Cementos Argos achieves a YTD EBITDA margin of 22.2%, aligned with its annual guidance, driven by the initiatives deployed under its strategic program "From the Mine to the Market"
eport
Cementos Argos S.A. (Argos) is a geographically diverse rapidly growing cement and ready-mix concrete (RMC) company with presence in the United States building materials industry through its 31% stake in Summit Materials, plus direct operations in Colombia and other 14 countries and territories in the Caribbean & Central America (CCA), with total annual capacity of approximately 14.4 MTPA of cement.
BVC: CEMARGOS
SANTIAGOX: CEMARGOSCL
ADR LEVEL 1: CMTOY
SPRINT 2.0
With the inclusion of our common share on the MSCI emerging market and FTSE indices in August and September, as announced in our February earnings call, we can confidently say that we have fully met the commitments outlined in SPRINT 2.0.
SPRINT 2.0 status:
- Year-to-dateEBITDA margin stands at 22.2%, above the guidance for the current year
- Shareholder's approved 585 billion pesos in dividends, 30% more than last year, of which we have already distributed 380 billion pesos
- We have executed in total share repurchases for 340 billion pesos, of which 300 billion have been executed this year
- Average trading volumes form the market maker program with Credicorp, increased 50% versus last year
- The integration with Summit in the US advances satisfactorily, with expected synergies this year to be around 40 million dollars, and an over-all yearly amount of 130 million dollars over the first five years of the integration
- Inclusion of the common stock to the FTSE and MSCI indices during August and September, attracted total inflows to the stock of 613 billion pesos during these two months. To date, the three months average daily trading volume of the stock stands at 3 million dollars.
Consolidated Results
Third-quarter results were driven by the continued implementation of the profitability strategy across regions, despite weaker volume dispatches. Cement volumes declined by 8.6% during the quarter, primarily due to challenges in the Colombian market, which were not offset by higher volumes in the CCA region. Similarly, ready-mix volumes decreased by 8.1%, largely impacted by the change in business model of the concrete business in Panama and a slowdown in Colombia.
EBITDA for the quarter increased by 7.4%, reaching COP 317 billion, with a margin of 23.7%, representing an improvement of 199 basis points compared to the same period in 2023. Year-to-date,
EBITDA totaled COP 887 billion, with margins at 22.2%, aligned wi | c pany's a k guidanc . |
The year-to-date adjusted net income, that as of September stood at 409 billion pesos, decreased 19% versus the same period of 2024. This result is given in a context of a transitional year for the company, where the synergies in Summit Materials have not been completely materialized, and the reduction in interest expenses produced by the deleveraging in Cementos Argos has not been fully captured.
Key Figures - Adjusted | QUARTER | YTD | ||||||
2023.Q3 | 2024.Q3 | Var | 2023.Q3 | 2024.Q3 | Var | |||
Revenue | COP Bn | 1,358 | 1,336 | -1.6% | 4,195 | 3,991 | -4.9% | |
EBITDA | COP Bn | 295 | 317 | 7.4% | 833 | 887 | 6.4% | |
EBITDA Margin | % | 21.7% | 23.7% | 199 pbs | 19.9% | 22.2% | 235 pbs | |
Net Income | COP Bn | 250 | 157 | -37.4% | 504 | 409 | -19.0% | |
Net Margin | % | 18.4% | 11.7% | -669 pbs | 12.0% | 10.2% | -178 pbs | |
Volumes - Adjusted | QUARTER | YTD | ||||||
2023.Q3 | 2024.Q3 | Var | 2023.Q3 | 2024.Q3 | Var | |||
Cement | 000 TM | 2,456 | 2,246 | -8.6% | 7,319 | 6,969 | -4.8% | |
RMC | 000 M | 3 | 711 | 654 | -8.1% | 2,084 | 1,988 | -4.6% |
For a detailed reconciliation of the adjustments please refer to the reconciliation tables
Results Per Region
Colombia
During the quarter, the continuation of strong results was supported by the successful deployment of the strategic program - from the mine to the market - and the strength of the Argos brand. This strategy enabled the company to maintain stable prices throughout the year, despite lower local volumes. Total cement dispatches declined by 12% during the quarter, and ready-mix concrete volumes decreased by 2.6% compared to the same period of last year. It is important to note that a five-day truckers' protest in September, which caused nationwide road blockades, affected dispatches. We estimate that these disruptions reduced cement deliveries by approximately 15,000 tons.
