Business Context and Reporting Period
Loma Negra Compania Industrial Argentina Sociedad Anonima (Loma Negra) filed a Form 6-K on March 10, 2022, presenting results for the fourth quarter and full year ended December 31, 2021. The company operates in the cement, masonry, lime, concrete, railroad, and aggregates sectors in Argentina. Financial results are reported in Argentine pesos (Ps.) and converted to U.S. dollars for convenience using the Central Bank reference rate. Due to Argentina's hyperinflationary status, the company applies IAS 29, restating results to adjust for changes in the purchasing power of the local currency.
Key Financial Metrics
| Metric | 4Q21 (Ps. Million) | 4Q21 (US$ Million) | 4Q20 (Ps. Million) | YoY Change |
|---|---|---|---|---|
| Net Revenues | 19,257 | 187 | 20,019 | -3.8% |
| Adjusted EBITDA | 6,400 | 63 | 7,111 | -10.0% |
| Net Profit (Attributable to Owners) | 2,900 | N/A | 4,500 | -35.6% |
| Consolidated Adjusted EBITDA Margin | 33.3% | N/A | 35.6% | -230 bps |
| Net Debt / LTM Adj. EBITDA | -0.12x | N/A | 0.16x | Improved |
| Cash and Cash Equivalents | 3,306 | 27 | 6,605 | -50.0% |
| Total Debt | 2,500 | N/A | N/A | N/A |
For the full year 2021, Net Revenues were Ps. 73,668 million (+17.3% YoY) and Adjusted EBITDA was Ps. 215 million (+15.4% YoY). Operating cash flow for 4Q21 was Ps. 5,228 million, while capital expenditures totaled Ps. 2,265 million.
Material Changes Versus Prior Period
- Revenue Decline: 4Q21 revenues fell 3.8% YoY, driven by a 4.8% drop in the Cement, masonry & lime segment despite a 3.5% volume increase, indicating softer pricing dynamics. Conversely, Aggregates revenue surged 51.9% due to volume and price recovery.
- Margin Compression: Consolidated Adjusted EBITDA margin contracted 231 basis points to 33.3%. Gross margin declined 152 bps to 34.6%.
- Profitability Impact: Net Profit dropped significantly, influenced by lower operating performance, a shift from net financial gains to expenses (Ps. 418 million expense vs. Ps. 201 million expense YoY), and reduced foreign exchange gains.
- SG&A Increase: Selling, General & Administrative expenses rose 20.9% YoY, primarily due to an allowance for doubtful receivables in the Railroad segment.
- Liquidity Position: The company maintained a net cash position of Ps. 2.8 billion (US$ 27 million) at year-end, reducing debt by US$ 16 million in the quarter.
Guidance, Outlook, and Risks
Management expects cement demand growth to continue in 2022, following recent trends where demand nearly reached all-time highs. The L'Amalí plant's second production line is now fully operational, meeting expectations. The company released its first Sustainability Report, highlighting environmental and community commitments.
Risks and Contingencies: Forward-looking statements are subject to significant risks, including Argentina's political and macroeconomic instability, high inflation rates, peso exchange rate fluctuations, and changes in construction demand. The company notes that actual results may differ materially from projections due to these factors.
Investor Verification Checklist
- Verify the specific exchange rate used for USD conversions, as figures are derived from pre-IAS 29 peso values.
- Confirm the impact of the allowance for doubtful receivables in the Railroad segment on future SG&A trends.
- Monitor the sustainability of the Aggregates segment's 51.9% revenue growth.
- Review the full text of the Sustainability Report for specific ESG targets and compliance metrics.
- Assess the sensitivity of net financial expenses to future inflation and exchange rate volatility in Argentina.