kill operations. In terms of electrical energy, the company decreases energy requirements by halting the primary branding phase on the cement production process.

Sergio Faifman: The cost of 7 cells, the clinker used during this quarter

Sergio Faifman: was mostly produced during the warmer months when energy inputs were lower. To mitigate higher energy costs and a potential natural gas shortage, most of our kilns were shut down during this quarter. We plan to utilize our clinker stock until spring, at which point we will restart kiln operations. In terms of electrical energy, the company decreased its energy requirements by halting the primary grinding phase on the cement production process. This enabled us to increase the proportion of renewable energy in our matrix to 61%, up from 36% in the second quarter of 2023, consequently reducing energy costs.

Marcos Gradin: This avalanche increased the proportion of renewable energy in our matrix to 61%. Half from 36% in the second quarter of 2023, consequently reducing energy costs. Railroad also show a margin expansion, while concrete and aggregates, both the significant contraction, as the segments were more affected by a current context. Finally, while SDNA expenses decrease sharply by 28.5%, mainly due to lower salaries and decreasing turnover tax and freight costs related to lower volume and a decreasing insurance cost. As a percentage of sales, it remains flat at 9.4% despite the decrease in the top line. Please turn to slide 8.

Sergio Faifman: Railroad also show a margin expansion, while concrete and aggregates posted significant contraction, as these segments were more affected by the current context. Finally, while SG&A expenses decreased sharply by 28.5%, mainly due to lower salaries, a decrease in turnover tax and freight costs related to lower volume, and a decrease in insurance costs. As a percentage of sales, it remains flat at 9.4% despite the decrease in the top line. Please turn to slide 8. Our consolidated adjusted EBITDA for the quarter stood at US$51 million. In pesos, adjusted EBITDA was $2.5 million.

Marcos Gradin: Our consolidated adjusted EVDA for the quarter stood at 51 million US dollars. In pesos adjusted, the VDA was down 11.7%, reaching 38 billion pesos with a consolidated EBDA margin of 28.1%, showing an expansion of 520 basis points year on year. On a sequential basis, the margin show an even higher increase, jumping 552 basis points. Seventh segment adjusted the VDA margins to that 31.5%, expanding 565 basis points. The positive bribe performance at tight cost management and better energy inputs mitigates the lower sales volume. In a per ton basis, EVDA reached 45 dollars per ton, increasing 22.6% year on year.

Sergio Faifman: down 11.7%, reaching 38 billion pesos with a consolidated EBITDA margin of 28.1%, showing an expansion of 520 basis points year-on-year. On a sequential basis, the margins show an even higher increase, jumping 552 basis points. Seventh segment adjusted EBITDA margins stood at 31.5%, expanding 565 basis points. The positive price performance, a tight cost management and better energy inputs mitigates the lower sales volume. In a per ton basis, EBITDA reached $45 per ton, increasing 22.6% year-on-year.

Marcos Gradin: Concrete adjusted the VDA decrease 1.1 billion pesos compared to the same quarter of last year, with a margin contraction of 796 basis points, reaching minus 5%. It is primarily due to the sharp drop in at the recovery of these types of works that are target by these segments are still lagging behind the recovery. The adjusted VDA margin of aggregates contracted to minus 10.8% from 5.3% in the second quarter of 2023, mainly due to lower volumes, lower fixed cost absorption, and a price performance affected by product mix. Finally, the adjusted VDA margin of the rail row segment expanded by 153 basis points in the quarter to 6.3%, primarily due to the positive bribe performance and boosted by increase on the average transported distance.

Speaker Change: yearconcrete adjusted decrease one point one billion p compared to the same quarter of last year margin contrction of seven hundred ninety six basis points which in minus five percent is primaryily to the sharp drop in this patches that the recovery of the these types of works that are target by these segments are still likein bekind the recovery the justeted v m margin of aggregates contracted to minus ten point eight percent from five point fifty percent in the second quarter of two thousand and twent three mainly due to lower volumes low er fix cff up abortion and price performance affected by of

Speaker Change: finally the jet margin of the r segment expanded by hundred fifty three basis poin the border to six point three percent peralily due to the positive performance and bosted by ingree on the average transported distance moving going to the bottom line of slightide that this quarter we posted that net profits of tribut to owners of the company of twenty nine point six billion pof compared to an profit of nine point five billion pes in the second quarteroftwo thousand fifty three the solid operation of performance bybr volumes and a higher overall financial gang account for the improved results financially that

Marcos Gradin: Moving on to the bottom line of slide 10, this quarter we posted a net profit attributed to owners of the company of 29.6 billion pesos compared to a net profit of 9.5 billion pesos in the second quarter of 2023. The solid operational performance, despite reduced volumes and a higher overall financial gains, accounts for the improved results. Financially, the positive effect of inflation on the net monetary position is a primary factor for this variation, along with a reduced impact from exchange rate difference due to the reduced pace of the valuation, a lower net financial cost. However, this gain was partially upset by an increase in income tax expenses.

Sergio Faifman: The positive effect of inflation on the net monetary position is a primary factor for this variation, along with a reduced impact from exchange rate difference due to the reduced pace of devaluation and lower net financial cost. However, this gain was partially offset by increases in income tax expenses. Moving on to the balance sheet, as you can see on slide 11, we entered the quarter with a net debt of 118 billion pesos. Consequently, our net debt to EBITDA ratio stood at 1.26 times compared to 1.4 times at the end of 2023, maintaining a comfortable indebtedness position.

Marcos Gradin: Moving on to the bonus sheet, as you can see on slide 11, we ended the quarter with a net depth of 118 billion pesos. Consequently, our net debt to a VDA ratio stood at 1.26 times compared to 1.4 times at the end of 2023, containing a call for trouble in the evidence position. Our operating activities cash generations to that 16 billion pesos compared to a cash generation of 44% billion in the same period of 2023, where the decrease is managed due to a lower rated performance, a higher working capital needs. Our clinical inventories will mostly be used during the winter seasons, when most of the gains will remain shut down.

Marcos Gradin: Regarding capital expenditures, we allocated 16.3 billion pesos mostly for maintaining topics and for the 25 kilos back projects. During the quarter, the company used 2.1 billion pesos in financial activities, primarily for interest payments, which were mostly upset by proceeds from borrowing net of repayment. In dollar terms, our total debt reached 220 million dollars, standing our net debt at 217 million dollars at the end of the quarter. With our duration of 1 year, breaking it down by currency, the dollar-renominated debt represents 63% of the total debt, while the rest is in pesos. The company will address the maturity of the class world bond issued in pesos during the 3rd quarter.

Marcos Gradin: As the second half of the year requires less capital due to the duration of stocks during the winter, we will meet a short-term obligation with our cash generation and our bank credit lines.

Sergio Faifman: Now, for our final remarks, I would like to handle the call back to search you. Thank you. Thank you, Marcos.