The financial results for the quarter reflect the successful execution of the program from the mine to the market, generating COP 23.6 billion in savings across three key areas of profitability:
1. Operational Equipment Effectiveness (OEE): Reliability at our cement plants has improved by 10% over the past two years.
- Cost Control: Production costs per ton have remained stable for three consecutive years, effectively absorbing inflationary pressures and optimizing fixed costs in response to lower volumes.
- Market Leadership: Our value-driven market proposition has further solidified our leadership position.
As a result, EBITDA grew by 1.7% during the quarter, marking the highest level in nine years, and increased 7.4% for the first nine months compared to 2023. Margins expanded by 276 basis points in the quarter and 286 basis points year-to-date, reaching 28.5% and 25.9%, respectively.
Key Figures - Adjusted | QUARTER | YTD | |||||
2023.Q3 | 2024.Q3 | Var | 2023.Q3 | 2024.Q3 | Var | ||
Revenue | COP Bn | 810 | 744 | -8.1% | 2,333 | 2,230 | -4.4% |
EBITDA | COP Bn | 209 | 212 | 1.7% | 537 | 577 | 7.4% |
EBITDA Margin | % | 25.8% | 28.5% | 276 pbs | 23.0% | 25.9% | 286 pbs |
Volumes - Adjusted | QUARTER | YTD | |||||
2023.Q3 | 2024.Q3 | Var | 2023.Q3 | 2024.Q3 | Var | ||
Cement | 000 MT | 1,540 | 1,354 | -12.1% | 4,354 | 4,012 | -7.8% |
Local Market | 000 TM | 1,160 | 999 | -13.9% | 3,321 | 2,955 | -11.0% |
Exports | 000 TM | 380 | 355 | -6.6% | 1,032 | 1,057 | 2.4% |
RMC | 000 M3 | 635 | 618 | -2.6% | 1,868 | 1,834 | -1.8% |
Aggregates | 000 MT | 209 | 137 | -34.5% | 827 | 441 | -46.7% |
For a detailed reconciliation of the adjustments please refer to the reconciliation tables
CCA
Our ongoing focus on profitability and the fine-tuning of business strategies across markets, aimed at achieving best-in-class performance, drove positive operational and financial results in the region. Local markets saw a 5.4% increase in volume dispatches, driven by strong performance in Honduras (+16.4%), the Dominican Republic (+13.3%), and Puerto Rico (+6.5%). Variations in the ready-mix figures are explained by the turnover of the business in Panama where we no longer operate directly these assets.
Supported by these dynamics and a stable year-over-year price environment, revenue in the local markets grew by 1.5%, while EBITDA increased by 14%. This performance translated into an EBITDA margin of 24.4% for local markets, reflecting a 258-basis-point expansion, fully aligned with our "Mine to Market" efficiencies program.
