Q2 2026 Loma Negra Compania Industrial Argentina SA Earnings Call

August 7, 2026

Speaker #1: Good day and welcome to the Loma Negra second quarter 2026 conference call and webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: Good day, welcome to the Loma Negra Q2 2026 conference call and webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Mr. Sergio Faifman will be responding in Spanish immediately following an English translation. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to turn the conference over to Mr. Diego Jalón, Head of IR. Please, Diego, go ahead.

Speaker #1: 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.

Speaker #1: To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Please note that this event is being recorded.

Speaker #1: I would now like to turn the conference over to Mr. Diego Jalon, Head of IR. Please, Diego, go ahead.

Speaker #2: Thank you. Good day, and welcome to Loma Negra's earnings conference call. By now, everyone should have access to our earnings press release and the presentation for today's call.

Diego Jalón: Thank you. Good day, welcome to Loma Negra's earnings conference call. By now, everyone should have access to our earnings press release and the presentation for today's call, both of which were distributed yesterday after market close. Joining me on the call today are Sergio Faifman, our CEO and Vice Chairman of the Board of Directors, and Marcos Gradin, our CFO. Sergio and Marcos will be available for the Q&A session. 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. This conference call will include discussion on non-GAAP financial measures.

Speaker #2: Both of which were distributed yesterday after market close. Joining me on the call today are Sergio Faifman, our CEO and Vice Chairman of the Board of Directors, and Marcos Gradin, our CFO.

Speaker #2: Sergio and Marcos will be available for the Q&A session. 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 filings with the SEC.

Speaker #2: We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. This conference call will also include discussion on non-GAAP financial measures; the full reconciliation to the corresponding financial measures is included in the earnings press release.

Diego Jalón: The full reconciliation to the corresponding financial measures is included in the earnings press release. Now, I would like to turn the call over to Sergio.

Speaker #2: Now, I would like to turn the call over to Sergio.

Speaker #3: Thank you, Diego. Hello, everyone. Thank you for joining us today. I would like to start my presentation by discussing the highlights of the quarter.

Sergio Faifman: Thank you, Diego. Hello, everyone, thank you for joining us today. I would like to start my presentation by discussing the highlights of the quarter. 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. Starting with slide two. As we move through the Q2, industry volume have not yet fully regained the momentum we were expecting. Performance during the quarter was mainly affected by weak April, impacted by heavy rains. While May and June trends were more in line with the level registered a year ago. Cement volume decreased 1.4% year over year, while consolidated net revenue increased 2.1%, reaching ARS 238.1 billions.

Speaker #3: 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.

Speaker #3: Starting with slide 2. As we move through the second quarter, industry volume has not yet fully guided the momentum we were expecting. Performance during the quarter was mainly affected by weak April.

Speaker #3: Impacted by heavy rains, while May and June trends were more in line with the levels registered eight years ago. Same volume decreased 1.4% year over year, while consolidated net revenue increased 1.0%, reaching $238.1 billion pesos.

Speaker #3: In terms of quarterly performance, margin in pesos showed some compression, mainly reflecting higher costs and depreciation, while our top line continued to show a positive trend.

Sergio Faifman: In terms of quarterly performance, margin pesos showed some compression, mainly reflecting higher costs and depreciation, while our top line continued to show a positive trends even as volume remained lagging. Consolidated adjusted EBITDA reached ARS 48.2 billion, down 2.5% year over year, with margin contracting 97 basis points to 20.2%. In dollar terms, however, EBITDA generation per ton stood at $32.1, up 14% year over year, underscoring the resilience of our operation even as demand recovery remains gradual. During the quarter, we canceled our Class 4 corporate bonds for a total of $10 million, and we have no remaining structured debt maturity for the rest of the year. As of quarter end, net debt stood at $185 million, representing a net debt to LTM adjusted EBITDA ratio of 1.3 times.

Speaker #3: Even as volume remained lagging. Consolidated adjustment EBITDA reached pesos 48.2 billion, down 2.5% year over year, with margin contracting 97 basis points, to 20.2%.

Speaker #3: In dollar terms, however, EBITDA generation per ton stood at $32.1, up 14% year over year, underscoring the resilience of our operation even as demand recovery remains gradual.

Speaker #3: During the quarter, we can sell our Class 4 corporate bonds for a total of $10 million, as we have no remaining structured debt maturity for the rest of the year.

Speaker #3: As of quarter end, net debt stood at $185 million, representing a net debt to LTM adjusted EBITDA ratio of 1.3 times. I will now hand off the call to Marcos, who will take you through our market review and financial results.

Sergio Faifman: I will now hand off the call to Marcos, who will lead you through our market review and financial result. Please, Marcos, go ahead.

Speaker #3: Please, Marcos, go ahead.

Speaker #4: Thank you, Sergio. Good day, everyone. Please turn to slide 4. The most recent economic data shows a more moderate growth trajectory in the second quarter.

Marcos Gradin: Thank you, Sergio. Good day, everyone. Please turn to slide four. The most recent economic data shows a more moderate growth trajectory in Q2. The EMAE, Argentina's Monthly Economic Activity Estimator, grew 1.6% year over year in April, before slowing to 0.2% in May, with a monthly decline of 0.5% versus April. On a cumulative basis, the indicator is up 1.7% through the first five months of the year. Although the pace of growth has clearly moderated compared to earlier in the year. Construction activity has shown a similar mixed trend. The ISAC declined 2.8% year over year in April, weighed down by the same heavy rains that affected our cement volumes before rebounding 4.1% year over year in May. Leading indicators remain constructive.