Marcos Gradin: Thank you, Marcos. Now, to finalize the presentation, I would please ask you to turn to slide 13.

Marcos: Thank you Marcos no casino likes the presentation I. Please ask you to just light therapy.

Sergio Faifman: Now, to finalize the presentation, I please ask you to turn to slide 13. Following a challenge start today year, where the macro environment had a significant impact on the 70 patch, the second quarter, the start to show clear things of recovery, which have continued to strengthen in the recent months, which will now be very promising. By leveraging our expertise and operational efficiencies, Loma achieved another reduced quarter by notable margin growth. We are hopeful that the activity level will maintain the energy recovery trajectory. With the stabilization of crucial economic factors, including a significant reduction in inflation and mention among the attractive foreign direct investment, among other initiatives, we are confident that the construction industry has a remarkable opportunity on the horizon.

Operator: for conference call and webcast. Our participants will be in the Sonoma mode. Should you need assistance, please send to our conference festivities for repressing the star key followed by zero.

Speaker Change: For the Italian startup today, yet what the macro environment. It seems like that the impact on the 70, but that's it.

Operator: After today's presentation, there will be an opportunity to ask questions. Also, Mr. Sergio Faifman will be responding in Spanish immediately following in English translation. To ask a question, you may press star then one on your telephone keypad. To try a question, please press star then two.

Speaker Change: Quote that it's got to show clear.

Speaker Change: Kobe, which have continued to think in that sense months, which lie.

Speaker Change: Being very promising.

Sergio Faifman: By leveraging our expertise and operational efficiencies, Loma achieved another robust quarter of notable margin growth. We are hopeful that the activity level will maintain the ecological recovery trajectory. Finally, I would like to thank all our employees for their commitments and extend my gratitude to the rest of our stakeholders.

Speaker Change: By leveraging our expertise on our petition on efficiencies noma achieved another boost quarter like not much you can grow.

Speaker Change: We are hopeful that the activity level, we maintained and Golar she co very touchy feely.

Speaker Change: With the evolution of crucial economic factors employee I think they do shut in inflation and mission.

Operator: Please note, this event is being recorded.

Sergio Faifman: But I keep quoting direct investment among other initiatives. We are confident that the construction industry has got the mitral opportunity on the horizon.

Diego Jalon: I would now try to comment so that Mr. Diego Jalon, head of investor relations. Please here, Diego, go ahead. Thank you.

Sergio Faifman: Finally, I would like to thank all our employees for their commitment and extend my gratitude to the rest of our stakeholders.

Sergio Faifman: Good morning and welcome to Loma Negra's earnings conference calls. By now, everyone should have access to our earnings press release and the presentation for today's calls, both of which were distributed yesterday after market close. Joining me on the call this morning will be Sergio Faifman, our CEO and vice president of the board of directors, and our CFO Marco Rodin. Both of them will be available for the Q&A session.

Sergio Faifman: Finally, I would like to thank all our employees for their commitment and extend my gratitude to the rest of our stakeholders.

Sergio Faifman: This is the end of our prepared remarks. We are now ready to take questions. Operator, please open the call for questions.

Speaker Change: This is the end of our prepared remarks, we are now ready to take questions. Operator, Please open the call for questions.

Sergio Faifman: 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.

Operator: Yes, thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star then 1 on your telephone keypad. A confirmation tone will indicate that your line is in. You may press star then 2 if you would like to remove your line. For participants using speaker equipment, it may be necessary to pick up your handset prior to pressing a key. Also, please note that Mr. Sergio Faifman will be responding in Spanish immediately following an English translation. Please hold momentarily while we assemble our roster.

Operator: Yes, thank you.

Speaker Change: Yes. Thank you we will now conduct a question and answer session. If you would like to ask a question. Please press Star then one on your telephone keypad.

Operator: We will now conduct a question and answer session. If you would like to ask a question, please press star, then one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star then two if you would like to remove your line. For participants using speaker equipment, it may be necessary to pick up your hands up prior to pressing a key. Once again, star then one on your telephone keypad.

Operator: Confirmation tone will indicate that your line is in the question queue.

Operator: You May press Star then two if you would like to remove your line.

Sergio Faifman: This conference call will also include discussion on non-GAAP financial measures. The full reconciliation of the corresponding financial measures is included in the earnings press release.

Speaker Change: What percent using speaker equipment and may be necessary to pick up your handset prior depressing. The key once again Star then one on your telephone keypad. We'd also like to ask you. Please limit your questions to one question and one follow up. Please if you have additional questions you may re queue for those questions and they will be addressed also please note that with the sale of five.

Operator: We'd also like to ask you, please name your question to one question and to one follow-up. Please, if you have additional questions, you may re-cue for those questions, and they will be addressed. Also, please note that the Cecil V.

Sergio Faifman: Now, I would like to turn the call over to Sergio. Thank you, Diego. Hello, everyone, and thank you for showing us this morning.

Operator: Mann will be responding to Spanish immediately following the English translation. Please hold momentarily by way of some of our roster.

Sergio Faifman: I would like to start on my presentation by the occasion the highlights of the quarter. Then, Marco, we take you for our market review and financial result. Following that, I will share some final remarks before opening the call to your question. Starting with slide two. We are glad to report another set of solid results. After starting the year, in a very challenging scenario, we significant year-to-year volume decline. Our business delivery in the second quarter and a certain everyday margin expansion, driven by our constant focus on free-tability and cost-control initiative. This demonstrates our strong capital-ability for efficiency and flexibility in adapting the challenging scenarios.

Sergio Faifman: We are responding the Spanish immediately following an English translation.

Operator: Please hold momentarily.

Operator: Roster.

Paul Smith: And the first question comes with Paul Smith with UBS. I would want to actually take some back of our letter to the various issues from there on our network.

Speaker Change: And the first question comes with Paul Smith with UBS.

Operator: Hi.

Speaker Change: One actually.

Speaker Change: Since you've swapped out.

Alberto Valério: Thank you, Sergio Macrius and David, for participating in the pressure heading to. The first one is about July volumes and price. We see much better print for the month. We do; it's a trend, or it was one month. And if you permit my second question, it's about margins. In terms of, we see volumes dropping strong, more than 10% over year, but we see margin increase.

Speaker Change: Oh I'm sorry.

Speaker Change: Surgery partners.

Speaker Change: Actually I had two the first one it's.

Speaker Change: It's about the July price yeah, much better.

Operator: Uh huh.

Operator:

Sergio Faifman: The trends all worked out well.

Speaker Change: And my second question, it's about margins.

Speaker Change: Theyre himself.

Speaker Change: She volumes dropping.

Sergio Faifman: Fortunately, we are starting to see a gradual but consistent recovery in cement volumes, but before tiling into the detail of the industry, let's review the financial highlights of the quarter. As I mentioned before, in the second quarter, Loma has demonstrated resilience and its operational and competitive strengths. Our top line stood at 166.1 The consolidated assessment ABDA reached $51 million or 38 billion pesos in the second quarter, only down 11.7% despite the hard drop of voting despise.

