Loma Negra (LOMA) Q3 2026 Earnings Call Transcript

Loma Negra's Q3 2026 revenue fell 3.2% year over year to Ps. 170 billion and adjusted EBITDA declined 6.7% to Ps. 54.2 billion, with cement volumes down 6.3% amid soft activity and heavy winter rainfall. Cement-segment EBITDA margin expanded 67 bps to 24.9%, operating cash flow more than doubled to Ps. 86.3 billion, and net debt fell to $145 million; net income was Ps. 15.2 billion versus a year-ago loss. Management cited a September cement-dispatch rebound and participation in seven tenders as potential demand support, while noting an uneven recovery; the company issued a $150 million bond at 6.25% to refinance maturities.

Analysis

The key question is whether LOMA’s cement pricing can protect earnings until project demand arrives. Its bulk mix is relatively resilient, but the weakness in bagged cement makes recovery dependent on household purchasing power and credit—an economic channel that may lag infrastructure awards. RIGI tenders offer a medium-term catalyst, not yet bankable volume: management gave no dispatch forecast, and mining projects may be delayed. The urea project’s stated concrete requirement is not evidence of a material company-wide earnings contribution.

Near term, September’s rebound is a weather-sensitive signal rather than proof of a sustained demand inflection; management also described renewed weakness in rainy October conditions. The cement margin and dollar EBITDA-per-ton metric indicate pricing/cost discipline is cushioning volume pressure, but consolidated earnings remain exposed to concrete losses and a railroad segment that has swung sharply negative. Persistent rail maintenance and payroll costs could absorb some benefit from cement recovery.

Cash generation deserves a quality discount: management attributed the step-up largely to working capital, including lower inventory and higher tax payables, so it should not be annualized without evidence of recurring operating cash conversion. Lower leverage helps, while the short average debt maturity and dollar-heavy debt leave refinancing and currency mismatch relevant risks; the October bond refinances maturities but does not itself resolve operating volatility.

At this evidence level, the consensus risk is treating weather normalization and project tenders as a smooth 2027 volume recovery. A sustained dispatch recovery and awarded projects could improve utilization and earnings, but weak real wages, renewed rains, tender delays, or continued rail losses would falsify that upside. No valuation data are supplied to support a price target.

Key Decisions for Investors

• No immediate directional trade in LOMA: avoid chasing the September bounce. Reassess after one to two monthly dispatch releases establish whether the rebound persists beyond favorable weather.
• Treat a long LOMA as conditional, not a base case: build exposure only after evidence of sustained cement-volume recovery and disclosed awards or volume guidance for RIGI-linked projects. The 1–3 month catalyst is dispatch data; the 6–18 month thesis depends on project execution and broader construction demand.
• Track cement pricing and EBITDA per ton alongside segment results. A volume recovery that fails to lift cement contribution, or continued negative railroad EBITDA margin, weakens the operating-leverage case; consider reducing exposure if those trends persist.
• Do not extrapolate quarterly operating cash flow. Verify subsequent cash conversion after working-capital movements, and monitor debt maturities, refinancing terms, and the effect of dollar-denominated obligations against peso cash generation.