Loma Negra's Q1 2025: Unpacking Contradictions in Pricing Strategy, Volume Recovery, and Market Dynamics

Pricing strategy and frequency, volume recovery and market conditions, market share and pricing strategy, cement volume expectations, pricing strategy and inflation adjustment are the key contradictions discussed in Loma Negra's latest 2025Q1 earnings call.



Industry Recovery and Economic Growth:
- The industry posted an 11% year-over-year increase in the first quarter, despite adverse weather conditions.
- Renewed optimism is driven by a recent forecast projecting approximately 5% GDP growth for the Argentine economy, which should benefit the construction sector.

Cement Consumption and Pricing Dynamics:
- Cement consumption showed signs of improvement, with April fuel rates nearly 28% higher year-over-year, and up 13% on a sequential basis.
- The increase in pricing was partially offset by softer pricing dynamics, but prices remain above the evolution of internal cost structure.

Cost Management and Margin Improvement:
- Loma Negra's adjusted EBITDA margin expanded to 24%, representing a year-over-year increase of 140 basis points.
- Margin improvement was driven by effective cost management and lower energy input costs.

Financial Stability and Debt Position:
- Net debt increased sequentially to $174 million, with a net debt-to-EBITDA ratio remaining comfortable below one times.
- The increase was due to typically capital-intensive first quarter, but the company maintains a solid financial position.

Segment Performance and Challenges:
- The Cement segment reported a 10.9% revenue drop despite an 8.9% year-over-year increase in volumes, while Concrete saw a 1.4% revenue decline.
- The Aggregates segment faced a 14.2% revenue decline despite a 29% increase in sales volumes, impacted by weak market activity and unfavorable product mix.