Sergio Faifman: The strong.

Speaker Change: Year over year, what do you see margin increase.

Sergio Faifman: My question is, is it sustainable for the future with an amazing job done for you guys in terms of and its savings during the very on the summer that I'd like to see for the future if you can keep on the space or if you could see some of the levels or margins. Thank you very much.

Speaker Change: My question is.

Speaker Change: Is it sustainable for the future.

Speaker Change: Oh, maybe.

Operator: Job one.

Speaker Change: For you guys.

Speaker Change: Oh I see.

Operator: Yeah.

Operator: Sorry.

Speaker Change: It's out there.

Speaker Change: But they'd like to see for the future.

Speaker Change: Can keep your office H R.

Operator: Sure.

Sergio Faifman: Thank you very much.

Sergio Faifman: Hi, Alberto. Thank you for the question. As you have seen, I had a very interesting recovery from the volume shows in June. We believe that this trend is going to continue with similar volumes of the water we saw in July. We believe that, due to several steps we have achieved in Argentina, we are reaching a new level of dispatches. In the stability of the inflation, some recover in the level of salaries, the average has changed, the consolidation of a low inflation, the gap between the taxes and some of the factors that are improving the situation.

Operator: Hi.

Sergio Faifman: Thank you for the question.

Speaker Change: No luminary Julio do we don't have certain important anymore.

Operator: Julio.

Sergio Faifman: Volume for July So you have seen a very interesting recovery from the volume show in June.

Sergio Faifman: This assault was possible due to the good expansion of the BDA in Marching of the cement segments. The consolidated ABDA in Marching to 28.1% expanding 520 basis points year-on-year. In the same sense, ABDA per tone reached the trademark figures of $45, up 23% year-on-year and 15% on the second devices. On the financial side, our balance sheets remain strong with net depth of $270 million. On the upcoming quarter, we'll less the mining capital needs. We will use our cash generation to gradually reduce our short-term pesos' internet.

Speaker Change: Global luminary, but they want to eat in and its a new ATM at that point you made earlier, we believe that this trend is going to continue with similar volume something once that we saw in July.

Sergio Faifman: We believe that due to a series of reasons that were happening in Argentina, a new step has been achieved in the lawsuit.

Speaker Change: A he could aim of the border.

Speaker Change: The more people can put them to see them in a casino C. It's yellow without more Cologne.

Speaker Change: We believe that a Youtube several steps that we have achieved.

Sergio Faifman: Dina.

Sergio Faifman: A new level of dispatches.

Sergio Faifman: The stability of inflation, some recovery in the level of wages, and the exchange rate gap that is coming back.

Speaker Change: Net I really don't have any plus yarn I wonder who paid on and you were just highlighting yields.

Speaker Change: Now what do you check them the idea okay, well you all.

Sergio Faifman: The consolidation of our global inflation the gap between Texas.

Sergio Faifman: Hum.

Sergio Faifman: are some of the factors that are improving the situation in Argentina.

Speaker Change: Or are some of the factors that or improving the situation in Argentina, we got a good bit of somebody's highlight your E. Nobody shouldn't they know what great to see but the guy you can be anything, but I'm gonna country, most of them in their recovery or real wages and and the increase in credit, especially in.

Marcos Gradin: I will now hand off the call to Marcos Gradin, who will look you for our market review and financial results. Please Marcos, go ahead. Thank you, Sergio.

Sergio Faifman: The recovery of real wages and the increase in credit, especially in mortgage loans, are also factors that are boosting the dispatches. We are starting to see some moderate increases in the level of activity of public works, but we expect to see that trend also improving in the second semester. We believe that it will improve in the upcoming months. In terms of price, the last quarter is similar to the price we are having and that we are still having. With those in prices, we expect to maintain this level of prices. In terms of price, we need to have multiple factors of exchange, inflation, internal inflation of costs.

Sergio Faifman: The recovery of real wages and the increase in credit, especially mortgage loans, are also factors that are boosting the economy.

Marcos Gradin: Good morning, everyone. Please turn to slide four. As shown in the chart on the lower left, the central bank market's expectations report suggests that the economy might have experienced its most significant quarterly downturn in the first quarter of this year, with a more optimistic forecast for the second half. When we examine the figures for our industry, the construction activity indicator reveals a gradual improvement after hitting a low in March. The monthly 7.6 charts for the industry reflects the same pattern of continuous sequential recovery.

Sergio Faifman: Mortgage loans.

Speaker Change: Two factors with our boosting the dispatches, but he hasn't before.

Sergio Faifman: We are just beginning to see some public works, but still without an important impact.

Speaker Change: Nishu poorly capital 12, yet seen an impact in Burbank.

Sergio Faifman: We are starting to see some moderate increases in the level of activity of public works. We expect to see that trend also improve in the second semester.

Sergio Faifman: We are starting to see some some moderate increases in the in the level of activity of public works.

Sergio Faifman: But we.

Sergio Faifman: We expect to see that trend also are improving in the second center game market.

Sergio Faifman: I should point out we believe that yeah, it will improve in.

Marcos Gradin: Even though June seems to break the trend when removing the effect of fuel and working dates during the month, the average daily dispatches show that the positive trend is in place. Additionally, the July data suggests we are reaching a new level for the second half of this year. The macroeconomic conditions remain challenging, but as economic variables stabilize, the industry can find a solid foundation for growth. The industry's bulk-semined dispatches remain the most affected by this contact, down 41% year-on-year, while backsemin posted a contraction of 24%. When looking at the breakdown by dispatch mode for the quarter, bulk shipments represent 39% of the total dispatches, while the bulk format gained trend reaching 61%, 6% points above the second quarter of 2023.

Sergio Faifman: In the coming months.

Speaker Change: But if you're in and you will get pressure be dwindling and alert them of course.

Speaker Change: Yes, you mean that this will be somewhat of an integrated you could say, it's almost even handle regarding.

Speaker Change: Regarding prices, we expect to maintain good cattle prices.

Speaker Change: What did you guys in particular skin machine medical Mcdonald's can make a medical facility.

Speaker Change: People have gotten because you're all interested in.

Sergio Faifman: The Gulf Coast.

Sergio Faifman: Our policy regarding the prices, as we always say, it follows different issues as the effects, but also the evolution of our internal costs. We are not seeing changes in this strategy for the next months, and we are not seeing any changes in this strategy for the future.

Speaker Change: Our political regarding regarding prices as we always say hit for those different issues.

Speaker Change: Uh huh effects, but also the evolution of our internal costs that won't be in the company and they said that they keep it up at a particular message and we are not seeing any change in the strategy for the for the future, but the amount of connected MLK boy I laid out.

