Cementos Argos 1Q 2021 Profits Skyrocket 1,227% Year-on-Year

Medellin-based multinational cement/concrete giant Cementos Argos announced May 10 that its first quarter (1Q) 2021 net profit soared 1,227% year-on-year, to COP$55 billion (US$14.8 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose 30% year-on-year, to COP$445 billion (US$120 million).

Gross revenues rose 6.3%, to COP$2.3 trillion (US$620 million), according to the company.

Cementos Argos is a major player in 16 Western-hemisphere countries including the U.S., Colombia and the Caribbean-Central America (CCA) region, with total annual capacity of approximately 23 million tons of cement and 16 million cubic meters of concrete.

During 1Q 2021, “consolidated cement volumes posted a year-over-year growth of 19%, reflecting a low comparison base and a solid market environment across all regions,” according to Argos.

“The macroeconomic context for the U.S. continues to be positive in relation with the construction sector, supported by the performance of the residential segment, which remains strong in terms of permits and housing starts.
“On the infrastructure side, the U.S. government recently announced a proposal named ‘American Jobs Plan,’ which indicates a US$2 trillion investment over the next eight years. Once approved, this plan is expected to increase cement demand in the next 12 to 18 months.”

Colombia Results

During 1Q 2021, “the cement industry in Colombia continued showing signs of full recovery. As a result, our cement volumes grew 19.4% versus the same period of 2020, benefited by a weak comparison base. Compared to the first quarter of 2019, dispatches were 2.8% higher.

“In the ready-mix concrete business, volumes grew 3.3% during the quarter, but are still below 2019 levels, reflecting a slower pace of recovery in formal construction.

“Regarding market environment, in the first three months of 2021 the Colombian industry continued the positive dynamic evidenced since September 2020 in terms of volume, as the retail segment continued leading the recovery on demand. Meanwhile, formal construction continued its recovery path as a result of an increase in housing starts and stability on the execution of infrastructure projects.”

Colombia revenues rose 15.3% year-on-year, to COP$603 billion (US$163 million), while EBITDA rose 18.9%, to COP$145 billion (US$39 million), according to the company.

CCA Results

“Cement volumes improved during the quarter on a yearly basis as Panama showed signs of recovery and the rest of the [Central American] countries experienced strong demand conditions associated with the strong self-construction trend that continued as remittances remained at high level during the first three months of 2021,” according to Argos.

“During the quarter ready-mix volumes decreased 13.7% compared to the same period of last year as a result of a slower pace of recovery of the industrial segment, especially in Panama.

“Weighted average cement prices decreased 1.3% on a yearly basis. Our performance in terms of volume led to a revenue growth. Nevertheless, despite lower prices during the quarter and the revaluation of the currency in Haiti, EBITDA increased year over year reaching US$41 million,” the company added.