Cementos Argos 2Q 2019 Profits Jump 150% Year-on-Year

Medellin-based multinational cement/concrete giant Cementos Argos announced August 12 that its second-quarter (2Q) 2019 net income hit COP$73 billion (US$21 million), from COP$29 billion (US$8.5 million) in 2Q 2018.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 44% year-on-year, to COP$475 billion (US$140 million), according to the company.

As for first half (1H) 2019 results, “revenues increased 10.6%, driven mainly by higher cement volumes in the United States and the start of price recovery in Colombia,” according to Argos.

“Cement shipments were close to 8 million tons, 1.2% higher than in the first half of 2018, and concrete shipments were 5 million cubic meters, with a decrease of 2.5% due to the impact of heavy rains in some regions of the United States.”

“In the first half of 2019 we continued to strengthen our operation and our presence in the United States with the execution of the ‘BEST 2.0’ efficiency plan, which, together with better price dynamics that we began to see in Colombia, allowed us to compensate for the pressure we experienced in energy costs,” said Juan Esteban Calle, president of Cementos Argos.

“The significant progress of our divestment plan in non-strategic assets allows us to continue to focus on improving the competitiveness of the company and innovating in products, services and solutions to accompany the growth of our customers,” he added.

In the USA, 1H 2019 revenues rose 3.5% year-on-year, to US$781 million, while EBITDA remained stable at US$108 million.

Cement shipments in 1H 2019 in the USA increased 6.9%, exceeding 3 million tons, while concrete shipments decreased 3.8%, mainly due to heavy rains in the south-central region.

In Colombia, 1H 2019 revenues rose 3.3% year-on-year, to COP$1.1 trillion (US$324 million), but EBITDA dipped 4%, to COP$186 billion (US$55 million) because of higher energy costs.

Colombian cement shipments totaled 2.4 million tons in 1H 2019, down 2.5%, but concrete shipments held steady, at 1.4 million cubic meters.

As for its Caribbean and Central American markets, Argos stated that “operations in the Dominican Republic and Haiti continue with a positive performance, compensating to some extent the challenging political environment that was evident during the period in Honduras and Panama.”

In Caribbean/Central American region, 1H 2019 revenues dipped 4.5% year-on-year, to US$286 million, while EBITDA fell 19.8% year-on-year, to US$79 million. Cement shipments dipped 1.5% year-on-year, to 2.5 million tons, while concrete shipments declined 3%, to 194,000 cubic meters, according to the company.

Despite the regional declines, “Argos maintains its favorable outlook in a region that advances important infrastructure and housing plans, which add to the progress in the reconstruction of Puerto Rico,” according to the company.