Sergio Faifman: On the other hand, we believe that we can see a point of impact in the months of the summer because of the issue of fuel. We got involved in margins, even though we might see some impact in the upcoming quarter due to thermal energy. We should be very clear and always remember that the contracts that we have already closed for October, October of the year, are much lower than we had in the previous quarter. But this effect must be very soft with respect to a huge change there. Also, we have to consider that in September, we are going to start using the contract that we have already signed, and this contract showed a very significant decrease from the levels of the energy imposed that we have been using.

Sergio Faifman: On the side of margins, we believe that there may be some...

Speaker Change: I I love them.

Marcos Gradin: Turning to slide 5 for our review of our top-line performance by segment. The first quarter top-line shows a decrease of 28%, mainly due to a lower top-line performance of the 7th business, followed by the rest of the segments. The 7th measure of 7th and 9th segment was down 26.1%, with volumes contracting 32.5% year-on-year. The decline in volume was partially upset by a strong price performance. Although the contraction affected both the dispatch modes, bulk cement was hit the hardest.

Speaker Change: When do I in bulk Jordan, let me says it'll even be able to put it on the T V.

Sergio Faifman: Regarding margins, even though we might see some impact in the upcoming quarter due to the huge change there, and also you have to consider that in September we are going to start using the contract that we already signed, and this contract showed a very significant decrease from the levels of the energy inputs that we had before.

Sergio Faifman: Regarding our margins, even though we might see some impact in the coming quarter due to a seven.

Speaker Change: Several energy yes.

Speaker Change: It had a malaria ECM product go to them okay.

Speaker Change: Redbook Asia salary, but its really got but well do it.

Speaker Change: So I Wonder where you said you already started doing most of the quarter could you pick up vessels, but this effect must be baby herself.

Sergio Faifman: But a huge change there and Oh, so you have to consider that.

Marcos Gradin: In our bulk, client segmentation, industry and construction companies remain significantly down, while public works only began to show some early signs of activity towards the end of the 45% decrease in the dispatches. The type of projects that are the core of our business are still lagging behind in terms of activity reactivation. Hybrid segment shows a decrease of 36%, with a volume down 25%, following the trend of the concrete segment. Finally, railroad revenues decreased by 14.5% in the quarter.

Sergio Faifman: In September we are going to start using that.

Sergio Faifman: Contract that we already signed and this contract shows a very significant decrease from the from the metal itself. The energy inputs that we have been using.

Speaker Change: So Daniel Morgan, though maintaining into American mace all.

Sergio Faifman: Cause immune to live it out but it would be more work. So for the rest of the year, we are expecting to maintain those margins and how do you even see some improvement in the.

Sergio Faifman: So, for the rest of the year, we are expecting to maintain our margins and even see some improvement in the fourth quarter of the year.

Sergio Faifman: In the fourth quarter.

Sergio Faifman: Whichever.

Operator: officer. End

Speaker Change: I'll, let somebody books right.

Operator: Sponsored ADR

Operator: Yes.

Marcos Gradin: Transported volumes were down 22.5% primarily affected by the lower level of activity in the construction sector, partially compensated by improvements in transported volumes of raxan and grains. The positive price dynamics also helped compensate for the lower volume. Moving on to slide 7, the consolidated graph profit for the quarter decline 18.1% with emerging expansion of 329 basis points to 27% that partially offset the volume contraction on our core business. Regarding the cement segment, the favorable price trend and strict cost management, along with reduced appreciation, partially mitigate the impact of lower sales volume.

Speaker Change: Thank you. Thank you and our next question comes from every Entertainment Gladstone Securities.

Operator: Yeah.

Marina Mertens: Thank you, and the next question of recovery.

Marina: Hi, good morning. Thanks for taking my question. You mentioned that you expect the recent uptick in activity to continue during the second half of the year. What do you believe will be the main drivers of recovery? Will it be the resumption of public works or private projects? And could the approval of the RE have any positive impact on cement dispatches?

Speaker Change: Hi, good morning, Thanks for taking my question.

Speaker Change: You mentioned that the recent uptick in activity to continue doing what they say about half of the year. What do you believe it will be the main grades aren't suffering calling when he'd be the resumption of public works, our fragrance crush it and could you provide that to you.

Marina Mertens: Could it be the resumption of public works or private projects, and could the approval of the RE have any positive impact on seven discrepancies? Hi, Marina. Thank you for your question. The drivers are a little bit of what we impact more in private works than in public works. We believe in the next two weeks we are going to see what the implementation for the REGY program, and there are several percent of minors and other types of projects, possibly with the REGY and PSN, the work that we have been working on to advance our projects, especially in the mining sector that are standby, and probably with this new region, they will be ready to start.

Speaker Change: He has any positive impact on sentiment piece by piece.

Sergio Faifman: Hi Marina, thank you for the question. The drivers are the ones we just talked about. They are impacting more on the private sector than on the public sector.

Mike: Hi, Mike.

Speaker Change: Before you bought them.

Speaker Change: But what else could come in Tomorrow T N a an impact on the Matson will begin to go vertical notably laid out yeah, we didn't know what happened with nickel.

Sergio Faifman: The drivers are the ones that we just mentioned, and they are impacting more in private works than in public works. Segn lo que entendemos, in the next two weeks, the regulation of RIGI should be ya. As we believe, in the next two weeks, we are going to see what the regulation for the RIGI program is.

Speaker Change: Are the once that we just mentioned.

Sergio Faifman: Mention and they are impacting.

Marcos Gradin: Concerned in the cost of cement sales, the technical usage in the quarter, was mostly produced during the warm-up month when energy inputs were lower. To mitigate higher energy costs and a potential natural gas shortage, most of our kins were shut down during this quarter. We plan to utilize our clinker stock and spring, at which point we will restart kill operations. In terms of electrical energy, the company decreases energy requirements by halting the primary branding phase on the cement production process.

Sergio Faifman: Impacting more in.

Speaker Change: That work's done in them.

Speaker Change: And one of them most of them go to my whole she might argue with your thought on salary let me touch on the leasing.

Sergio Faifman: We believe in the next.

Speaker Change: Two weeks, you're going to see what's in there.

Sergio Faifman: Limitation for the for the Wuxi program.

Sergio Faifman: And there are several mining projects and other types that, possibly, with the RIGI, will begin the work that we have already had conversations about advancing.

Speaker Change: Yeah, you are ideal for a ship dominated book capable shulamit into lithium P. S. N a lateral without cachet malls can you help them better schoeneck.

Sergio Faifman: And there are projects, especially in the mining sector, that are on standby, and probably with this new regime, they will be ready to start.

Marcos Gradin: This Avalanche increased the proportion of renewable energy in our matrix to 61%. Half from 36% in the second quarter of 2023, consequently reducing energy costs. Railroad also show a margin expansion, while concrete and aggregates, both the significant contraction, as the segments were more affected by a current context. Finally, while SDNA expenses decrease sharply by 28.5%, mainly due to lower salaries and decreasing turnover tax and freight costs related to lower volume and a decreasing insurance cost. As a percentage of sales, it remains flat at 9.4% despite the decrease in the top line.

