Loma Negra Compañía Industrial Argentina Sociedad Anónima American Depositary Shares (ADSs), each representing five ordinary shares 2026 Q2 Earnings Call

Good day, welcome to Loma Negra's earnings conference call. By now, everyone should have access to our earnings press release and the presentation for today's call, both of which were distributed yesterday after market close. Joining me on the call today are Sergio Faifman, our CEO and Vice Chairman of the Board of Directors, and Marcos Gradin, our CFO. Sergio and Marcos will be available for the Q&A session. Before we proceed, I would like to make the following safe harbor statements. Today's call will contain forward-looking statements. I refer you to the forward-looking statements section of our earnings release and recent filing with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. This conference call will also include discussion on non-GAAP financial measures.

The full reconciliation to the corresponding financial measures is included in the earnings press release. I would like to turn the call over to Sergio.

Thank you, Diego. Hello, everyone, thank you for joining us today. I would like to start my presentation by discussing the highlights of the quarter. Marcos will take you through our market review and financial results. Following that, I will share some final remarks before opening the call to your questions. Starting with slide two. As we move through the second quarter, industry volume have not yet fully regained the momentum we were expecting. Performance during the quarter was mainly affected by weak April, impacted by heavy rains. May and June trends were more in line with the level registered a year ago. Cement volume decreased 1.4% year-over-year, while consolidated net revenue increased 2.1%, reaching ARS 238.1 billion.

In terms of quarterly performance, margin in pesos showed some compression, mainly reflecting higher costs and depreciation, while our top line continued to show positive trends even as volumes remained lagging. Consolidated adjusted EBITDA reached ARS 48.2 billion, down 2.5% year-over-year, with margin contracting 97 basis points to 20.2%. In dollar terms, however, EBITDA generation per ton stood at $32.1, up 14% year-over-year, underscoring the resilience of our operation even as demand recovery remains gradual. During the quarter, we cancelled our Class 4 corporate bonds for a total of $10 million, and we have no remaining structured debt maturity for the rest of the year. As of quarter end, net debt stood at $185 million, representing a net debt to LTM adjusted EBITDA ratio of 1.3 times.

I will now hand off the call to Marcos, who will lead you through our market review and financial results. Please, Marcos, go ahead. Thank you, Sergio.

Good day, everyone. Please turn to slide four. The most recent economic data shows a more moderate growth trajectory in the second quarter. The EMAE, Argentina's monthly economic activity indicator, grew 1.6% year-over-year in April, before slowing to 0.2% in May, with a monthly decline of 0.5% versus April. On a cumulative basis, the indicator is up 1.7% through the first five months of the year, although the pace of growth has clearly moderated compared to earlier in the year. Construction activity has shown a similar mixed trend. The ISAC declined 2.8% year-over-year in April, weighed down by the same heavy rains that affected our cement volumes before rebounding 4.1% year-over-year in May. Leading indicators remain constructive. Registered private sector employment in construction grew 1.2% year-over-year in April, and building permits authorized in the same month expanded by 17% year-over-year with a 7.6% decrease on a cumulative basis on the first four months of the year.

Within this context, industry cement dispatches declined 5% year-over-year during the quarter, mainly reflecting the impact of heavy rains in April across the country's main urban centers.

Our own volumes follow a similar trend, of a more moderate decline, down 1.4% year-over-year, outperforming the industry as May and June trends normalize closer to last year levels. In terms of product mix, bulk cement continued to outperform, supported by larger scale projects, while bag segment, which represents the majority of the industry mix, remained relatively weak, consistent with more cautious behavior in the retail and small contractor segment. Looking ahead, we expect a continued and even recovery path we have been describing, rather than a change in the underlying demand trend. That said, we remain cautiously optimistic going forward as we believe this recovery path remains intact. Turning to slide five for a review of our top-line performance by segment.

Second quarter revenues increased by 2.1% year-over-year, with growth led by the cement business, followed by the railroad segment, partially offset by lower revenues in the concrete and aggregate segments. In the cement, masonry cement, and lime segments, revenues increased by 2.2% year-over-year, while volumes decreased by 1.4%. Bulk cement dispatches continued to outperform, supported by higher activities from concrete producers, industrial clients, and construction companies. While bag cements remain under pressure, with the retail segment showing the weakest performance as demand for self-construction and refurbishing projects remain delayed. Pricing dynamics remain positive, supporting the segment top-line performance. Concrete revenues decreased by 11.2% year-over-year, as an 18.6% decline in volumes was only partially offset by favorable pricing dynamics.

Volumes were mainly affected by lower demand from special projects, particularly those linked to port infrastructure and wind farms, which are now in their final stages of completion. The start of new projects have been gradually pushed back, though we expect them to break ground in the near terms. Volumes in Rosario remain more stable, supported by a combination of public and private works. Aggregates revenues decreased by 10.3% year-over-year as a 12.2% decline in volumes was only partially offset by favorable pricing dynamics. Volumes were mainly affected by the same dynamics impacted in concrete segment, particularly weaker demand for public works and construction companies. Railroad revenues increased by 8.6% year-over-year as higher transported volumes, up 10.1%, were partially offset by softer pricing conditions. Volume growth was mainly driven by higher transportation of grain, cements, and frac sand.

The latter reflecting the resumption of operations in Neuquén following the repair of the rail section in Bahía Blanca that had been affected by last year's storm. Moving on to slide seven. Consolidated gross profit decreased by 3.9% year-over-year, with gross margin contracting 122 basis points to 19.2%, mainly reflecting higher costs and depreciations. Cost of sales increased by 3.7% year-over-year, reflecting higher costs in the cement and railroad segments, partially offset by lower costs in the concrete and aggregate businesses. In the cement segment, cost of sales increased on a pro forma basis, mainly driven by higher depreciation following the capitalization of the 25-kilogram bagging project after June of last year, along with higher packaging costs associated with its implementation. Maintenance and freight costs also rose, the latter reflecting the pass-through of higher fuel prices, while thermal and electric energy costs remained broadly in line.

As planned, most kilns were shut down in May to avoid operating during the winter months, helping to limit our exposure to higher energy costs. In railroad, the increase in cost of sales was mainly related to higher transported volumes together with higher salaries, fuel prices, and depreciation. The concrete and aggregate segments both contributed positively to the consolidated result, posting gross margin expansion, although they remained in negative territory. Finally, SG&A expenses increased by 15.7% year-over-year, mainly driven by higher salary expenses. As a percentage of sales, SG&A stood at 12.1%, up 132 basis points compared to the second quarter of 2025. Please turn to slide eight. Consolidated adjusted EBITDA for the quarter stood at $38 million, while in ARS it reached ARS 48.2 billion, reflecting a 2.5% year-over-year decline.

This decrease was mainly driven by a weaker result in the railroad segment, together with, to a lesser extent, a contraction in cement, partially offset by improved results in concrete and aggregates. As a result, the consolidated EBITDA margin contracted to 20.2%, representing a 97 basis point decrease year-over-year. In the cement segment, adjusted EBITDA margins stood at 23.9%, down 81 basis points year-over-year, a smaller decline in the consolidated construction. As higher cost of sales and SG&A, as discussed in the previous slide, were partially cushioned by favorable pricing dynamics. The concrete segment's adjusted EBITDA margin expanded by 867 basis points to -4.3% from -13% in the second quarter of 2025, supported by favorable pricing dynamics and lower costs, although it remained in negative territory.