Loma Negra’s 2025 Q3 Earnings Call: Contradictions Emerge on Pricing, Dividends, and Volume Recovery

Date of Call: November 7, 2025

Financials Results

• Revenue: Top line declined 12.1% year-over-year
• Gross Margin: 17.3%, down 524 basis points year-over-year
• Operating Margin: Adjusted EBITDA margin 20.8%, down 315 basis points year-over-year

Guidance:

• Expect prices to rise above inflation going forward; FX stability should help recover dollar-equivalent pricing.
• October volumes showed a recovery; company expects continued volume improvement if rates stay low and FX remains stable.
• Public works and resumed investment projects should add volume as uncertainty eases post-election.
• No dividends expected for the rest of this year; dividend policy will be reassessed in 2026.

Business Commentary:

• Volume Decline and Recovery Signs:
• Loma Negra reported a 5% year-over-year decline in shipping levels during Q3, primarily due to a slower broader economy and uncertainty surrounding the sustainability of the economic framework.

• Volume recorded in September and October showed encouraging signs of recovery, with October volumes increasing by 7.4% year-over-year.

• Profitability and Cost Management:

• The company's consolidated adjusted EBITDA margin contracted to 20.8% in the quarter, reflecting a 23.7% reduction in pesos due to higher cost pressure.

• Effective cost management, particularly in thermal energy inputs, helped offset the weaker pricing environment and maintain profitability.

  

• Infrastructure and Public Works Impact:

• The recovery trend in cement dispatches experienced a slowdown, with a 1% decline in the quarter, mainly due to uncertainty around the election process.

• Renewed strength in October's volumes, up 7.4% year-over-year, is expected to continue as uncertainty eases following the election results, potentially unlocking investment projects.

• Dividend Distribution Prospects:

• Given the macroeconomic situation in Argentina, including high interest rates and political uncertainty, Loma Negra has not advanced in paying dividends for the remainder of the year.
• The company will reassess the possibility of paying dividends in the future, depending on the macroeconomic scenario.

Sentiment Analysis:

Overall Tone: Neutral

• Company reported adjusted EBITDA of $36M (down 23.7% YoY) and a net loss of ARS 8.5B vs. ARS 27.9B gain a year ago, but management stated the election result could provide stability and expressed optimism that volumes and pricing will recover if FX and rates stabilize.

Q&A:

• Question from Marcelo Palhares (Itaú Corretora de Valores S.A., Research Division): Pricing outlook after ~ $10/ton decline in USD — how will prices evolve in USD terms? And likelihood/timing of a dividend distribution this year or in 2026?
  Response: Management expects to increase prices above inflation going forward and recover USD pricing with FX stability; no dividends planned for the rest of this year and dividend decisions will be re-evaluated next year.

• Question from Andres Cardona (Citigroup Inc., Research Division): Early color for 4Q volumes — what drove the October improvement and do you see those dynamics persisting in November/December?
  Response: October recovery driven by projects restarting after election uncertainty and a favorable FX adjustment lowering dollar costs; management is optimistic volumes will continue if low rates, stable FX and public works persist.

Contradiction Point 1

Pricing Dynamics and Recovery

It directly impacts expectations regarding pricing strategies and market recovery, which are critical for financial forecasting.

What is the company's future pricing strategy and expected price evolution in dollar terms? - Marcelo Palhares (Itaú Corretora de Valores S.A., Research Division)

2025Q3: The pricing dynamics are similar to the previous quarter. Prices are expected to increase above inflation in the second half of the year. FX corrections impacted dollar prices this quarter, but with a stable scenario, prices are expected to recover. - Sergio Faifman(CEO)

What's your outlook for the construction sector in H2, and what are the potential drivers? - Sofia Vatta (Latin Securities)

2025Q2: Loma Negra sees a slow recovery in construction activity, with moderate growth expected for the rest of the year. Public works in provinces like Buenos Aires and Santa Fe are showing positive momentum, and private infrastructure projects are expected to start by the end of the year. - Diego Jalón(IR Manager)

Contradiction Point 2

Dividend Distribution Expectations

It involves changes in financial forecasts, specifically regarding dividend payouts, which are critical indicators for investors.

What is the likelihood of a dividend in 2025 or 2026? - Marcelo Palhares (Itaú Corretora de Valores S.A., Research Division)

2025Q3: Given macro conditions, dividends have not been advanced this year. The new macro scenario will influence dividend payout decisions for next year. - Sergio Faifman(CEO)

What volume growth (low double digits or mid-teens) is expected for 2025? What cost efficiency expectations for H2? What margin expectations? Dividend outlook for 2024? - Marcelo Furlan Palhares (Itaú Corretora de Valores S.A., Research Division)

2025Q2: Loma Negra is analyzing financial alternatives but currently has no provisions for paying dividends. - Diego Jalón(IR Manager)

Contradiction Point 3

Volume Recovery and Market Demand

It directly impacts expectations regarding volume growth and market demand, which are critical for revenue forecasting.

What factors contributed to October's unexpectedly strong volume, and will they persist in November and December? - Andres Cardona (Citigroup Inc., Research Division)

2025Q3: The recovery was driven by investments and projects gaining momentum after elections and FX adjustments. Optimism exists for stable macro conditions to increase activity levels. Public works and infrastructure projects are expected to contribute more volume. - Sergio Faifman(CEO)

What volume growth rate do you expect for 2025? What cost efficiencies are expected in the second half of the year? What margin changes are expected? Are dividends expected this year? - Marcelo Furlan Palhares (Itaú Corretora de Valores S.A., Research Division)

2025Q2: Loma Negra maintains a double-digit growth forecast for the year, with expectations of a pricing recovery in the upcoming months, despite some cost pressures from winter. - Diego Jalón(IR Manager)

Contradiction Point 4

Pricing Dynamics and Inflation

It involves differing perspectives on how pricing dynamics will adjust with changes in inflation, which impacts revenue and profitability forecasts.

How will the company's pricing strategy and dollar pricing evolve? - Marcelo Palhares (Itaú Corretora de Valores S.A., Research Division)

2025Q3: The pricing dynamics are similar to the previous quarter. Prices are expected to increase above inflation in the second half of the year. FX corrections impacted dollar prices this quarter, but with a stable scenario, prices are expected to recover. - Sergio Faifman(CEO)

With slowing inflation, will pricing dynamics become less frequent? How might this impact volumes and revenues? - Marina Mertens (Latin Securities)

2024Q3: We're closely monitoring pricing dynamics and adjusting prices monthly. With lower inflation, we plan to adjust prices every 3-4 months, avoiding large, infrequent price hikes. - Sergio Faifman(CEO)

Contradiction Point 5

Volume Recovery and Market Share

It involves differing expectations regarding volume recovery and market share, which are crucial for understanding the company's operational performance and competitive position.

What factors drove October's better-than-expected volume, and will they sustain into November and December? - Andres Cardona (Citigroup Inc., Research Division)

2025Q3: The recovery was driven by investments and projects gaining momentum after elections and FX adjustments. Optimism exists for stable macro conditions to increase activity levels. Public works and infrastructure projects are expected to contribute more volume. - Sergio Faifman(CEO)

What are the current competitive dynamics, particularly regarding market share and regional demand? Are there any emerging trends in competitive dynamics for 2025? - Alejandra Obregon

2025Q1: Loma Negra's market share is within the expected range and not a concern. The slight difference in market share is attributed to seasonal weather impacts and pricing strategy adjustments. The company remains focused on its strategy and maintaining a stable market share. - Sergio Faifman(CEO)