Speaker #4: The IMAE, Argentina's monthly economic activity indicator, grew 1.6% year over year in April, before slowing to 0.2 in May, with a monthly decline of 0.5% versus April.

Speaker #4: On a cumulative basis, the indicator is up 1.7% through the first five months of the year. Although the pace of growth has clearly moderated compared to earlier in the year.

Speaker #4: Construction activity has shown a similar mixed trend. The ISAC declined 2.8% year over year in April, weighed down by the same heavy rains that affected our cement volumes, before rebounding 4.1% year over year in May. Leading indicators remain constructive.

Speaker #4: Registered private sector employment in construction grew 1.2% year over year in April, and building permits authorized in the same month expanded by 17% year over year, with a 7.6% decrease on a cumulative basis over the first four months of the year.

Marcos Gradin: Registered private sector employment in construction grew 1.2% year over year in April. Building permits authorized in the same month expanded by 17% year over year, with a 7.6% decrease on a cumulative basis on the first four months of the year. Within this context, industry cement dispatches declined 5% year over year during Q2, mainly reflecting the impact of heavy rains in April across the country's main urban centers. Our own volumes follow a similar trend, but with a more moderate decline, down 1.4% year over year, outperforming the industry as May and June trends normalize closer to last year levels. In terms of product mix, bagged cement continued to outperform, supported by larger scale projects, while bulk cement, which represents the majority of the industry mix, remained relatively weak, consistent with more cautious behavior in the retail and small contractor segment.

Speaker #4: Within the context, industry cement dispatches declined 5% year over year during the quarter. This mainly reflected the impact of heavy rains in April across the country's main urban centers. Our own volumes followed a similar trend but with a more moderate decline, down 1.4% year over year, outperforming the industry as May and June trends normalized closer to last year levels.

Speaker #4: In terms of product mix, bulk cement continued to outperform, supported by larger-scale projects, while the bagged segment, which represents the majority of the industry mix, remained relatively weak.

Speaker #4: This is consistent with more cautious behavior in the retail and small contractor segments.

Speaker #3: Looking ahead, we expect a continued and even recovery path, as we have been describing, rather than a change in the underlying demand trend. That said, we remain cautiously optimistic going forward, as we believe this recovery path remains intact.

Marcos Gradin: Looking ahead, we expect a continued uneven recovery path we have been describing, rather than a change in the underlying demand trend. That said, we remain cautiously optimistic going forward as we believe this recovery path remains intact. Turning to slide seven for a review of our top line performance by segment. Second quarter revenues increased by 2.1% year over year, with growth led by the cement business, followed by the ready-mix segment, partially offset by lower revenues in the concrete and aggregate segments. In the cement, masonry cement, and lime segments, revenues increased by 2.2% year over year, while volumes decreased by 1.4%. Bagged cement dispatches continued to outperform, supported by higher activities from concrete producers, industrial clients, and construction companies. While bagged cement remain under pressure, with the retail segment showing the weakest performance as demand for self-construction and refurbishing projects remain delayed.

Speaker #4: Turning to slide 5 for our review of our top-line performance by segment. Second quarter revenues increased by 2.1% year over year, with growth led by the cement business, followed by the Redwood segment, partially offset by lower revenues in the concrete and aggregate segments.

Speaker #4: In the cement, masonry cement, and lime segments, revenues increased by 2.2% year over year, while volume decreased by 1.4%. Bulk cement dispatches continued to outperform, supported by higher activity from concrete producers, industrial clients, and construction companies. Meanwhile, bagged cement remained under pressure, with the retail segment showing the weakest performance, as demand for self-construction and refurbishing projects remained delayed.

Speaker #4: Pricing dynamics remained positive, supporting the segment top line performance. Concrete revenues decreased by 11.2% year over year, as an 18.6% decline in volumes was solely partially upset, by favoring pricing dynamics.

Marcos Gradin: Pricing dynamics remain positive, supporting the segment top line performance. Concrete revenues decreased by 11.2% year over year, as an 18.6% decline in volumes was only partially offset by favorable pricing dynamics. Volumes were mainly affected by lower demand from special projects, particularly those linked to port infrastructure and wind farms, which are now in their final stages of completion. The start of new projects have been gradually pushed back, though we expect them to break ground in the near terms. Volumes in Rosario remain more stable, supported by a combination of public and private works. Aggregates revenues decreased by 10.3% year over year, as a 12.2 decline in volumes was only partially offset by favorable pricing dynamics. Volumes were mainly affected by the same dynamics impacted in concrete segment, particular weaker demand for public works and construction companies.

Speaker #4: Volumes were mainly affected by lower demand from special projects, particularly those linked to port infrastructure and wind farms, which are now in their final stages of completion. The start of new projects has been gradually pushed back, though we expect them to break ground in the near term.

Speaker #4: Volumes in Rosario remained more stable, supported by a combination of public and private works. Aggregate revenues decreased by 10.3% year over year, as a 12.2% decline in volumes was only partially offset by favorable pricing dynamics.

Speaker #4: Volumes were mainly affected by the same dynamics impacting the concrete segment, particularly weaker demand for public works and construction companies. Redwood revenues increased by 8.6% year-over-year, as higher transported volumes were up 10.1%, while partially offset by softer pricing conditions.

