Cementos Argos announces results
Published by Rebecca Bowden,
Cementos Argos has announced its financial figures for the first nine months of the year.
The company has reported revenues on a consolidated basis of *COP6.5 trillion, 13 percent higher than those recorded at the end of the third quarter of 2015. In addition, the company generated EBITDA of COP1.3 trillion, an increase of 14 percent, and achieved a net profit of COP393 billion, 19 percent higher than the comparable 2015 period.
Meanwhile, during the first nine months of the year, the organisation shipped 10.5 million tons of cement and 8.6 million m3 of concrete, representing a decrease of 1 percent for both variables, when compared with the dispatches made in the same period last year.
"Cementos Argos is a company that has based its growth strategy through geographic diversification and continuous development of value propositions that meet the needs of our customers. This, coupled with the results that our Building Efficiency and Sustainability for Tomorrow, or BEST, program, has allowed us to continue generating satisfactory results for our shareholders and other stakeholders. The United States, Honduras, and Panama, continue to drive company´s results and offer great opportunities for growth, offsetting the slowdown in demand we faced of the Colombian market as a result of the delay in the start of the construction of the 4G projects during the second half,” stated Juan Esteban Calle, president of Cementos Argos.
The United States continues to be the region with the best performance. Despite the bad weather recorded during the quarter, the U.S. obtained revenues of over USD1 billion and cumulative EBITDA of USD137 million, figures of 12 percent and 59 percent respectively, higher than those obtained at the end of the third quarter for 2015. Meanwhile, consolidated shipments increased 20 percent for cement and 4 percent for concrete.
The acquisition of a state-of-art cement plant in Martinsburg, West Virginia, is noteworthy. Recently, Cementos Argos received approval for the transaction by the United States Federal Trade Commission and completion of the acquisition is expected for the end of November. Upon its completion, the organisation will focus on harnessing synergies close to USD10 million per year as a result of this acquisition.
Growth in cement use in states where Argos is present reaches double-digit figures, while the national rate grows to 3.4 percent, is also significant for the industry.
In the Caribbean and Central America Region, accrued through September, Cementos Argos increased its revenue by 1 percent and EBITDA by 5 percent, reaching USD422 million and 146 million, respectively. Shipped cement volumes increased by 5 percent, while concrete decreased 1.8 percent.
In the region, we highlight the opening of a grinding station in southern Honduras, which will help serve growth in this important market. Likewise, in Panama, the company notes that, subtracting the impact of shipments for the Panama Canal, growth is 6 percent. Additionally, during the quarter, the sale of 20 percent of shares of the Panamanian company with a local partner was completed.
Meanwhile, in Colombia, the organisation recorded a decrease in volumes shipped in cement and concrete of 18 percent and 12 percent, related to the cement market downturn as reported by DANE and is approaching 4 percent. In turn, Argos generated almost COP2 trillion in revenue and COP543 billion in EBITDA, with decreases of 8 percent and 13 percent, respectively.
In this region we highlight the company's decision to postpone the investment planned for the Sogamoso Plant, this measure forms a part of the BEST program, which seeks to make Cementos Argos the most efficient cement and concrete producer in all regions where it operates. However, in order to continue serving customers in a timely manner, Argos initiated a process to increase its existing capacity by one million additional tons per year by investing in innovative technologies at a lower cost per t.
In addition, Argos announced it has been selected as a supplier in 25 of the 44 functional units of the first wave of 4G projects and believes that the increase in demand for product will launch in the first half of 2017.
“In Colombia, 2016 has seen a period of transition in the construction of infrastructure projects. The fundamental demand for cement and concrete in the country are strong. We expect a healthy market growth as of 2017, with the start of construction of 4G projects, and we will continue to work on the implementation of the BEST efficiency plan, which will launch in Colombia and which we expect to reach operational savings of nearly USD35 million per year,” concluded Juan Esteban Calle, president of Cementos Argos.
Read the article online at: https://www.worldcement.com/the-americas/24112016/cementos-argos-announces-results/
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