Speaker Change: And there are projects, especially in the mining sector standby and probably we did when these new regime.

Speaker Change: We are ready to start.

Sergio Faifman: And to put a lull in Lea County border.

Speaker Change: <unk> only got a little kick tandem to handle them mentally if you need to keep with the guy to UK or we ended up with them okay.

Speaker Change: Do you maintain it'll show you just haven't been able to do a lifestyle approach wellness, so with the Wuxi and and also we did a two day increase in credit lines.

Sergio Faifman: So with the REGY and also with the increase in credit lines, and with the start of several private works that we have been seeing in the past few weeks or months, are the pillars that we expect to see the future work to sustain with.

Speaker Change: Hum and why don't we just start to separately present works that we have been seen in the past.

Sergio Faifman: A few weeks or months.

Sergio Faifman: Hum.

Sergio Faifman: The PDR that we expect to see the future growth is sustainable.

Marcos Gradin: Please turn to slide 8. Our consolidated adjusted EVDA for the quarter stood at 51 million US dollars. In pesos adjusted the VDA was down 11.7%, reaching 38 billion pesos with a consolidated EBDA margin of 28.1%, showing an expansion of 520 basis points year on year.

Sergio Faifman: Thank you.

Operator: Thank you. And the next question comes from our software on with Hitao BBA.

Speaker Change: Thank you and the next question comes from myself, along with <unk> BBA.

Operator: Okay.

Marcelo: Hi Sergio, hi Marcos, hi everyone. Thanks for taking my question here. I have two.

Hitao BBA: Hi, Sergio Hi, Mark was hi, everyone. Thanks for taking my question here I had two the first is related to capital allocation.

Marcelo: And the next question comes from I have two. The first is related to capital rotation. I mean, the company has been able to deliver to this and for those during the first half of this year, despite the economic had wins and so on. And also the company is to have a strong and healthy capital structure. So I'd like to understand in terms of capital rotation, what are the companies or management's views regarding dividends and caps for these years.

Marcelo: The first is related to capital allocation. I mean, the company has been able to deliver decent results during the first half of this year despite the economic headwinds and so on. And also, the companies still have a strong and healthy capital structure. So I'd like to understand, in terms of capital allocation, what are the company's or management's views regarding dividends and capex for this year? So this is my first question.

Speaker Change: Company has been able to deliveries to decent results during the first half of this year. Despite the economy had the Winchester one.

Marcos Gradin: On a sequential basis, the margin show an even higher increase jumping 552 basis points. Seventh segment adjusted the VDA margins to that 31.5%, expanding 565 basis points. The positive bribe performance at tight cost management and better energy inputs mitigates the lower sales volume. In a per ton basis, EVDA reached 45 dollars per ton, increasing 22.6% year on year.

Marcelo: And also the companies to have a strong and healthy capital structure. So I'd like to understand in terms of capital location, where the companys or managements views regarding D dance and Capex for 50 years. So this is my first question and the second question is related to market share you guys mentioned that you expect to maintain search price.

Marcelo: So this is my first question.

Marcelo: And the second question is related to market share. You guys mentioned that you expect to maintain such price levels for the second half of this year. So I'd like to understand how the company is thinking about maintaining its market share in the summit marketing, so these are my two questions. Thank you.

Marcelo: And the second question is related to market share. You guys mentioned that you expect to maintain surge price levels for the second half of this year. So I'd like to understand how the company is thinking about maintaining its market share in the summit market in Argentina. So these are my two questions. Thank you guys.

Marcelo: Slabaugh this fall for the second half of this year, so I'd like to understand how is the company thinking about maintaining eat so market share and to submit marketing nursing gena. So does that make two questions. Thank you guys.

Marcos Gradin: Concrete adjusted the VDA decrease 1.1 billion pesos compared to the same quarter of last year, with a margin contraction of 796 basis points, reaching minus 5%. It is primarily due to the sharp drop in at the recovery of these types of works that are target by these segments are still lagging behind the recovery. The adjusted VDA margin of aggregates contracted to minus 10.8% from 5.3% in the second quarter of 2023, mainly due to lower volumes, lower fixed cost absorption, and a price performance affected by product mix. Finally, the adjusted VDA margin of the rail row segment expanded by 153 basis points in the quarter to 6.3% primarily due to the positive bribe performance and boosted by increase on the average transported distance.

Sergio Faifman: Hi, Marcelo. Thank you for your question.

Sergio Faifman: Hi Marcelo. Thank you for the question. Comenza por la segunda pregunta.

Marcelo: Hi, Marcelo Thank you for the question.

Sergio Faifman: Comienzo por la segunda pregunta. I'm going to start with the second question. El nivel de precio y marqueciar son dos cosas que seguimos, obviamente, de la mano. The level of prices and market share are two things that we follow up close. Obviamente, el marqueciar tiene variaciones mensuales en un rango en el cual nos sentimos como tanto para arriba y un para abajo. And the market share obviously has monthly variations in a plus or minus variation where we feel comfortable, but no, no, no, tenemos una política de mejorar precio a costa de marqueciar, ya que en el largo plazo destruiría el valor de la compañía.

Speaker Change: Municipal water whenever they want that.

Sergio Faifman: I'm going to start with the second question.

Sergio Faifman: We are though I'm going to start with the second question.

Speaker Change: And you ended pretty automatically see out of some Osaka for hemophilia, a and <unk>.

Sergio Faifman: The level of prices and market share are two things that we follow up close. Obviously, the market share has monthly variations in a range in which we feel comfortable both up and down. And the market share obviously has monthly variations in a plus or minus variation where we feel comfortable.

Marcelo: The level of prices and marketshare.

Speaker Change: Things that we are follow up goes to the market. She had anybody I should've been flawless and Grand winners.

Sergio Faifman: <unk> talked about reopening, but a lot of cool and the market share obviously have a monthly variations yeah.

Speaker Change: Plus or minus variation, but we feel comfortable they don't know they didn't listen I believe you got a well that produced a corporate America, Seattle chicken and medical plus what it looked a little bit here, but we don't have a policy of a growing market share with a with a with lowering prices.

Sergio Faifman: But we don't have a policy of growing market share with low and prices because we believe that this will destroy value for the company in the long term.

Sergio Faifman: Growing market share with low end prices because we believe that this will destroy value for the company in the long term.

Marcos Gradin: Moving on to the bottom line of slide 10, this quarter we posted a net profit attributed to owners of the company of 29.6 billion pesos compared to a net profit of 9.5 billion pesos in the second quarter of 2023. The solid operational performance despite reduced volumes and a higher overall financial gains accounts for the improved results. Financially, the positive effect of inflation on the net monetary position is a primary factor for this variation, along with a reduced impact from exchange rate difference due to the reduced pace of the valuation, a lower net financial cost. However, this gain was partially upset by increase in income tax expenses.