Marcos Gradin: Railroad revenues increased by 8.6% over year as higher transported volumes, up 10.1%, were partially offset by softer pricing conditions. Volume growth was mainly driven by higher transportation of grain, cements, and frac sand. The latter reflecting the resumption of operations in Neuquén, following the repair of the rail section in Bahía Blanca that had been affected by last year's storm. Moving on to slide seven. Consolidated gross profit decreased by 3.9% year over year, with gross margin contracting 122 basis points to 19.2%, mainly reflecting higher cost and depreciations. Cost of sales increased by 3.7% year over year, reflecting higher cost in the cement and railroad segments, partially offset by lower costs in the concrete and aggregate businesses.

Speaker #4: Volume growth was mainly driven by higher transportation of grain, cement, and flat sand, the latter reflecting the resumption of operations to Neuquén, following the repair of the rail section in Villa Blanca that had been affected by last year's storm.

Speaker #4: Moving on to slide 7. Consolidated gross profit decreased by 3.9% year over year, with gross margin contracting 122 basis points to 19.2%, mainly reflecting higher cost and depreciations.

Speaker #4: Cost of sales increased by 3.7% year over year, reflecting higher cost in the cement and Redwood segments, partially upset by lower cost in the concrete and aggregate businesses.

Speaker #4: In the cement segment, cost of sales increased on a per-ton basis, mainly driven by higher depreciation following the capitalization of the 25-kilogram bagging project after June of last year. Along with higher packaging costs associated with its implementation, maintenance and freight costs also rose, the latter reflecting the pass-through of higher fuel prices.

Marcos Gradin: In the cement segment, cost of sales increased on a pro forma basis, mainly driven by higher depreciation following the capitalization of the 25-kilogram bagging project after June of last year, along with higher packaging costs associated with its implementation. Maintenance and freight costs also rose, the latter reflecting the pass-through of higher fuel prices, while thermal and electric energy costs remained broadly in line. As planned, most kilns were shut down in May to avoid operating during the winter months, helping to limit our exposure to higher energy costs. In railroad, the increase in cost of sales was mainly related to higher transported volumes, together with higher salaries, fuel prices, and depreciation. The concrete and aggregate segments both contributed positively to the consolidated results, posting gross margin expansion, although they remained in negative territory. Finally, SG&A expenses increased by 15.7% year over year, mainly driven by higher salary expenses.

Speaker #4: While thermal and electric energy costs remained broadly in line, as planned, most schemes were shut down in May to avoid operating during the winter months, helping to limit our exposure to higher energy costs.

Speaker #4: In Redwood, the increase in cost of sales was mainly related to higher transported volumes, together with higher salaries, fuel prices, and depreciation. The concrete and aggregate segments both contributed positively to the consolidated result, boosting gross margin expansion, although they remained in negative territory.

Speaker #4: Finally, A&C expenses increased by 15.7% year over year, mainly driven by higher salary expenses as a percentage of sales. A&C stood at 12.1%, up 132 basis points compared to the second quarter of 2025.

Marcos Gradin: As a percentage of sales, SG&A stood at 12.1%, up 132 basis points compared to Q2 2025. Please turn to slide eight. Consolidated adjusted EBITDA for the quarter stood at $38 million, while in pesos it reached ARS 48.2 billion, reflecting a 2.5% year-over-year decline. This decrease was mainly driven by a weaker result in the railroad segment, together with, to a lesser extent, a contraction in cement, partially offset by improved results in concrete and aggregates. As a result, the consolidated EBITDA margin contracted to 20.2%, representing a 97 basis point decrease year-over-year. In the cement segment, adjusted EBITDA margins stood at 23.9%, down 81 basis points year-over-year, a smaller decline in the consolidated construction. Higher cost of sales and SG&A, as discussed in the previous slide, were partially cushioned by favorable pricing dynamics.

Speaker #4: Return to slide 8. Consolidated adjusted EBITDA for the quarter stood at $38 million US dollars, while in pesos it reached 48.2 billion, reflecting a 2.5% year-over-year decline.

Speaker #4: This decrease was mainly driven by a weaker result in the Rail segment, together with, to a lesser extent, a contraction in cement, partially offset by improved results in concrete and aggregates.

Speaker #4: As a result, the consolidated EBITDA margin contracted to 20.2%, representing a 97 basis point decrease year over year. In the cement segment, adjusted EBITDA margins stood at 23.9%, down 81 basis points year over year, a smaller decline than the consolidated contraction.

Speaker #4: As higher cost of sales and A&C, as discussed in the previous slide, were partially cushioned by favorable pricing dynamics. The concrete segment's adjusted EBITDA margin expanded by 867 basis points to minus 4.3% from minus 13%, in the second quarter of 2025, supported by favorable pricing dynamics and lower costs, although it remained in negative territory.

Marcos Gradin: The concrete segment's adjusted EBITDA margin expanded by 867 basis points to -4.3% from -13% in Q2 2025, supported by favorable pricing dynamics and lower costs, although it remained in negative territory. Similarly, the aggregate segment improved its margin by 877 basis points, reaching -18.6% in the quarter from -27% in the same period last year, also supported by increasing price and cost control, although it likewise remains in negative territory. Finally, in the railroad segment, adjusted EBITDA margin turned negative, reaching -5.2% in Q2, compared to a +9.8% in the same period of 2025. This was mainly due to higher cost of sales, primarily driven by increased fuel and labor costs, while SG&A expenses remained broadly in line.