Key Figures - Adjusted | QUARTER | YTD | |||||
2023.Q3 | 2024.Q3 | Var | 2023.Q3 | 2024.Q3 | Var | ||
Revenue | USD M | 135 | 141 | 4.8% | 420 | 435 | 3.6% |
Central America | USD M | 64 | 63 | -2.2% | 200 | 197 | -1.8% |
Caribbean | USD M | 63 | 66 | 5.2% | 198 | 197 | -0.7% |
Trading* | USD M | 7 | 12 | 61.5% | 22 | 42 | 89.0% |
EBITDA | USD M | 33 | 35 | 4.5% | 96 | 106 | 10.3% |
Central America | USD M | 18 | 19 | 5.8% | 55 | 57 | 3.3% |
Caribbean | USD M | 10 | 12 | 27.7% | 28 | 38 | 33.4% |
Trading | USD M | 5 | 3 | -42.0% | 13 | 12 | -10.5% |
EBITDA Margin | % | 24.6% | 24.5% | -8 pbs | 22.9% | 24.4% | 148 pbs |
EBITDA Margin Central America | % | 28.1% | 30.4% | 229 pbs | 27.4% | 28.8% | 141 pbs |
EBITDA Margin Caribbean | % | 15.5% | 18.8% | 331 pbs | 14.3% | 19.2% | 491 pbs |
Volumes - Adjusted | QUARTER | YTD | |||||
2023.Q3 | 2024.Q3 | Var | 2023.Q3 | 2024.Q3 | Var | ||
Cement | 000 TM | 916 | 891 | -2.7% | 2,965 | 2,957 | -0.3% |
Central America | 000 TM | 397 | 418 | 5.1% | 1,258 | 1,278 | 1.5% |
Caribbean | 000 TM | 351 | 371 | 5.7% | 1,116 | 1,108 | -0.7% |
Trading | 000 TM | 168 | 103 | -38.8% | 590 | 571 | -3.4% |
RMC | 000 M3 | 77 | 36 | -53.3% | 216 | 154 | -28.5% |
Central America | 000 M3 | 57 | 11 | -80.6% | 154 | 80 | -48.1% |
Caribbean | 000 M3 | 20 | 25 | 25.3% | 61 | 74 | 20.7% |
*Does not include sales to related companies
For a detailed reconciliation of the adjustments please refer to the reconciliation tables
Indebtedness and coverage indicators:
The ratio of net debt to EBITDA stood at 2.2x within our estimates and below our guidance for the year 2024.
Cash Flow as of September 30th, 2024 (COP Billion1):
Investment Portfolio as of September 30th, 2024:
Company | % Stake | Price per Share | Value | Value |
(COP) | (COP million) | (USD million) | ||
Grupo Sura | 8.91% | 29,000 | 823,453 | 198 |
Total | 823,453 | 198 |
1* FX Rate as of September 30th, 2024: COP 4,164.21 / USD
IFRS Figures and Reconciliation to comparable results
Consolidated
Consolidated | QUARTER | YTD | ||||
2023.Q3 | 2024.Q3 | 2023.Q3 | 2024.Q3 | |||
RMC Volume | m3 | 1,702 | 654 | 5,214 | 1,988 | |
US Assets combination with Summit | m3 | -991 | -3,131 | |||
RMC Volume - Adjusted | m3 | 711 | 654 | 2,084 | 1,988 | |
Consolidated | QUARTER | YTD | ||||
2023.Q3 | 2024.Q3 | 2023.Q3 | 2024.Q3 | |||
Cement Volume | TON | 3,983 | 2,197 | 11,928 | 6,600 | |
US Assets combination with Summit | TON | -1,527 | 48 | 4,609 | 368 | |
Cement Volume - Adjusted | TON | 2,456 | 2,246 | 16,538 | 6,969 | |
Consolidated | QUARTER | YTD | ||||
2023.Q3 | 2024.Q3 | 2023.Q3 | 2024.Q3 | |||
Revenue - IFRS | COP Bn | 3,087 | 1,336 | 9,800 | 3,991 | |
US Assets combination with Summit | COP Bn | -1,729 | -5,605 | |||
Revenue - Adjusted | COP Bn | 1,358 | 1,336 | 4,195 | 3,991 | |
Consolidated | QUARTER | YTD | ||||
2023.Q3 | 2024.Q3 | 2023.Q3 | 2024.Q3 | |||
EBITDA - IFRS | COP Bn | 722 | 311 | 1,978 | 868 | |
US Assets combination with Summit | COP Bn | -427 | 7 | -1,145 | 7 | |