Sergio Faifman: We believe that this will destroy value for the company in the long term, while I'm doing you any particular quarter.

Sergio Faifman: Con el cual tanto el nivel de precio de este quarter como el quarter siguiente siempre van a estar atados a un rango de marqueciar, el cual tomamos como lógico. So the price in this quarter and the prices as you will see in the future are going to be alongside a level of market share in where we feel comfortable.

Speaker Change: But he and the team, but it when it does happen.

Sergio Faifman: What went wrong with America Seattle.

Speaker Change: The memorial.

Sergio Faifman: The price in this quarter.

Sergio Faifman: And the prices that you will see in the future are going to be alongside a level of market share.

Sergio Faifman: We feel comfortable.

Sergio Faifman: Regarding capital allocation, in the next quarter, we have some maturities of short-term debt, and we expect to address that with Caja Generation and our short-term lines with the banks. As for Caja Generation, just like in the past years and onwards, we are looking at all the options that maximize value for the shareholders.

Sergio Faifman: En cuanto al capital location, los próximos meses tenemos a unos vencimientos de deuda que el mercado tenemos varias opciones para para un global regarding capital location. In the next quarter, we have some maturities of short-term debt, and we expect to address that with some cash generation and our short-term lines with the banks. En cuanto a la generación de caja, al igual que los últimos años y para adelante, estamos viendo todas las opciones que maximice el valor para los funcionistas. Regarding also capital location, we are seeing all the alternatives that might add value to the short holders.

Speaker Change: And gone through our capital allocation lottery submitted for animals and humans.

Speaker Change: Okay. Good.

Speaker Change: With animal studies have shown it but biofilm gorilla regarding capital allocation in the next quarter, we will have some maturities of our short term debt.

Marcos Gradin: Moving on to the bonus sheet, as you can see on slide 11, we ended the quarter with a net depth of 118 billion pesos consequently our net debt to a VDA ratio stood at 1.26 times compared to 1.4 times at the end of 2023, containing a call for trouble in the evidence position. Our operating activities cash generations to that 16 billion pesos compared to a cash generation of 44% billion in the same period of 2023, where the decrease is managed due to a lower rated performance, a higher working capital needs.

Sergio Faifman: We expect to address that.

Sergio Faifman: Some.

Speaker Change: Cash generation in other words short term lines with banks in countries like India Assembly Kochhar and what is the.

Speaker Change: Asahi newspaper, Atlanta, we entered Chile, Maximus and myeloid Pablo Sunshiny cause.

Sergio Faifman: And regarding capital allocation, we are seeing all the alternatives that might add value to the shareholders.

Speaker Change: Regarding oh, what could be the location we are seeing.

Speaker Change: Seen all those doughnut that might add.

Sergio Faifman: The value to the shareholders.

Sergio Faifman: With which, surely, in the next months, we will define, let's say, what will be the best allocation of that capital for what remains of the company. So in the upcoming months, we will decide.

Sergio Faifman: Con el cual, seguramente en los próximos meses definiremos y amos cuál será mejor a locación para ese capital para lo que queda ahí. So in the upcoming months, we will decide what is going to be the destiny of the cash generation of the second semester.

Speaker Change: So what I'm Gonna look, perhaps you might miss it if you need them or what do you see that.

Speaker Change: Okay sure, but if it got it got it got it okay.

Sergio Faifman: So, in the upcoming months, we will decide what is going to be the destiny of the cash generation for the second semester.

Sergio Faifman: So in the upcoming months, we will decide oh, but he's going to be the destiny of that Oh, if the cash generation of the second semester.

Marcos Gradin: Our clinical inventories will mostly be used during the winter seasons, when most of the gains will remain shut down. Regarding capital expenditures, we allocated 16.3 billion pesos mostly for maintaining topics and for the 25 kilos back projects. During the quarter, the company used 2.1 billion pesos in financial activities, primarily for interest payments, which were mostly upset by proceeds from borrowing net of repayment. In dollar terms, our total debt reached 220 million dollars standing our net debt at 217 million dollars at the end of the quarter. With our duration of 1 year, breaking it down by currency, the dollar-renuminated debt represents 63% of the total debt, while the rest is in pesos.

Sergio Faifman: Yeah.

Sergio Faifman: Thank you.

Marcelo: Okay, thank you so much guys, and congrats on the results.

Sergio Faifman: Thank you so much, you guys in Congress, on the results. Thank you.

Speaker Change: Okay. Thank you so much guys and congrats on the results.

Speaker Change: Thank you.

Marcelo: They work.

Alejandro Regan: And the next question comes around, Alejandro Regan, with Morgan Stanley. Hi, good morning, Laman. I think, thank you for taking my question.

Speaker Change: And the next question comes from Alexander <unk> with Morgan Stanley.

Caller: Hi, good morning, Loma Negra team. Thank you for taking my question. I was wondering if you could give us some color on the mix of your volumes, meaning bag versus bulk today, and where do you see that going towards 2025? And finally, when you talk about maintaining prices for the second half of the year, I was just curious if there's a mix effect embedded into that comment as you shift away from bag. Thank you.

Speaker Change: Hi, Good morning. Thank you for taking my question I was wondering if you can give us some color on the mix of your volumes, meaning back versus bulk today, and where do you see that going towards 2025, and finally, when you talk about maintaining prices for the second half of the year. Just curious if there's a mix effect embedded into that comment as you can see.

Alejandro Regan: I was wondering if you can give us some color on the mix of your volumes, meaning bag versus bulk today, and where do you see that going towards 2025.

Sergio Faifman: After that, I'm going to ask you to repeat the second question because we didn't actually get it. Regarding the first one, the percentages or the participation of BAC and bulk are within the historical parameters.

Alejandro Regan: And finally, when you talk about maintaining prices for the second half of the year, just curious if there's a mix effect, embed it into that comment as you shift away from back. Thank you.

Speaker Change: Away from that thank you.

Sergio Faifman: Okay.

Sergio Faifman: Hi Alejandra, thank you for the question. The first, the second, I ask you to repeat that you don't listen well. Con respecto a bolsa y granel, los porcentajes se mantienen. After that, I'm going to ask you to repeat the second question because we didn't actually get it. Regarding the first one, the percentages or the participation of BACs and BALC are within the historic parameters.

Sergio Faifman: Okay.

Marcos Gradin: The company will address the maturity of the class world bond issued in pesos during the 3rd quarter. As the second half of the year require less capital due to the duration of stocks during the winter, we will meet a short-term obligation with our cash generation and our bank credit lines.

Speaker Change: Thank you for the question.

Speaker Change: I like that but he might play.

Speaker Change: I Wonder if you look at a lot of pizza can own simple truth.

Speaker Change: Well they could come back to I want to take it on an 8% bucket simultaneous to me that is sort of a.

Speaker Change: The first study come in there.

Speaker Change: After that I wanted to ask you to repeat the second question because we didn't begin until you get it regarding the first one the.

