Argos sees 2Q profit slide but notes improved 1H net income

Colombia's cement market leader, Cementos Argos, saw revenues advance by 1.4 per cent to COP2.184trn (US$727m) in the 2Q18 from COP2.154trn in the year-ago period. Operating EBITDA fell by 11.2 per cent to COP328.3bn in 2Q18 when compared with COPCOP369.7bn in April-June 2017.

In addition, Cementos Argos reported a 59.7 per cent drop in net profit to COP29.4bn in the April-June 2018 quarter, when compared to 2Q17. The company attributed the decline to a deceleration of construction markets.

However, cement volumes remained largely stable at 4.205Mt in 2Q18 (2Q17:4.169m) as did ready-mix concrete volumes at 3.737Mm3 (2Q17: 2.719Mm3).

In the first six months of 2018 revenues increased 3.3 per cent YoY to COP4.091trn, up from COP4.231trn in 1H17. Operating EBITDA saw a 7.2 per cent rise to COP352.466bn from COP286.166bn in the year-ago period. Net consolidated income improved 93.7 per cent to COP111.181bn, when compared with COP57.396bn in 1H17.

"The results for this quarter show the massive effort for cost discipline as part of our BEST program in all regional divisions but especially in Colombia where, as long as the demand continues to be slower than our expectations we have to double up on any effort to make sure that we continue improving profitability. For the second half of the year, we expect to remain on budget in the US; to see improvements in the demand side in Colombia, benefiting from a more stable political environment that is boosting consumer confidence; and to continue experiencing stable results from Central America and the Caribbean where Puerto Rico and the eastern Caribbean operations are compensating the slower demand that we are facing in Panama," Juan Esteban Calle, CEO of Cementos Argos.