Provision termination Concrete contracts Panama | COP Bn | -2 | 11 | |||
EBITDA - Adjusted | COP Bn | 295 | 317 | 833 | 887 | |
EBITDA Margin - IFRS | % | 23.4% | 23.3% | 20.2% | 21.8% | |
EBITDA Margin - Adjusted | % | 21.7% | 23.7% | 19.9% | 22.2% | |
Consolidated | QUARTER | YTD | ||||
2023.Q3 | 2024.Q3 | 2023.Q3 | 2024.Q3 | |||
Net Income - IFRS | COP Bn | 229 | 137 | 448 | 5,566 | |
US Assets combination with | Gain on sale | COP Bn | -5,295 | |||
Transaction and integration costs | COP Bn | 16 | 95 | |||
Summit | ||||||
Expenses | 7 | 7 | ||||
Provision termination Concrete contracts Panama | COP Bn | -2 | 11 | |||
Non-Recurring Income Tax | COP Bn | 20 | -2 | 56 | 25 | |
Net Income - Adjusted | COP Bn | 250 | 157 | 504 | 409 | |
Net Margin - IFRS | % | 7.4% | 10.3% | 4.6% | 139.5% | |
Net Margin - Comparable | % | 18.4% | 11.7% | 12.0% | 10.2% |
Colombia
COLOMBIA | QUARTER | YTD | |||
2023.Q3 | 2024.Q3 | 2023.Q3 | 2024.Q3 | ||
Revenue - IFRS | COP Bn | 769 | 744 | 2,216 | 2,230 |
US Assets combination with Summit | COP Bn | 41 | 117 | ||
Revenue - Adjusted | COP Bn | 810 | 744 | 2,333 | 2,230 |
IFRS Results:
Below is a summary of the main consolidated figures and by region for the third quarter of 2024:
Revenue | EBITDA | ||||||||
COP Bn | 2023.Q3 | 2024.Q3 | Var | 2023.Q3 | Mgn (%) | 2024.Q3 | Mgn (%) | Var Marg | |
Colombia | 769 | 744 | -3.2% | ActualTotalCO | 209 | 27.1% | 212 | 28.5% | 138 |
CCA | 542 | 579 | 6.9% | 135 | 24.9% | 145 | 25.0% | 10 | |
Central America | 257 | 257 | -0.1% | ActualTotalCO | 73 | 28.2% | 80 | 31.3% | 306 |
Caribbean | 254 | 273 | 7.2% | ActualTotalCO | 40 | 15.6% | 51 | 18.8% | 316 |
Trading | 30 | 50 | 64.9% | ActualTotalCO | 22 | 74.4% | 13 | 26.2% | -4,824 |
Subtotal | 3,081 | 1,323 | -57.0% | 771 | 25.0% | 357 | 27.0% | 194 bps | |
Corporate | 6 | 11 | 0.0% | ActualTotalCO | -48 | N/A | -46 | N/A | N/A |
Other Businesses | 2 | 0.0% | ActualTotalCO | -1 | N/A | 0.4 | N/A | N/A | |
Consolidated Results | 3,087 | 1,336 | -56.7% | 722 | 23.4% | 311 | 23.3% | -8 bps | |
USD M | |||||||||
Colombia | 187 | 181 | -3.3% | ActualTotalUS | 50 | 26.8% | 52 | 28.6% | 181 |
CCA | 135 | 141 | 4.8% | 33 | 24.6% | 35 | 25.0% | 39 | |
Central America | 64 | 63 | -2.2% | ActualTotalUS | 18 | 28.1% | 20 | 31.4% | 335 |
Caribbean | 63 | 66 | 5.2% | ActualTotalUS | 10 | 15.5% | 12 | 18.8% | 331 |
Trading | 7 | 12 | 61.5% | ActualTotalUS | 5 | 72.6% | 3 | 26.1% | -4,657 |
Subtotal | 759 | 322 | -57.5% | 187 | 24.6% | 87 | 27.1% | 245 bps | |
Corporate | 0.0% | ActualTotalUS | -12 | N/A | -11 | N/A | N/A | ||
Other Businesses | 0.0% | ActualTotalUS | N/A | 0.13 | N/A | N/A | |||
Consolidated Results | 760 | 325 | -57.2% | 175 | 23.0% | 76 | 23.4% | 37 bps |
CEMENTOS ARGOS SA AND SUBSIDIARIES | ||||||||||||
Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income | ||||||||||||
For the nine and three months ended September 30, 2024 and 2023 | Millions of Colombian Pesos | ||||||||||||
Accumulated | Quarterly | |||||||||||
2024 | 2023 | Variation | 2024 | 2023 | Variation | |||||||
