Cementos Argos 3Q 2017 Profits Drop 42% Year-on-Year

Medellin-based multinational cement and concrete manufacturer Cementos Argos reported November 10 that its third quarter (3Q) 2017 net income fell 42% year-on-year, to US$22 million, down from US$38 million in 3Q 2016.

However, operating income grew 3.9% year-on-year, to COP$2.19 trillion (US$728 million), according to the company.

Cement deliveries also grew 16.7% year-on-year, to 4.2 million tonnes, but concrete deliveries fell 6.1% year-on-year, to 2.7 million cubic meters.

Earnings before interest, taxes, depreciation and amortization (EBITDA) excluding non-recurring expenses rose 7.5%, to COP$428 billion (US$142 million), according to the company.

In its U.S. operations, cement deliveries rose 49.4% year-on-year, thanks largely to its recently acquired plant in Martinsburg, West Virginia. Gross income in its U.S. operations rose 14.9%, to US$404 million, while adjusted EBITDA soared 50% year-on-year, to US$73.5 million, according to the company.

Growing construction of U.S. homes, along with US$38 billion worth of infrastructure projects in Maryland, Virginia and Florida, plus the future impact of US$50 billion approved by the U.S. Congress for reconstruction of hurricane-hit areas in Florida and Texas, will help boost future income, according to the company.

In Colombia, cement deliveries rose 1.6% year-on-year, but concrete deliveries fell 8.3%. Gross income fell to COP$565 billion (US$188 million) and adjusted EBITDA declined to COP$113 billion (US$37 million), according to Argos. The declines came mainly due to falling prices for cement in Colombia, according to Argos.

Cement deliveries in Colombia for infrastructure projects reflect “steady growth” as Argos is involved in 70% of the “fourth generation” (4G) domestic highway projects, according to the company.

As for operations in Central America and the Caribbean región, cement deliveries rose 5.9% year-on-year, while concrete deliveries rose 1.7%, despite hurricanes that blasted Puerto Rico, Saint Martin, Saint Thomas and Dominica. Gross income for the Caribbean region hit US$145 million while adjusted EBITDA came-in at US$44 million.

Housing and infrastructure projects in Honduras and new building projects around the Canal Zone in Panama are expected to boost future income, the company added.