Cementos Argos reports solid final quarter performance

Cementos Argos reports solid final quarter performance
Published: 25 February 2016

Tagged Under: Cementos Argos Results 

Cementos Argos reported a solid performance in 4Q15, with double-digit growth in consolidated revenues and a significant increase in consolidated EBITDA. The growth resulted not only from increased volumes in most regional divisions but also from a recovery in the USA group area, structural improvements in efficiencies and a well implemented price strategy, the company said.

Consolidated revenues in 4Q15 rose 54 per cent compared to the same period of last year to reach COP2.2trn. EBITDA increased by 123 per cent YoY to COP409bn, representing an EBITDA margin of 19 per cent, 592bps above that recorded in 4Q14. Net income reached COP119bn, rising by 170 per cent over the previous year. For full-year 2015, this figure rose to COP491bn, up 81 per cent versus 2014.

Fourth-quarter cement volumes increased by 13 per cent to 3.6Mt, while ready-mix concrete volumes increased by three per cent to 2.9Mm3.

“Reported volumes across all regional divisions represent healthy dynamics in all the markets where we are present, which combined with disciplined financial management and excellent non-operating performance, result in higher levels of profitability,” the group said in a statement.

Colombia
In its domestic market of Colombia, Argos reported a nine per cent YoY increase in 4Q15 cement volumes of 1.6Mt. For the full year, shipments were up by 13 per cent to 6.2Mt. Total cement sales volumes in the country increased by 6.9 per cent, according to the Colombian National Administrative Department of Statistics, DANE.

In the ready-mix business, Argos registered a volume rise of 13 per cent in 4Q15, exceeding overall market growth of 7.4 per cent. Argos’ increase was due primarily to dispatches to the residential sector and its participation in several infrastructure projects, the company highlighted.

In 4Q15 revenues for the Colombia regional division totalled COP803bn, up by 29 per cent YoY. Revenues rose by 24 per cent to COP3trn.  EBITDA during the quarter increased by 50 per cent to COP257bn, reaching an EBITDA margin of 32 per cent.

For 2015 EBITDA was COP878bn, 13 per cent higher than the previous year.

USA
Cement dispatches in the US regional division advanced by 17 per cent in 4Q15 to total 853,000t. For full-year 2015, a 20 per cent increase was recorded to 3.4Mt. The rise was attributed to cement demand growth in the company’s markets of Georgia and South Carolina (17 per cent each), followed by Florida with eight per cent growth.

In the ready-mix business, more than 1.8Mm3 were sold in 4Q15, down one per cent YoY. However, over the full year, there was a five per cent rise in volumes to 7.4Mm3.

The USA regional division registered revenues for US$311m during 4Q15, increasing by eight per cent compared to 4Q14. Year-to-date, there was an increase of 14 per cent, with revenue of US$1244m. 

In the 4Q15 EBITDA rose by 53 per cent to US$24.2m, supported by operational leverage and price recovery. EBITDA for 2015 increased by 62 per cent/

Caribbean and Central America
The Caribbean and Central America regional division sold nearly 960,000t of cement in 4Q15, up by 27 per cent compared to a year earlier, driven mainly by performance of Argos’ operations in Honduras and Eastern Caribbean, as well as its trading business. For the full year, volumes increased by 21 per cent to close to 4Mt.

Ready-mix concrete volumes in 4Q14 were down 10 per cent YoY to 99,000m3.

Revenues for the division were US$131m in 4Q15 and US$540m for the whole year, representing an increase of three per cent for the quarter but a one per cent decline on an annual comparative basis.

EBITDA generated by this regional division  in 2015 reached US$167m, up by one per cent YoY. In December Argos had to write-off US$5.3m of unclaimed sales taxes in Panama.

“The results for the year reflect the healthy performance of the Honduras operation and the important achievements obtained through our organisational excellence programme,” Argos noted.