Continuing operations | ||||||||||||
Income from operations | $ | 3,991,132 | $ | 4,077,865 | -2.13 | $ | 1,335,627 | $ | 1,316,544 | 1.45 | ||
US$ dollar (millions) | 1,002 | 924 | 335 | 298 | ||||||||
Cost of sales | -2,967,710 | -3,083,522 | -3.76 | -975,489 | -968,649 | 0.71 | ||||||
Cost of sales | -2,669,521 | -2,792,322 | -4.40 | -862,610 | -875,120 | -1.43 | ||||||
Depreciation and amortization | -298,189 | -291,200 | 2.40 | -112,879 | -93,529 | 20.69 | ||||||
Gross profit | $ | 1,023,422 | $ | 994,343 | 2.92 | $ | 360,138 | $ | 347,895 | 3.52 | ||
Administrative expenses | -343,416 | -311,973 | 10.08 | -120,919 | -105,719 | 14.38 | ||||||
Selling expenses | -125,091 | -124,696 | 0.32 | -40,472 | -41,633 | -2.79 | ||||||
Depreciation and amortization | -51,042 | -61,476 | -16.97 | -17,157 | -18,155 | -5.50 | ||||||
Impairment of goodwill and assets | 0 | -193 | -100.00 | 0 | 10 | -100.00 | ||||||
Other revenues, net | 15,023 | -15,943 | -194.23 | -153 | 739 | -120.70 | ||||||
Operating profit | $ | 518,896 | $ | 480,062 | 8.09 | $ | 181,437 | $ | 183,137 | -0.93 | ||
EBITDA | 868,127 | 832,931 | 311,473 | 294,811 | ||||||||
US$ dollar (millions) | 218 | 189 | 78 | 67 | ||||||||
Adjusted EBITDA | 886,614 | 832,931 | 316,543 | 294,811 | ||||||||
US$ dollar (millions) | 223 | 189 | 80 | 67 | ||||||||
Financial expenses, net | -388,975 | -481,662 | -19.24 | -124,417 | -181,772 | -31.55 | ||||||
Foreign currency exchange (loss) gains | 4,141 | -57,457 | -107.21 | 9,189 | 184 | 4,894.02 | ||||||
Share of profit of associates and joint ventures | 188,591 | -2447 | -7,807.03 | 131,989 | 593 | 22,157.84 | ||||||
Profit before income tax | $ | 322,653 | $ | -61,504 | -624.60 | $ | 198,198 | $ | 2,142 | 9,152.94 | ||
Income tax | -52,301 | 1,519 | -3,543.12 | -20,513 | 5807 | -453.25 | ||||||
Discontinued operations, net | 5,295,485 | 507858 | 942.71 | -40,449 | 221503 | -118.26 | ||||||
Net income | $ | 5,565,837 | $ | 447,873 | 1,142.73 | $ | 137,236 | $ | 229,452 | -40.19 | ||
Income for the period attributable to: | ||||||||||||
Owners of the parent company | 5,512,456 | 387,587 | 1,322.25 | 113,530 | 208,426 | -45.53 | ||||||
Non-controlling interest | 53,381 | 60,286 | -11.45 | 23,706 | 21,026 | 12.75 | ||||||
Net income for the year | $ | 5,565,837 | $ | 447,873 | 1,142.73 | $ | 137,236 | $ | 229,452 | -40.19 | ||
US$ dollar - Owners of the parent company | 1,385 | 88 | 1,476.70 | 29 | 47 | -39.61 | ||||||
Net income adjusted | 408,565 | 504,150 | - | 18.96 | 156,518 | 249,892.23 | - | 37.37 | ||||
Additional Information: | ||||||||||||
Gross margin | 25.6% | 24.4% | 27.0% | 26.4% | ||||||||
Operating margin | 13.0% | 11.8% | 13.6% | 13.9% | ||||||||
Net margin | 138.1% | 9.5% | 8.5% | 15.8% | ||||||||
EBITDA | 868,127 | 832,931 | 311,473 | 294,811 | ||||||||
EBITDA margin | 21.8% | 20.4% | 23.3% | 22.4% | ||||||||
Adjusted EBITDA | 886,614 | 832,931 | 316,543 | 294,811 | ||||||||
Adjusted EBITDA margin | 22.2% | 20.4% | 23.7% | 22.4% |
CEMENTOS ARGOS SA AND SUBSIDIARIES | ||||
