Argos has reported a first quarter of 2022 with solid fundamentals and strong demand in its three regions. On a consolidated basis, ready-mix volume grew 6.3% after reaching 1.9 million cubic metres and while cement volumes remained stable at 3.9 million metric tons.
During the period, the company generated record revenues of COP2.6 trillion, up 11.2%, and EBITDA of COP359 billion, 17.8% lower than in the first quarter of 2021, mainly due to an environment of higher inflationary pressures that impacted costs associated with raw materials, energy, freight, and operational maintenance. Nevertheless, the company highlights the very good price performance in all regions, which is expected to mitigate the impact of inflation on costs going forward.
The sale of the last cluster of non-strategic Ready-Mix operations in the United States, which included 23 plants located in suburban and rural markets in North Carolina and Florida, generated a gain on sale of US$21.9 million. Argos also announced its participation as a supplier in the construction of the Bogota Metro ‘Patio Taller’, which will require close to 100 000 m3 of concrete, and the inauguration of its port in Cartagena, which will triple its current export capacity. During the quarter, the company received the highest distinction, Gold Class, in the S&P Global Sustainability Yearbook.
"Demand for our products and solutions remains very healthy and dynamic in all regions. We are operating at full capacity despite a challenging environment due to global supply chain disruptions and inflation in energetics and raw material costs. In this environment, we are focused on maximising production at our integrated cement plants to meet our customers' growing needs and on executing a pricing strategy that mitigates the impact of inflation”, said Juan Esteban Calle, CEO of Cementos Argos.
The company expects to invest US$200 million in CAPEX by 2022.
The market showed strength during the first quarter, which allowed the company a large improvement in volumes. Cement shipments grew 7.3% and ready-mix shipments grew 2.6%. During the period, Argos USA increased its revenues by 3.1% to US$360 million and generated an EBITDA of US$40 million.
In this region, the residential segment continues on a positive trend, while the commercial segment shows strong signs of recovery. The company plans to invest more than US$90 million in CAPEX in this country, corresponding to 46% of total capex for 2022.
The regional showed firm demand conditions in the first three months of the year, driven by the retail segment, residential construction and infrastructure projects. Ready-mix volumes grew 13.4% and cement volumes remained stable. During March, Argos achieved its highest monthly cement dispatches in five years. In addition, exports from Cartagena rose 32% compared to 2021.
In Colombia, we reported revenues of COP632 billion, up 4.8%, and EBITDA of COP130 billion.
The residential segment continues to show positive signs. During the period, sales of social and non-social housing grew 6.4% and 5.5%, respectively, and housing starts grew 11% compared to the first quarter of 2021. In infrastructure, Argos remains optimistic due to positive progress in the 4G Projects, the Bogotá Metro and Puerto Antioquia.
Caribbean and Central America:
Ready-mix volumes grew 11.3%, while cement volumes decreased 11%, mainly due to operational difficulties in Haiti and the Dominican Republic and the government transition in Honduras. Revenues increased 3.4%, with an EBITDA of US$29 million.
In the region, the industrial segment is expected to perform better in the medium term, due to the progress in some infrastructure projects in Panama and the 22% annual increase in remittances in Honduras, as well as solid demand conditions in the Dominican Republic.
Read the article online at: https://www.worldcement.com/the-americas/10052022/argos-shares-q1-financial-results/
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