Sergio Faifman: Now for our final remarks, I would like to handle the call back to search you. Thank you. Thank you, Marcos.

Speaker Change: Percentages or the participation box on both.

Speaker Change: Within the.

Speaker Change: He started parameters.

Sergio Faifman: Specifically, I would say, to go to a more specific number, yes, in the case of the stock market, there was a recovery in the months of June and July, which we believe has to do with this recovery in wages and new mortgage loans.

Sergio Faifman: Specifically, the idea of paraíra, a number of more concrete, seeing in the case of the de la bolsa, se vio una recuperación en los meses de junio Julio, que queremos tener el redonecto de recuperación de salarios, y no creemos hipotecarios, but in the case of actually what is happening in this past quarter, in June and July, we saw a recovery, a more sharp recovery of the BAC mode of this patch, and that should be due to the recovery of the real wages, and also the positive impact of the increased create lines and mortgage lines. Pedro, lo presentá que se mantienen, se senta por 100% bolsa, cuarenta por 100% ranel, como una varicione mensual, but the percentages are still 60% BALC, BACs and 40% BAC, with some minor variations month to month.

Speaker Change: I mean, the idea, but I eat a I know merrimack convertible see in industrial the level of subsidy old medical but if you look.

Sergio Faifman: Julio.

Speaker Change: They must be naked on it until they get paid a fee on that is allowed US you know create that people take ideas, but in the case of Oh actually what is happening and you can just plus water.

Sergio Faifman: In the case of what is happening in this past quarter, in June and July, we saw a more sharp recovery of the backlog of dispatch, and that should be due to a recovery of real wages and also the positive impact of increased credit lines.

Sergio Faifman: In June and July.

Speaker Change: We saw a recovery a more sharp recovery of the help them back most of dispatch and that she'd be do you do that to a recovery of the real wages.

Sergio Faifman: With the stabilization of crucial economic factors, including a significant reduction in inflation and mention among the attractive foreign direct investment among other initiatives, we are confident that the construction industry has a remarkable opportunity on the horizon.

Speaker Change: And also the positive impact of the increase quite lines Hum.

Sergio Faifman: Mortgage loans.

Sergio Faifman: Pero los porcentajes se mantienen 60% bolsa, 40% granel, con algunas variaciones mensuales. But the percentages are still 60% bags and 40% bags, with some minor variations monthly.

Speaker Change: And definitely if I'm getting the same type of indoors halfway into it and ill come back whenever they shouldn't Miss what the percentages are still 60%.

Sergio Faifman: Finally, I would like to thank all our employees for their commitment and extend my gratitude to the rest of our stakeholders.

Sergio Faifman: <unk> 40 per cent back with some minor variations month to month.

Sergio Faifman: That's very clear, so perhaps a follow-up. So you're mentioning a 60% to 40% mix today, but I would assume that maybe as we move forward into 2025, then BALC will start to contribute more to the mix. So how should we think of pricing, given that there's a shift in mix where BALC will likely have a negative effect on the price mix? So when you talk about maintaining prices of that, mean that you are expecting perhaps more price increases on that side of the mix, and of that, that's perhaps a little bit more clear. In BALC and BACs, it's also very similar.

Speaker Change: No I'd say, that's that's very clear so perhaps a follow up.

Sergio Faifman: This is end of our prepared remarks.

Speaker Change: So when we when you see you mentioning 60% to 40% mix today, but I would assume that maybe as we move forward into 'twenty 'twenty five than bulk will start to contribute more to the mix. So how should we think of pricing given that you know that there's a shift in mix were bulk well likely you know how have a negative effect on the price mix. So.

Operator: We are now ready to take questions.

Operator: Operator, please open the call for questions. Yes, thank you.

Operator: We will now conduct a question and answer session. If you would like to ask a question, please press star then one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star then two if you would like to remove your line. For participants using speaker equipment, it may be necessary to pick up your hands up prior to pressing a key. Once again, star then one on your telephone keypad.

Speaker Change: When you talk about maintaining prices does that mean that you are expecting perhaps more price increases on that side of it.

Speaker Change: I don't know if that that that's perhaps a little bit more clear.

Sergio Faifman: Okay.

Operator: We'd also like to ask you please name your question to one question and to one follow up. Please, if you have additional questions, you may re-cue for those questions and they will be addressed. Also, please note that the Cecil V.

Speaker Change: But if you are sitting with me, let invoice, saying that aneel.

Sergio Faifman: The strategy of pricing is very similar in both modes of dispatch. The contribution que tenemos en ambas productos también es muy similar, and the margins on both, in bulk and in boxes, are also very similar.

Sergio Faifman: Yeah. The strategy with pricing is very similar in both multiple dispatch like wondering if you don't get the animals in a number of globe ambient Wuxi Valletta.

Operator: Mann will be responding to Spanish immediately following the English translation. Please hold momentarily by way of some of our roster.

Sergio Faifman: Margins in both are.

Speaker Change: In Bolton and box he felt who've already seen it even with no market share in a number of my girlfriend towards my understanding from what you mean.

Paul Smith: And the first question comes with Paul Smith with UBS. I would want to actually take some back of our letter to the various issues from there on our network.

Sergio Faifman: and our market share in both dispatch modes is also very similar.

Speaker Change: I know where market share in both our dispatch moats are also better seen it went up quite a bit when shallow mohit turned up at a home in Colombia, but I think I'm not going to get them into a superior level.

Sergio Faifman: We have seen it in other moments when we have a higher increment in the stock market or in the granel, and it should not have any impact on margins or prices.

Sergio Faifman: Thank you Sergio Macrius and David for participating in the pressure heading to. The first one is about July volumes and price. We see much better print for the month. We do, it's a trend or it was one month. And if you permit my second question, it's about margins. In terms of, we see volumes dropping strong, more than 10% over year, but we see margin increase. My question is, is it sustainable for the future with a amazing job done for you guys in terms of and its savings during the very on the summer that I'd like to see for the future if you can keep on the space or if you could see some of the levels or margins. Thank you very much.

Speaker Change: Even though they made yet and won't impact on your market.

Sergio Faifman: We have seen cases in the past where we saw a variation in the participation of these two ports of dispatch, and we didn't see any impact on pricing.

Sergio Faifman: And we have seen cases in the past where we saw.

Sergio Faifman: Our valuation in the participation of these two.

Speaker Change: Patches Hum.

Sergio Faifman: Didn't see any impact on pricing.

Caller: Gotcha, that's very clear. Thanks again for taking my question. You're welcome.

Speaker Change: Got you that's very clear. Thanks, Thanks again for taking my questions.

Operator: Thank you, and this concludes our question and answer session.

Speaker Change: Youre welcome.

Speaker Change: Thank you and this concludes our question and answer session I was that kind of comes back over to you. So how long for any closing remarks.