Speaker #4: Similarly, the aggregate segment improved its margin by 877 basis points, reaching minus 18.6% in the quarter from minus 27% in the same period last year. This was also supported by increasing price and cost control, although it likewise remains in negative territory.

Speaker #4: Finally, in the Redwood segment, adjusted EBITDA margin turned negative, reaching minus 5.2% in the second quarter, compared to a positive 9.8% in the same period of 2025.

Speaker #4: This was mainly due to a higher cost of sales, primarily driven by increased fuel and labor costs, while SG&A expenses remained broadly in line.

Speaker #4: Moving on to the bottom line on slide 10, net profit attributable to owners of the company totaled 7.5 billion pesos for the quarter, compared to 0.5 billion pesos in the second quarter of last year. The improvement was mainly driven by lower financial expenses and performance, and was partially offset by higher income tax expenses.

Marcos Gradin: Moving on to the bottom line on slide 10, net profit attributable to owners of the company totaled ARS 7.5 billion for the quarter, compared to ARS 0.5 billion in Q2 of last year. The improvement was mainly driven by lower financial expenses despite softer operating performance and was partially offset by higher income tax expenses. On the financial side, the company reported a total net financial loss of ARS 5.6 billion for the quarter, compared to a net financial loss of ARS 22.3 billion in the same period of last year. The year-over-year improvement was mainly attributable to a lower foreign exchange loss on our US dollar denominated liabilities, as the peso continued to depreciate during the quarter, though at a more moderate pace than in Q2 of last year.

Speaker #4: On the financial side, the company reported a total net financial loss of 5.6 billion pesos for the quarter, compared to a net financial loss of 22.3 billion pesos in the same period of last year. The year-over-year improvement was mainly attributable to a lower foreign exchange loss on our US dollar-denominated liabilities, as the peso continued to depreciate during the quarter, though at a more moderate pace than in the second quarter of last year. Additionally, net financial expenses decreased by 27%, to 9.5 billion pesos, mainly driven by improved financial income, coupled with lower financial expenses.

Marcos Gradin: Additionally, net financial expenses decreased by 27% to ARS 9.5 billion, mainly driven by improved financial income coupled with lower financial expenses. Moving on to the balance sheet, as you can see on slide 11, we ended the quarter with net debt of ARS 274 billion and a net debt to adjusted EBITDA ratio of 1.3 times, down from 1.47 times at the end of 2025. Cash flow from operating activities totaled ARS 18.1 billion in the quarter, compared to a cash outflow of ARS 29.7 billion in Q2 2025. This year-over-year improvement was mainly driven by significant improvement in working capital, primarily reflecting lower income tax payments during the quarter, together with a strong increase in tax liabilities. This was partially offset by higher working capital requirements in trade receivables, as well as accounts payable.

Speaker #4: Moving on to the balance sheet, as you can see on slide 11, we ended the quarter with net debt of 274 billion pesos and a net debt to adjusted EBITDA ratio of 1.3 times, down from 1.47 times at the end of 2025, cash flow from operating activities totaled 18.1 billion pesos in the quarter, compared to a cash outflow of 29.7 billion in the second quarter of 2025, this year over year improvement was mainly driven by a significant improvement in working capital primarily reflecting lower income tax payments during the quarter, together with a strong increase in tax liabilities.

Speaker #4: This was partially offset by higher working capital requirements, in trade receivables as well as accounts payable. Regarding investing activities, the company used 9.9 billion pesos, with capex totaling 9.7 billion, remaining lower following the completion of the 25-kilogram bagging project.

Marcos Gradin: Regarding investing activities, the company used ARS 9.9 billion, with CapEx totaling ARS 9.7 billion, remaining lower following the completion of the 25-kilogram bagging project. On the financing side, the company used ARS 13.2 billion during the quarter, mainly related to the repayments of borrowings. In May 2026, the company completed the cancellation of the Class 4 corporate bond for ARS 10 million, leaving no remaining structured debt maturities for the rest of the year. In US dollar terms, net debt stood at $185 million, with an average duration of 1.4 years. As of quarter end, 87% of total debt was denominated in dollars, with the remaining balance in pesos. Now, for our final remarks, I will hand the call back to Sergio. Thank you.

Speaker #4: On the financing side, the company used 13.2 billion pesos during the quarter, mainly related to the repayments of borrowings. In May 2026, the company completed the cancellation of the Class 4 corporate bond for $10 million, leaving no remaining structured debt maturities for the rest of the year.

Speaker #4: In US dollar terms, net debt stood at 185 million dollars, with an average duration of 1.4 years, as of quarter end, 87% of total debt was denominated in dollars, with the remaining balance in pesos, now for our final remarks, I will hand the call back to Sergio.

Speaker #4: Thank you.

Speaker #1: Thank you, Marcos. Now, to finalize the presentation, I kindly ask you to turn to slide 13. Following, during the first half of the year, we came in below our initial expectations.

Sergio Faifman: Thank you, Marcos. Now, to finalize the presentation, I please ask you to turn to slide 13. Volume during the H1 of the year came in below our initial expectation. Going forward, we may continue to see some volatility, including potential short-term decline, as the recovery path is unlikely to be a straight line. That said, we remain cautiously optimistic that the underlying trend for the H2 of the year and beyond is a positive one. We are beginning to see some of the projects approved under the RIGI regime starting to move forward. Beyond that, we see additional factors that could future-support volume in the H2 of the year: a potential easing of monetary condition, an expected improvement in regulation, and a possible recovery in credit availability.

