Loma Negra: A Rainy Quarter, But the Recovery Path Remains Intact
Argentina's cement leader sees volumes dip 1.4% but revenue up 2.1% as it navigates a weak April, cost pressures from its 25-kg bag rollout, and a cautious optimism for H2.
LOMA.BA · Earnings Call · 2026-08-07
Quarter in Review
Loma Negra's second quarter was a study in contrasts. Volumes were down, but pricing held; margins compressed, but dollar-based EBITDA per tonne rose; and the company reaffirmed its recovery thesis even as it acknowledged the path is bumpy. CEO Sergio Faifman opened the call with a clear message:
Performance during the quarter was mainly affected by a weak April, impacted by heavy rains. While May and June trends more in line with the level registered a year ago.
The numbers bear this out: cement volumes slipped 1.4% year-over-year, yet consolidated net revenue rose 2.1% to Ps. 238.1 billion. The resilience came from pricing. Adjusted EBITDA fell 2.5% to Ps. 48.2 billion, with margin down 97 basis points to 20.2%, but in dollar terms EBITDA per tonne stood at $32.10, up 14% year-over-year—a sign that the company is not simply passing through inflation but actually gaining efficiency.
The quarter also saw a notable strategic move: Loma completed the sale of its Class 4 corporate bonds for $10 million, leaving no remaining structured debt maturities for the rest of the year. Net debt stood at $185 million, a comfortable 1.3x adjusted EBITDA. This gives the company runway to navigate the recovery without refinancing risk.
The 25-kg Bag Transition
One of the most discussed topics on the call was the mandatory shift from 50-kg to 25-kg bags, a regulatory change aimed at improving worker safety. CFO Marcos Gradin explained the cost impact: “Given that the cost of 2 bags of 25-kilo bags is higher than 1 50-kilo bag only due to the packaging and the operation necessary, the market is not willing to accept that increased cost.” — Marcos Isabelino Gradin, Unknown · 2026-08-07 The company has had to absorb higher packaging and depreciation costs, but it also successfully passed on price increases. Gradin noted that this initiative, which involved more than $5 million in investment, has been fully implemented and is now contributing to top-line growth. This kilo bag transition is a company-specific theme that sets Loma apart from global peers—most cement makers do not face such a regulatory shift.
The Pricing dynamics during the quarter were positive, with management expressing confidence in its ability to maintain margins. However, the Railroad segment was a drag, with adjusted EBITDA margin turning negative at -5.2% due to higher fuel and labor costs. This is a sharp reversal from the +9.8% margin a year ago, and it underscores the cost pressure from fuel prices and transport volumes.
Outlook: RIGI, Credit, and the Path Forward
Looking ahead, Loma remains cautiously optimistic despite acknowledging that first-half volumes came in below expectations. Faifman cited several tailwinds: “We are beginning to see some of the project approval under the RIGI regime starting to move forward.” — Sergio Damian Faifman, Unknown · 2026-08-07 He also mentioned road concessions and a possible easing of monetary conditions. The company expects September to be the strongest month for cement dispatches, a seasonal pattern that should provide a boost.
This optimism is not new. In the prior year's second-quarter call, Faifman had said: “We believe that this trend is going to continue with similar volumes of the ones that we saw in July.” — Sergio Faifman, Chief Executive Officer · 2024-08-08 The difference now is that the recovery is taking longer than expected, and management is candid about it. They also face a structural headwind: Bulk cement is outperforming, but the more profitable cement dispatches overall remain constrained by weak retail demand.
The market has taken notice of the mixed signals. While the stock has no defined price trend in the provided data, the company's keyword trajectory shows a clear shift. kilo bag jumped to the top of the ranking, and Pricing dynamics became a major topic, indicating that investors are focused on how Loma navigates cost inflation and regulatory changes.
In summary, Loma Negra is weathering a temporary slowdown with solid pricing power and a clean balance sheet. The 25-kg bag transition is a unique cost hurdle, but the company has managed it well. The real test will be whether RIGI projects and broader economic recovery translate into volume growth in the second half. As Faifman put it, "the recovery path is unlikely to be a straight line," but the underlying trend remains positive.