Loma Negra: Seven Tenders, Zero Tonnage

A rain-truncated quarter, a net-income swing that came from the financial line, and an investment catalyst management has now promised for a third straight year without quantifying

LOMA.BA · Earnings Call · 2026-11-06

The quarter the weather wrote

Loma Negra's third quarter of 2026 is, on its face, another Argentine cement quarter: lower volume, pricing holding the line, margins roughly flat. Cement volumes fell 6.3% year over year against an industry that fell 3.9%. Consolidated revenue slipped 3.2% to Ps 170 billion. Adjusted EBITDA fell 6.7% in pesos to Ps 54.2 billion, margin down 74 basis points to 20.1%. But the shape of the quarter is entirely a rainfall story, and management said so with unusual candor. July and August industry dispatches were down 8.2% each; September rebounded 4.5% year over year and 18% sequentially once the weather cleared. Then October rained again. Sergio Faifman did not hide behind segment mix or macro: “In October, again, with some rain, volumes are, again, below. But when we see days with good climate, the difference is between 15%, 20% with these days with these rainy days.” — Sergio Damian Faifman, Chief Executive Officer or Senior Executive · 2026-11-06 That is a genuinely useful disclosure — a 15–20% swing between wet and dry days is a demand curve, not a demand collapse. It also means the weather condition keyword rising into the company's top-ten this quarter is not boilerplate; it is the actual operating variable. What is striking is the mix inside the volume number. Bulk cement grew 2% while bagged cement fell 8%. Bagged is the retail-and-real-wage channel — self-build, small contractors, the part of the Argentine consumer that still has not recovered. Bulk is projects, and bulk is gaining share of mix. The fact that bagged cement is the top-ranked keyword for Loma this quarter, displacing the bulk narrative that dominated prior periods, is the tell: the company's problem is now consumer credit and real wages, not construction capacity. Yet the price-over-volume strategy is working where it counts. Cement segment adjusted EBITDA margin expanded 67 basis points to 24.9%, and EBITDA per ton in dollars rose 24% year over year to $32.5 — in what is seasonally the weakest quarter of the year because of winter energy costs. That is the strongest evidence in the release that the pricing discipline of the last several years has survived a volume trough.

The RIGI promissory note, now in year three

Here is where the story stops being routine. Loma's bull case for two years has rested on RIGI — Argentina's large-investment incentive regime — funnelling mining, oil and gas, and infrastructure projects into bulk cement demand. The keyword public works has oscillated around this company's transcripts since the 2024 transition, usually paired with a version of "soon." In August 2024, the CEO said: “As we believe in the next two weeks we are going to see what the recommendation for the Rige program.” — Sergio Faifman, Chief Executive Officer · 2024-08-08 In August 2026: “We expect them to start to start showing some impact on our volumes in the upcoming months.” — Sergio Damian Faifman, Unknown · 2026-08-07 And on this call — November 2026 — the answer finally got specific in count but not in size:

We do not have exact figures in terms of tons and volumes. Regarding the Rigi for 2027. What can I say is that we are participating in 7 tenders? That are significant projects. Many of those have periods of 24, 30 months.
Sergio Damian Faifman, Chief Executive Officer or Senior Executive · 2026-11-06

Seven tenders is a real number. The urea plant with Pampa is a real project — roughly 300 thousand cubic meters of concrete, which Faifman was quick to note is not material on its own: "Individually, there is no project that has a significant weight in terms of cement dispatches." Mining projects, meanwhile, are described as "a little bit backlog due to the political atmosphere," while oil and gas is advancing "at a more accelerated pace." That is a portfolio of catalysts, not a catalyst — which is precisely why the equity has never been able to price it. The honest read: after eight-plus quarters of RIGI being the answer to "what drives 2027," management still cannot tell you how many tons. The tone is optimistic but the quantification is absent, and that gap is the single most important thing in this transcript.

Where the profit actually came from

The headline that will get quoted is the swing from a Ps 11.3 billion net loss to Ps 15.2 billion of net income. It did not come from cement. Operating performance was weaker. It came from the financial line: a net financial gain of Ps 8.5 billion against a loss in the prior-year period, with net financial expenses collapsing to Ps 7.9 billion from Ps 23.3 billion as peso depreciation moderated. In a high-inflation, peso-liability economy, that line item is a genuine earnings lever — and to management's credit, Marcos Gradin walked through it plainly rather than burying it. Cash was the other genuine bright spot. Operating cash flow of Ps 86.3 billion more than doubled year over year, helped by working capital release — better receivables, lower inventory, higher tax payables. CapEx was held at Ps 18.1 billion. Net debt fell to $145 million, taking net debt to adjusted EBITDA to 1.0x from 1.39x a year ago and 1.47x at end-2025. Then, on 22 October, Loma issued a $150 million corporate bond in the local market — Class 7, 30-month fixed tenor, 6.25% — to refinance near-term maturities and stretch a weighted average life that sits at just 1.2 years, with 91% of debt dollar-denominated. That bond is the quiet signal of the quarter: a provincial cement company with a 1x leverage ratio accessing 30-month fixed-rate local money at 6.25% is a company whose refinancing risk has genuinely de-risked. It is also why the corporate bond theme moved up sharply in this quarter's keyword set.

What the global tape says — and doesn't

Walk across the building-materials complex this reporting season and the contrast is stark. Wood Products is a top-five global keyword this quarter, and the North American reporters behind it — BCC, RYN, LPX, JHX, TREX, WTS — are all narrating the same story: soft residential starts, channel inventory discipline, tariff refunds as a margin offset, price/cost neutrality. Their demand problem is rates and housing turnover. Loma's demand problem is a wet winter and a consumer without credit. That is a completely different cycle, and it is why Loma's price-over-volume economics can work while US building-products peers fight for mix. The one shared thread is that both are running on cost discipline and pricing rather than volume — an industry-wide posture, not a company insight. So what changed? Not the operating story: cement margin up, EBITDA per ton in dollars up 24%, leverage down, refinancing secured. What changed is the burden of proof. Loma has spent two years telling investors RIGI would arrive. This quarter it told them there are seven tenders in motion — and still no tonnage. Until management can convert "seven tenders" into a dispatch number, the stock trades on Argentine weather forecasts, not on 2027.