Sergio Faifman: I would like to come back over to you as well for a closing remarks. Thank you all for joining us today. We really appreciate your participation, and we expect to meet you again in our last call. Thank you very much. Thank you.

Caller: Okay.

Speaker Change: Thank you all for joining US today, we really appreciate your participation and we expect to meet you again in our you know and that's cool. Thank you very much and have an export.

Operator: The conferences are concluded. Thank you for attending today's presentation.

Speaker Change: Thank you. The conference has now concluded. Thank you for attending today's presentation you may now.

Operator: We now do central lines.

Caller: Natura lives.

Sergio Faifman: Hi, Alberto. Thank you for the question. As you have seen, I had a very interesting recovery from the volume shows in June. We believe that this trend is going to continue with similar volumes of the water we saw in July. We believe that due to several steps we have achieved in Argentina, we are reaching a new level of dispatches. In the stability of the inflation, some recover in the level of salaries, the average has changed, the consolidation of a low inflation, the gap between the taxes and some of the factors that are improving the situation.

Caller: [music].

Sergio Faifman: With those in prices, we expect to maintain this level of prices. In terms of price, we need to have multiple factors of exchange, inflation, internal inflation of costs. Our policy regarding the prices, as we always say, it follows different issues as the effects, but also the evolution of our internal costs. We are not seeing changes in this strategy for the next months, and we are not seeing any changes in this strategy for the future.

Sergio Faifman: But this effect must be very soft with respect to a huge change there. Also, we have to consider that in September, we are going to start using the contract that we have already signed, and this contract showed a very significant decrease from the levels of the energy imposed that we have been using. So, for the rest of the year, we are expecting to maintain our margins and even see some improvement in the fourth quarter of the year.

Sergio Faifman: Thank you.

Marina Mertens: Thank you and the next question of recovery. Could it be the resumption of public works or private projects, and could the approval of the RE have any positive impact on seven discrepancies?

Sergio Faifman: Hi, Marina. Thank you for your question. The drivers are a little bit of what we impact more in private works than in public works. We believe in the next two weeks we are going to see what the implementation for the REGY program, and there are several percent of minors and other types of projects, possibly with the REGY and PSN, the work that we have been working on to advance our projects, especially in the mining sector that are standby, and probably with this new region, they will be ready to start.

Sergio Faifman: Thank you.

Unnamed Speaker: And the next question comes from I have two. The first is related to capital rotation. I mean, the company has been able to deliver to this and for those during the first half of this year, despite the economic had wins and so on. And also the company is to have a strong and healthy capital structure.

Unnamed Speaker: So I'd like to understand in terms of capital rotation, what are the companies or nagments views regarding dividends and caps for these years. So this is my first question. And the second question is related to market share. You guys mentioned that you expect to maintain such price levels for the second half of this year. So I'd like to understand how is the company thinking about maintaining its market share in the summit marketing so these are my two questions. Thank you.

Sergio Faifman: Hi, Marcelo. Thank you for your question. Comienzo por la segunda pregunta. I'm going to start with the second question. El nivel de precio y marqueciar son dos cosas que seguimos obviamente de la mano. The level of prices and market share are two things that we follow up close. Obviamente el marqueciar tiene variaciones mensuales en un rango en el cual nos sentimos como tanto para arriba y un para abajo. And the market share obviously has monthly variations in a plus or minus variation where we feel comfortable, but no, no, no, tenemos una política de mejorar precio a costa de marqueciar ya que en el largo plazo destruiría el valor de la compañía.

Sergio Faifman: But we don't have a policy of growing market share with low and prices because we believe that this will destroy value for the company in the long term. Con el cual tanto el nivel de precio de este quarter como el quarter siguiente siempre van a estar atados a un rango de marqueciar el cual tomamos como lógico. So the price in this quarter and the prices as you will see in the future are going to be alongside a level of market share in where we feel comfortable.

Sergio Faifman: En cuanto al capital location, los próximos meses tenemos a unos vencimientos de deuda que el mercado tenemos varias opciones para para un global regarding capital location. In the next quarter we have some maturities of short term debt and we expect to address that with some cash generation and our short term lines with the banks. En cuanto a la generación de caja al igual que los últimos años y para elante, estamos viendo todas las opciones que maximise el valor para los funcionistas.

Sergio Faifman: Regarding also capital location, we are seeing all the alternatives that might add value to the short holders. Con el cual, seguramente en los próximos meses definiremos y amos cual será mejor a locación para ese capital para lo que queda ahí. So in the upcoming months, we will decide what is going to be the the destiny of the cash generation of the second semester. Thank you.

Unnamed Speaker: Thank you so much, you guys in Congress on the results. Thank you.

Alejandro Regan: And the next question comes around, Alejandro Regan, with Morgan Stanley. Hi, good morning, Laman. I think thank you for taking my question.

Sergio Faifman: I was wondering if you can give us some color on the mix of your volumes, meaning bag versus bulk today, and where do you see that going towards 2025. And finally, when you talk about maintaining prices for the second half of the year, just curious if there's a mix effect, embed it into that comment as you shift away from back. Thank you. Hi Alejandra, thank you for the question. The first, the second, I ask you to repeat that you don't listen well.

Sergio Faifman: Con respecto a bolsa y granel los porcentajes se mantienen After that, I'm going to ask you to repeat the second question because we didn't actually get it. Regarding the first one, the percentages or the participation of BACs and BALC are within the historic parameters. Specifically, the idea of paraíra, a number of more concrete, seeing in the case of the de la bolsa, se vio una recuperación en los meses de junio Julio, que queremos tener el redonecto de recuperación de salarios, y no creemos hipotecarios, but in the case of actually what is happening in this past quarter, in June and July, we saw a recovery, a more sharp recovery of the BAC mode of this patch, and that should be due to the recovery of the real wages, and also the positive impact of the increased create lines and mortgage lines. Pedro, lo presentá que se mantienen, se senta por 100% bolsa, cuarenta por 100% ranel, como una varicione mensual, but the percentages are still 60% BALC, BACs and 40% BAC, with some minor variations month to month.

Sergio Faifman: That's very clear, so perhaps a follow-up, so you're mentioning 60% to 40% mix today, but I would assume that maybe as we move forward into 2025, then BALC will start to contribute more to the mix. So how should we think of pricing, given that there's a shift in mix where BALC will likely have a negative effect on the price mix? So when you talk about maintaining prices of that mean that you are expecting perhaps more price increases on that side of the mix, and of that that's perhaps a little bit more clear. In BALC and BACs, it's also very similar.

Sergio Faifman: Thank you, and this concludes our question and answer session. I would like to come back over to you as well for an closing remarks. Thank you all for joining us today, we really appreciate your participation, and we expect to meet you again in our last call. Thank you very much. Thank you.

Operator: The conferences are concluded. Thank you for attending today's presentation. We now do central lines.

Q2 2024 Loma Negra Compañía Industrial Argentina Sociedad Anónima Earnings Call

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