Argos records revenues of COP2.2trn in 1Q20
In the first three months of 2020, Argos (Grupo Argos) reported revenues of COP2.2trn (US$5.6bn), a figure that remains stable when compared to 2019.
EBITDA, including the effect of IFRS16, was COP343bn, decreasing one per cent when compared to the same quarter of the previous year. During the period, the total volume of cement dispatched reached 3.6Mt, down 6.1 per cent, and ready-mix volumes fell 10.7 per cent to 2.1Mm3.
"In general, the results were impacted mainly because of the closure of operations in Colombia and in some countries of the Caribbean and Central America and, to a lesser extent, by the poor weather conditions experienced in some areas of the United States," said Argos.
Regional results
In the USA Argos obtained revenues of US$350m, with a decrease of 6.1 per cent when compared to the same period in 2019. Likewise, EBITDA closed at US$38m, a decrease of 6.1 per cent, mainly due to the higher maintenance costs at Argos' Martinsburg and Newberry plants, which were carried out during the first months of 2020.
During the 1Q20, cement volumes decreased slightly by 1.2 per cent, which shows resilience when facing the COVID-19 crisis in the states where the company has operations. On the other hand, ready-mix dispatches decreased 5.5 per cent, affected by the aforementioned weather conditions.
In Colombia revenues reached COP523bn, which represents a decrease of 6.1 per cent when compared to the same period in 2019. EBITDA had an increase of 15 per cent in comparable terms and totalled COP122bn. This improvement was mainly due to a significant reduction in maintenance costs and the efficiencies implemented starting in the 2H19, which led to a decrease in energy costs of 8.8 per cent, when compared to the same quarter last year.
Cement dispatches were located at more than 1Mt, with a decrease of 13.9 per cent, and ready-mix shipments totalled 554,000m3, 19.5 per cent less. Both were impacted by the closure of operations towards the end of March, as a result of the government-mandated isolation.
In the Caribbean and Central America, the general results were equally impacted to a large extent by the slowdown in the markets due to the COVID-19 and by the lower price pull in Honduras and Panama. Revenues and EBITDA decreased 16.9 and 33.5 per cent, respectively, including the effect of IFRS16. For its part, shipments reached 1.2Mt of cement, with a decrease of 4.1 per cent, and those of ready-mix stood at 61,000m3, 34.1 per cent less compared to the same period of the previous year.
"During January and February 2020, Honduras and the Dominican Republic had better market dynamics when compared to the last quarter of 2019. For its part, Haiti continued with constant growth. Lastly, the Panamanian government has demonstrated its drive to boost the local economy and protect national production by imposing a 30 percent tariff rate on cement imports into the country," added Argos.
In the current context, the company expects a greater migration towards Argos ONE, its digital tool that allows customers to reserve, order and track their cement and ready mix dispatches. During March, Argos ONE represented 70 per cent of Colombia's cement shipments, 41 per cent in the United States, 35 per cent in Honduras, and 23 per cent in Panama. On the ready-mix side, it represented 49 per cent in Colombia, three per cent in the United States, and 33 per cent in Panama.