Speaker #1: Going forward, we may continue to see some volatility, including potential short-term decline. At the recovery patch, it's unlikely to be a striking line. That sign will remain causally optimistic that the underlying trend for the second half of the year, and beyond, is a positive one.

Speaker #1: We are beginning to see some of the project approvals under the Rishi regime starting to move forward. Beyond that, we see additional factors that could further support volume in the second half of the year: a potential easing of monetary conditions, an expected improvement in regal ways, and a possible recovery in credit availability.

Speaker #1: Our top line continued to perform well during the quarter, and we remain focused on cost discipline and operational efficiency as we navigate a gradual demand recovery.

Sergio Faifman: Our top line continued to perform well during the quarter, and we remain focused on cost discipline and operational efficiency as we navigate a graduated demand recovery. Finally, on 5 August, Loma celebrated its 100th anniversary, an important milestone that fills us with pride. We look forward to continuing to support the country's development over the next 100 years, just as we have through this past century. This is the end of our prepared remarks. We are now ready to take questions. Operator, please open the call for questions.

Speaker #1: Finally, on August 5, Loma celebrated its 100th anniversary—an important milestone that filled us with pride. We look forward to continuing to support the country's development over the next 100 years, just as we have throughout this past century.

Speaker #1: This concludes our prepared remarks. We are now ready to take questions. Operator, please open the call for questions.

Speaker #2: 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.

Operator: 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. 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 handset prior to pressing the keys. Once again, star one on your telephone keypad. We also would like to ask that 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 Mr. Sergio Faifman will be responding in Spanish immediately following an English translation. Please hold momentarily while we assemble our roster.

Speaker #2: A confirmation tone will indicate that your line is in the question queue. You may press star, then 2, if you would like to remove your line.

Speaker #2: For participants using speaker equipment, it may be necessary to pick up your handset prior to pressing the keys. Once again, please press star 1 on your telephone keypad.

Speaker #2: We also would like to ask that you please limit your questions to one question and one follow-up. If you have additional questions, you may re-queue for those questions, and they will be addressed.

Speaker #2: 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.

Speaker #2: The first question is from Sofia Barta with Latin Securities. Please go ahead.

Operator: The first question is from Sofia Barta with Latin Securities. Please go ahead.

Operator: The first question is from Sofia Vatta with Latin Securities. Please go ahead.

Speaker #3: Hi, Loma team. Thank you for taking my question. It’s regarding the second semester. If credit access remains limited, would other demand drivers support the recovery?

Sofia Barta: Hi, Loma team. Thank you for taking my question. It's regarding the second semester. If credit access remains limited, would the other to

Sofia Vatta: Hi, Loma team. Thank you for taking my question. It's regarding the second semester. If credit access remains limited, would the other to

Sergio Faifman: Good morning, Sofia. Thank you for your question.

[Translator]: Good morning, Sofia. Thank you for your question.

Speaker #4: Good morning, Sofia. Thank you for your question. Sí, claramente creemos que el crédito es difícil que se recupere en forma significativa durante el segundo semestre, to see a significant credit improvement in the second half of the year.

Sergio Faifman: [Foreign language]

Marcos Gradin: Yes. Actually, we believe that it's difficult to see a significant credit improvement in the second half of the year.

[Translator]: Yes. Actually, we believe that it's difficult to see a significant credit improvement in the second half of the year.

Sergio Faifman: [Foreign language]

Speaker #4: Asimismo, sí creemos que hay varios factores que deberían empezar a impactar positivamente en los volúmenes y el nivel de actividad. And we do believe there are other factors that should start to impact positively our level of activity.

Sergio Faifman: We do believe there are other factors that should start to impact positively our level of activity.

[Translator]: We do believe there are other factors that should start to impact positively our level of activity.

Speaker #4: Tenemos varios de los proyectos que han sido presentados dentro de Rigi que estamos avanzando en su cotización para comenzar. Algunos de ellos van a comenzar en el segundo semestre de este año.

Sergio Faifman: [Foreign language]

Marcos Gradin: Several of the projects that were presented with the RIGI regime, we are working on some of those. We expect them to start showing some impact on our volumes in the upcoming months.

[Translator]: Several of the projects that were presented with the RIGI regime, we are working on some of those. We expect them to start showing some impact on our volumes in the upcoming months.

Speaker #4: Several of the projects that were presented with the Rigi regime—we are working on some of those. We expect them to start showing some impact on our volumes in the upcoming months.

Sergio Faifman: Additionally,

[Translator]: [Foreign language]

Speaker #4: Additionally, tenemos todos los contratos de concesiones viales que el gobierno ha aprobado en el último tiempo. Additionally, all the road concessions that the government has been granting in the past few months, aún ninguno de ellos ha comenzado, con lo cual eso debería tener impacto en los próximos meses y en el segundo semestre del año.

Diego Jalón: Additionally, all the road concessions that the government has been granting in the past few months.

[Translator]: Additionally, all the road concessions that the government has been granting in the past few months.

Sergio Faifman: Aún ninguno de ellos ha comenzado, con lo cual eso debería tener impacto en los próximos meses y en el segundo semestre del año.