Condensed Interim Consolidated Statement of Financial Position | ||||
As of september 30 and december 31 | Millions of Colombian pesos | ||||
September | December | |||
2024 | 2023 | |||
Cash and cash equivalents | $ | 1,970,669 | $ | 1,008,527 |
Derivative financial instruments | 45,525 | 135,390 | ||
Other financial assets | 96,733 | 127 | ||
Trade debtors and other accounts receivable, net | 566,449 | 1,184,294 | ||
Tax assets | 210,644 | 199,616 | ||
Inventories | 736,916 | 1,219,898 | ||
Other non-financial assets | 154,928 | 234,567 | ||
Assets Held for Sale | 0 | 236 | ||
Total current assets | $ | 3,781,864 | $ | 3,982,655 |
Trade debtors and other accounts receivable, net | 39,784 | 41,208 | ||
Investments in associates and joint ventures | 8,588,580 | 39,238 | ||
Derivative financial instruments | 100,754 | 34,916 | ||
Other financial assets | 854,716 | 852,755 | ||
Intangible assets, net | 392,681 | 484,712 | ||
Right-of-use assets, net | 135,520 | 433,223 | ||
Biological assets | 15,192 | 16,164 | ||
Property, plant and equipment, net | 5,051,476 | 11,523,084 | ||
Investment properties | 206,490 | 240,569 | ||
Goodwill, net | 998,267 | 1,601,761 | ||
Deferred tax asset | 101,226 | 250,136 | ||
Other non-financial assets | 11,675 | 10,318 | ||
Total non-current assets | $ | 16,496,361 | $ | 15,528,084 |
TOTAL ASSETS | $ | 20,278,225 | $ | 19,510,739 |
LIABILITIES | ||||
Financial obligations | 1,228,943 | 1,819,111 | ||
Lease liabilities | 40,235 | 103,151 | ||
Trade liabilities and accounts payable | 892,613 | 1,160,101 | ||
Tax liabilities | 85,273 | 49,078 | ||
Liability for employee benefits | 173,078 | 252,106 | ||
Provisions | 25,487 | 71,504 | ||
Other financial liabilities | 80,577 | 88,266 | ||
Derivative financial instruments | 67,226 | 226,270 | ||
Outstanding bonds and preferred shares | 430,852 | 196,845 | ||
Other non-financial liabilities | 182,286 | 265,213 | ||
Total current liabilities | $ | 3,206,570 | $ | 4,231,645 |
Financial obligations | 948,203 | 2,234,376 | ||
Lease liabilities | 97,379 | 422,628 | ||
Liability for employee benefits | 222,737 | 232,015 | ||
Derivative financial instruments | 127,507 | 114,138 | ||
Provisions | 61,323 | 185,436 | ||
Outstanding bonds and preferred shares | 1,979,413 | 2,497,133 | ||
Other non-financial liabilities | 75,355 | - | ||
Deferred tax liability | 441,986 | 518,369 | ||
Total non-current liabilities | $ | 3,953,903 | $ | 6,204,095 |
TOTAL LIABILITIES | $ | 7,160,473 | $ | 10,435,740 |
HERITAGE | ||||
Issued capital | 2,290,218 | 2,242,552 | ||
Own shares repurchased | -401,682 | -157,995 | ||
Reservations | 5,758,565 | 684,841 | ||
Cumulative results | 1,295,868 | 1,431,318 | ||
Other comprehensive income | 3,392,724 | 4,154,687 | ||
Total equity attributable to controlling interests | $ | 12,335,693 | $ | 8,355,403 |
Non-controlling interests | 782,059 | 719,596 | ||
TOTAL EQUITY | $ | 13,117,752 | $ | 9,074,999 |
TOTAL LIABILITIES AND EQUITY | $ | 20,278,225 | $ | 19,510,739 |