Cementos Argos - February 2019

Unfavourable weather has been blamed for a three per cent fall in cement volumes by Cementos Argos in 4Q18. Consolidated cement volumes came in at 3.904Mt during the three-month period, compared to 4.026Mt in 4Q17. Ready-mix volumes also declined, down by seven per cent YoY from 2.567Mm3 to 2.387Mm3. Revenues remained unchanged at COP2.108trn (US$683.9m), while adjusted EBITDA slipped by 5.5 per cent to COP356bn with a 16.9 per cent margin. According to the company, along with heavy rainfall in the US, the quarter saw higher electricity and fuel costs across the business, particularly in Colombia.

In the US poor weather and a 43-day long closure of the Martinsburg plant resulted in a nine per cent YoY drop in cement volumes. US cement volumes in 4Q18 stood at 1.336Mt, compared to 1.468Mt in the same period a year earlier. RMC volumes also fell, declining by 10.7 per cent to 1.573Mm3. Revenue for the period was down by 9.8 per cent YoY to US$342m, while EBITDA came in at US$58m, down 15.3 per cent. Housing, commercial, industrial and infrastructure projects are expected to ramp up in 2019, according to the company.

In Colombia a strong housing market and advances in infrastructure projects resulted in a 7.7 per cent YoY uptick in cement volumes in 4Q18 to 1.337Mt. RMC volumes also grew, up by 2.2 per cent at 717Mm3. Revenue during the quarter posted a 6.6 per cent increase to COP580bn, in line with volume growth and a recovery in prices. Nevertheless, adjusted EBITDA declined by 15.3 per cent to COP99bn and the adjusted EBITDA margin closed at 17.1 per cent, mainly due to rising energy prices, particularly coal.

The Caribbean and Central America markets remained stable during the 4Q18. Cement and RMC dispatches fell by 6.5 and 6.9 per cent, respectively, to 1.231Mt and 97Mm3, “reflecting the challenging conditions of the Panamanian market after the May 2018 construction strike,” according to the company. Revenue for the region declined by 4.5 per cent YoY to US$138m with EBITDA of US$36m, up 2.1 per cent YoY, and an EBITDA margin of 26.2 per cent.