Sergio Faifman: [Foreign language]

Speaker #4: None of those are already impacting our volumes, but they are starting to move forward, so we are expecting to see some more volume driven by that in the second half of the year.

Diego Jalón: None of those are already impacting our volumes, but they are starting to move forward. We are expecting to see some more volumes driven by that in the H2 of the year.

[Translator]: None of those are already impacting our volumes, but they are starting to move forward. We are expecting to see some more volumes driven by that in the H2 of the year.

Speaker #4: Y siendo recordando históricamente todos los meses de septiembre para adelante, son los mejores meses estacionales del año. And otherwise, remember that the months starting September are the strongest months in terms of selling dispatches.

Sergio Faifman: Y siempre recordando que históricamente los meses de septiembre para adelante son los mejores meses estacionales del año.

Sergio Faifman: [Foreign language]

Diego Jalón: Always remember that the months starting September are the strongest months in terms of selling dispatches.

[Translator]: Always remember that the months starting September are the strongest months in terms of selling dispatches.

Speaker #3: Okay, thank you.

Sofia Barta: Okay. Thank you.

Sofia Vatta: Okay. Thank you.

Speaker #2: The next question is from Alejandro Obregon with Morgan Stanley. Please go ahead.

Operator: The next question is from Alejandra Obregón with Morgan Stanley. Please go ahead.

Speaker #5: Hi, good morning, Loma Negra team. Thank you for taking my question. My name is on your costs, on your unit costs, actually. So, you mentioned in the release and across your remarks that these are up and you're starting to see some pressures on margins.

Alejandra Obregón: Hi. Good morning, Loma Negra team. Thank you for taking my question. Mine is on your unit costs, actually. You mentioned in the release and across your remarks that these are up and you're starting to see some pressures on margins. I was hoping to understand if you can help us break those trends down. In terms of the cost headwinds, which ones do you think are a one-off or perhaps just seasonally related vis-à-vis those that are recurring? If you think of perhaps the H2 and 2027, what do you think are the levers that could help margins recover from this level? Thank you.

Speaker #5: And I was hoping to understand if you can help us break those trends down. So, in terms of the cost headwinds, which ones do you think are one-off or perhaps just seasonally related, vis-à-vis those that are recurring?

Speaker #5: And if you think of perhaps the second half and 2027, what are you think are the levers that could help margins recover from these levels?

Speaker #5: Thank you.

Speaker #4: Hi, Alejandro. Thank you for your question. Sí, a ver si paremos. Dentro de los costos unitarios que están impactando en el trimestre, just to be clear and separate the unitary costs that are impacting in the quarter.

Diego Jalón: Hi, Alejandra. Thank you for your question. A ver si separamos dentro de los costos unitarios que están impactando en el trimestre. Just to be clear and separate the unitary costs that are impacting in the Q.

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

Speaker #4: Yo separaría algunos que son transitorios, otros permanentes y otros que son nuevos. But with remarks, some of those that are permanent, some of those will remain and some of those are new.

Sergio Faifman: Separaría algunos que son transitorios, otros permanentes y otros que son nuevos.

Diego Jalón: As we remarked, some of those that are permanent, some of those will remain, and some of those are new.

Speaker #4: Dentro de esto, diría que en el trimestre y en los últimos meses hemos tenido un incremento en lo que tiene que ver con fletes, producto del aumento de combustible por la guerra.

Sergio Faifman: Dentro de esto, diría, en el trimestre y en los últimos meses hemos tenido un incremento en lo que tiene que ver con fletes, producto del aumento de combustible por la guerra.

Sergio Faifman: [Foreign language]

[Translator]: Just to be clear and separate the unitary costs that are impacting in the Q.

[Translator]: As we remarked, some of those that are permanent, some of those will remain, and some of those are new.

Speaker #4: During the quarter, we saw some increase in freights, due to the increase in gas. Due to the impact of the war, adicionalmente, cuando uno compara con el año pasado, tenemos todo lo que tiene que ver con la bolsa de 25 kilos, que fue empezada a comercializarse a partir de julio del año pasado.

Diego Jalón: During the quarter, we saw some increase in freights due to the increase in gas due to the impact of the war.

[Translator]: During the quarter, we saw some increase in freights due to the increase in gas due to the impact of the war.

Sergio Faifman: [Foreign language]

Sergio Faifman: Adicionalmente, cuando uno compara con el año pasado, tenemos todo lo que tiene que ver con la bolsa de 25 kilos, que fue empezada a comercializarse a partir de julio del año pasado.

Speaker #4: Additionally, we also have the impact of the 25 kilos bags that we started to dispatch on July last year. Aquí tenemos dos impactos. Uno que tiene que ver con costo de la operación, el costo del envase, el costo de personas, electricidad y de la operación de sacos de bolsas de 25 kilos.

Diego Jalón: Additionally, we also had the impact of the 25 kilos bags that we started to dispatch on July last year.

[Translator]: Additionally, we also had the impact of the 25 kilos bags that we started to dispatch on July last year.

Sergio Faifman: [Foreign language]

Sergio Faifman: Aquí tenemos dos impactos: uno que tiene que ver con un costo de la operación, el costo del envase, el costo de personas, electricidad y de la operación de sacos de bolsa de 25 kilos.

Speaker #4: Here we have two types of impacts. One is related to the bags themselves—the energy—and then the people working on these new dispatching lines.

