Cementos Argos 1Q 2023 Profits Jump 10-Fold Year-on-Year

Medellin-based multinational cement/concrete giant Cementos Argos announced May 9 that its first quarter (1Q) 2023 net income skyrocketed 10-fold year-on-year, hitting COP$118 billion (US$26 million), its best-ever 1Q in history.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) likewise jumped 71% year-on-year, to COP$593 billion (US$131 million), while revenues rose 31%, to COP$3.38 trillion (US$747.7 million), according to the company.

Exports from its Cartagena, Colombia plant to the United States grew by 81% during the latest quarter, boosting both revenues and profits.

“Grupo Argos continues to show the benefits of its geographical diversification and its presence in the United States,” according to the company.

“These results account for the successful execution of our pricing strategy, efficient cost management and stable dynamics in the markets where the company operates,” according to Argos.

“On a consolidated basis, the company dispatched 3.9 million tons of cement, 0.6% less than in the first quarter of 2022 — an impact caused, to a large extent, by the slight declines in the Colombian market.

“On the other hand, volumes of concrete were 1.7 million cubic meters, with a slight decrease of 2.3%. This was mainly due to unfavorable weather conditions in the United States,” the company added.

“In the first quarter of the year we experienced stable market dynamics in most of the territories in which we have a presence, sequential improvements in costs, especially in fuels, energy and, in some cases, raw materials, and mixed macroeconomic signals that keep us optimistic about medium-term trends,” according to Cementos Argos president Juan Esteban Calle.

USA Highlights

So far this year, U.S. cement volumes rose 7.1%, to 1.5 million tons, “leveraged by the import of product, favored by our extensive logistics network of ports and terminals,” according to Argos.

“Concrete shipments decreased by 2.5%, to 1.1 million cubic meters, affected to a large extent by detrimental weather conditions in the region, specifically in Georgia.”

U.S. operations saw revenues rise 22% year-on-year, to US$416 million, while EBITDA rose 77%, to US$65 million, with EBITDA margin up 483 basis points.

Colombia Highlights

Colombian cement volumes dipped 4.6 % year-on-year, to 1.4 million tons, “mainly impacted by the drop in the local market and the closure of the main road between Popayán and Pasto, which altered efficiency supply logistics to the southwest of the country,” according to Argos.

Concrete volume likewise dipped 4.3%, to 621 million cubic meters, the company added.

“Of total shipments, Colombian sales volumes abroad were 345 million tons, with an increase of 16%,” according to Argos.

“In a challenging environment, Colombia revenues reached COP$712 billion [US$157 million], 13% higher than the same quarter of 2022. In addition, EBITDA stood at COP$181 billion [US$40 million], 39% higher than last year,” the company added.

Caribbean and Central America Highlights

In this region, Argos cement shipments dipped 5.2% year-on-year, to 1 million tons, while concrete volumes rose 22% year-on-year, to 71 million cubic meters.

“This slight impact is the result of Argos’ strategy of replacing trading volumes with exports from its Cartagena plant to supply its markets in the region,” according to the company.

For the Caribbean/Central America region, Argos revenues rose 5% year-on-year, to US$145 million, while EBITDA grew by 2%, to US$30 million.

“These results were leveraged to a large extent by the satisfactory recovery of cement volumes in Panama and the Dominican Republic, which increased by 21% and 14%, respectively, and the commitment to new products that diversify Argos’ value proposition,” the company added.