Cementos Argos Full-Year 2020 Net Income Drops 28% Year-on-Year
Medellin-based multinational cement/concrete giant Cementos Argos on February 24 reported a 28% year-on-year decline in 2020 net income, to COP$141 billion (US$39.6 million), resulting from economic slowdowns during the Covid-19 crisis.
Earnings before interest, taxes, depreciation and amortization (EBITDA) also fell, to COP$1.6 trillion (US$449 million), from COP$1.7 trillion (US$477 million) in 2019.
However, adjusted EBITDA – once excluding the impact of the sale of pre-mixed concrete operations in the U.S. and payment of U.S. antitrust fines – actually improved by 4.5% year-on-year, according to the company.
Cost-reduction and efficiency moves totaled US$115 million during the year, enabling Argos to cut debt and maintain a “solid cash position” during the Covid-19 downturn, according to the company.
Corporate-wide, fourth-quarter (4Q) cement demand was aided by a “significant contribution from the Caribbean and Central America region, where growth was 13.5%,” according to the company.
However, in Colombia, Cementos Argos saw net profits decline 15% year-on-year, to COP$78 billion (US$22 million), while shipment volumes of cement fell 18% and concrete fell 25.7% here, according to the company.
“Although the industry as a whole was hit in its 2020 results, Colombia presented a favorable dynamic in the residential segment, reflecting the implementation of a successful national government program that seeks to deliver a total of 200,000 subsidies to acquire housing between 2020 and 2022,” the company noted.
Corporate-wide, cement shipments (excluding plant divestments in the United States) fell 15.8% during 4Q 2020 and 16.3% for the full year, “reflecting slower dynamics in the commercial segment in the United States and in formal construction in Colombia, in addition to impacts from hurricanes and heavy rains in the United States and closures between 10 and 12 weeks in Colombia and most markets in Central America and the Caribbean due to the pandemic,” according to the company.
“This impact was offset by improvements in prices in Colombia and the USA, efficiencies in costs and expenses in all operations and the devaluation of the Colombian peso,” the company added.