Diego Jalón: Here we have two types of impacts. One is related to the bags themselves, all the energy and the people working on these new dispatching lines.

[Translator]: Here we have two types of impacts. One is related to the bags themselves, all the energy and the people working on these new dispatching lines.

Speaker #4: Y, por el otro lado, el impacto que tiene que ver con la amortización de la inversión que la compañía ha hecho para la bolsa de 25 kilos.

Sergio Faifman: [Foreign language]

Sergio Faifman: Por el otro lado, el impacto que tiene que ver con la amortización de la inversión que la compañía ha hecho para la bolsa de 25 kilos.

Speaker #4: And on the other side, we have the impact of the depreciation of the investment that we did in this project. Yo diría que, cuando uno mira tanto en el trimestre como para adelante, tanto el impacto de lo que tiene que ver con bolsa de 25 kilos como con flete ha sido trasladado a precio.

Diego Jalón: On the other side, we have the impact of the depreciation of the investment that we did in the structures.

[Translator]: On the other side, we have the impact of the depreciation of the investment that we did in the structures.

Sergio Faifman: [Foreign language]

Sergio Faifman: Diría, cuando uno mira tanto el trimestre como para adelante, tanto el impacto de lo que tiene que ver con bolsa de 25 kilos como con flete ha sido trasladado a precio.

Speaker #4: And also looking forward, the impact of the 25 kilo bags. Was fully translated to an increase in prices. Adicionalmente, para los próximos meses, a partir de septiembre, que arrancan nuevamente nuestros hornos, and additionally, looking forward, starting on September, we're going to start our kilns again.

Diego Jalón: Also looking forward, the impact of the 25-kilo bags was fully translated to an increase in prices.

[Translator]: Also looking forward, the impact of the 25-kilo bags was fully translated to an increase in prices.

Sergio Faifman: [Foreign language]

Sergio Faifman: Adicionalmente, para los próximos meses, a partir de septiembre, que arrancan nuevamente nuestros hornos.

Diego Jalón: Additionally, looking forward, starting on September, we're going to start our kilns again.

[Translator]: Additionally, looking forward, starting on September, we're going to start our kilns again.

Speaker #4: Ya hemos firmado contrato de gas por valores que tienen una reducción respecto de lo que veníamos pagando, lo cual va a mejorar nuestro costo.

Sergio Faifman: [Foreign language]

Sergio Faifman: Ya hemos firmado un contrato de gas por valores que tiene una reducción respecto a lo que veníamos pagando, lo cual eso va a mejorar nuestro costo.

Speaker #4: And we have already signed contracts to start using in that period, with terms better than the ones that we used in our last production cycle.

Diego Jalón: We have already signed contracts to start using in that period, with terms better than the ones that we used in our last production cycle. That is going to have a positive impact on our costs.

[Translator]: We have already signed contracts to start using in that period, with terms better than the ones that we used in our last production cycle. That is going to have a positive impact on our costs.

Speaker #4: So that is going to have a positive impact on our costs. Additionally, el incremento en volumen nos debería permitir una mayor reducción de los costos fijos, por otro lado.

Sergio Faifman: [Foreign language]

Sergio Faifman: Adicionalmente, el incremento de volumen nos debería permitir una mayor dilución de los costos fijos por tonelada.

Speaker #4: And additionally, if volumes increase, that leverage should dilute our fixed costs and give us improvement in terms of margin.

Diego Jalón: Additionally, if volumes increase, that leverage should dilute our fixed costs and give us in terms of margin.

[Translator]: Additionally, if volumes increase, that leverage should dilute our fixed costs and give us in terms of margin.

Speaker #5: Thank you. That was very clear.

Alejandra Obregón: Thank you. That was very clear.

Speaker #4: You're welcome.

Diego Jalón: You're welcome.

Speaker #2: The next question is from Daniel Rojas with Bank of America. Please go ahead.

Operator: The next question is from Daniel Rojas with Bank of America. Please go ahead.

Speaker #6: Good morning. Thank you for taking my question. I wanted to go back to the 25-kilo bag project. Could you give us details on the implementation, on how it has impacted the commercial strategy, and, of course, your pricing?

Daniel Rojas: Good morning. Thank you for taking my question. I wanted to go back to the 25-kg bag project. Could you give us details on the implementation, on how it has impacted the commercial strategy and of course, your pricing? You did mention it has been positive and you've been able to push for higher pricing, but just a little bit more color on how it was implemented. Has it been fully implemented? Did it surpass your expectations? Just anything you can give us. Thank you.

Speaker #6: You did mention it has been positive, and you've been able to push for higher pricing. But could you provide a little bit more color on how it was implemented?

Speaker #6: Has it been fully implemented? Did it surpass your expectations? Just anything you can give us. Thank you.

Speaker #4: Hi, again. Thank you for the question. Efectivamente, hay que recordar que el cambio de bolsa de 50 para 25 fue un requerimiento legal. First of all, I would like to remark that this change of moving from 50-kilo bags to 25-kilo bags was due to a regulation.

Diego Jalón: Hi, Daniel. Thank you for your question.

Sergio Faifman: [Foreign language]

Sergio Faifman: Efectivamente, hay que recordar que el cambio de bolsa de 50 para 25 fue un requerimiento legal.

Diego Jalón: First of all, I would like to remark that this change of moving from 50 kg bags to 25 kg bags was due to regulation.

[Translator]: First of all, I would like to remark that this change of moving from 50 kg bags to 25 kg bags was due to regulation.

