Cementos Argos Full-Year 2023 Net Income Jumps 83% Year-on-Year

Medellin-based multinational cement/concrete giant Cementos Argos announced February 20 that its full-year 2023 net income soared 83% year-on-year, to COP$393 billion (US$99.8 million), from COP$215 billion (US$54.6 million) in 2022.

Revenues rose 8.8%, to COP$12.7 trillion (US$3.2 billion), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 24%, to COP$2.6 trillion (US$660 million).

As for fourth quarter (4Q) 2023, adjusted EBITDA rose 12% year-on-year, to COP$676 billion (US$171.7 million), “driven by strong pricing dynamics especially in the U.S., combined with cost efficiencies in both Colombia and the U.S.,” according to the company.

Cement volume sales in 4Q 2023 dipped 2.3% year-on-year, “caused by slightly weaker local market demand in Colombia, country-wide protests in Panama and the social and political context in Haiti,” the company added.

Ready-mix concrete sales volumes likewise dipped 12% year-on-year, to 1.5 million cubic meters, “partly due to some continued softening in demand in Florida and Texas and also in Colombia,” according to Cementos Argos.

In its U.S. operations, 2023 prices rose 13.1% for cement and 16.6% in ready mix concrete, which resulted in a 46% hike in EBITDA

As for Colombia operations, “solid results evidenced during the latest quarter and the year were a result of the successful deployment of a comprehensive strategy throughout the value chain, which included operational efficiency, an assertive price strategy, cost discipline, and efforts to reduce distribution costs,” according to the company.

Prices in the Colombian cement business rose 14% year over year while prices in the ready-mix business rose 21%.

“In terms of cement volumes, exports from Cartagena increased 12.4%, reaching 1,358 million tons year to date and representing a historic high for the division. The local market cement volumes, on the other hand, decreased 7.2% during the year when compared to the same period of last year,” according to Cementos Argos.

In Colombia, ready-mix volumes decreased 10% year-on year. “The contraction on volumes is mostly due to the country-wide reduction of cement dispatches for the year,” the company added.

“Despite this [Colombia sales] volume decline, total EBITDA reached COP$207 billion [US$52.5 million] for the fourth quarter of 2023 and increased 14.1% when compared to the same quarter of last year.

“Pricing dynamics continued to lead to a strong top line, which in addition to the operational efficiencies, cost discipline and efforts to reduce distribution costs, were all fundamental to achieve an EBITDA margin of 28%, 179 basis points above last year,” the company explained.