Speaker #4: Esto está asociado a un tema de salubridad del peso que las personas mueven cuando levantan la bolsa de 50 kilos. And this is related to improving the conditions of the workers that need to handle these heavy bags.

Sergio Faifman: [Foreign language]

Sergio Faifman: Esto está asociado a un tema de salubridad, el peso que las personas mueven cuando levantan la bolsa de 50 kilos.

Diego Jalón: This is related to improve the conditions of the workers that need to handle these heavy bags.

[Translator]: This is related to improve the conditions of the workers that need to handle these heavy bags.

Sergio Faifman: [Foreign language]

Speaker #4: Si bien había normas que decían que para mover las bolsas había que hacerlo con ayuda mecánica, como eso no se realizaba, se cambió la norma para que las bolsas pasen a 25 kilos.

Sergio Faifman: Si bien había normas que decían que para mover las bolsas había que hacerlo con ayuda mecánica, como eso no se realizaba, se cambió la norma para que las bolsas pasen a 25 kilos.

Speaker #4: Firstly, the regulation was aiming to supply some sort of mechanical support in order to handle this type of bags. And because that is not feasible, the decision was to move from 50-kilo to 25-kilo bags.

Diego Jalón: Firstly, the regulation was aiming to supply some sort of mechanical support in order to handle this type of bags. Because that is not feasible, the decision was to move from 50 to 25 kilo bags.

[Translator]: Firstly, the regulation was aiming to supply some sort of mechanical support in order to handle this type of bags. Because that is not feasible, the decision was to move from 50 to 25 kilo bags.

Speaker #4: Como el costo de dos bolsas de 25 kilos es superior al costo de una de 50, por los costos de envase, de inversión y de operación, and given that the cost of two 25-kilo bags is higher than one 50-kilo bag, only due to the packaging and the operation necessary, el mercado no estaría dispuesto a pagar ese sobrecosto, con lo cual, si uno no cambia toda la producción y toda la venta a 50 kilos, eso no se produciría.

Sergio Faifman: [Foreign language]

Sergio Faifman: Como el costo de dos bolsas de 25 kilos es superior al costo de una de 50, por los costos de envase, de inversión y de operación.

Diego Jalón: Given that the cost of two 25 kilo bags is higher than one 50 kilo bag, only due to the packaging and the operation necessary.

[Translator]: Given that the cost of two 25 kilo bags is higher than one 50 kilo bag, only due to the packaging and the operation necessary.

Sergio Faifman: [Foreign language]

Sergio Faifman: El mercado no estaría dispuesto a pagar ese sobrecosto, con lo cual si uno no cambia toda la producción y toda la venta a 50 kilos, eso no se produciría.

Speaker #4: The market is not willing to accept that increase in costs, so you need to change the whole production or the whole distribution to the new bagging package.

Diego Jalón: The market is not willing to accept that increased cost, you need to change the whole production of the whole distribution to the new bagging package.

[Translator]: The market is not willing to accept that increased cost, you need to change the whole production of the whole distribution to the new bagging package.

Speaker #4: Con lo cual, la norma preveía que, a partir de determinada fecha, todo el mercado de cemento argentino tenía que pasar a bolsas de 25 kilos y dejar de vender de 50.

Sergio Faifman: [Foreign language]

Sergio Faifman: Con lo cual la norma preveía que a partir de determinada fecha, todo el mercado de cemento argentino tenía que pasar a bolsas de 25 kilos y dejar de vender de 50.

Speaker #4: So the regulation demanded that on a specific date, all the industry needed to change to this new bagging format. Y la verdad que tanto la inversión y toda la parte operativa para poder realizarlo, todo fue un éxito; fue una inversión de más de $60 million.

Diego Jalón: The regulation demanded that on a specific date, all the industry needed to change to this new bagging format.

[Translator]: The regulation demanded that on a specific date, all the industry needed to change to this new bagging format.

Sergio Faifman: [Foreign language]

Sergio Faifman: Y la verdad que tanto la inversión y toda la parte operativa para poder realizarlo y todo, fue un éxito. Fue una inversión de más de $60 million. Hemos cumplido el plazo previsto sin ningún impacto en la operación.

Speaker #4: Hemos cumplido el plazo previsto sin ningún impacto en la operación. And on the operational needs, and the financial requirements, it was an investment of more than $5 million.

Diego Jalón: All the operational needs and the financial requirements. It was an investment of more than $5 million. We were able to fulfill it in time, and it was a success.

[Translator]: All the operational needs and the financial requirements. It was an investment of more than $5 million. We were able to fulfill it in time, and it was a success.

Speaker #4: We were able to fulfill it a few times, and there was success.

Daniel Rojas: [Foreign language]

Sergio Faifman: [Foreign language]

Speaker #6: Muchas gracias.

Sergio Faifman: Muchas gracias.

Speaker #4: I was.

Diego Jalón: A vos.

Speaker #2: And this concludes our question and answer session. I would like to turn the conference back over to Diego Jalon for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Diego Jalón for any closing remarks.

Speaker #4: Thank you all for joining us today. And we hope to meet you again in our next quarterly call. Thank you very much, and have a nice day.

Diego Jalón: Thank you all for joining us today, and we hope to meet you again in our next quarterly call. Thank you very much and have a nice day.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Q2 2026 Loma Negra Compania Industrial Argentina SA Earnings Call

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