Loma Negra Swings to Q3 Profit as Financial Losses Recede

Argentine cement producer Loma Negra announced its third-quarter results on November 5, 2026, reporting a net profit of 14.5 billion Argentine pesos, compared with a loss of 11.5 billion pesos a year earlier. The return to profit came even as net revenue for the three months ended September 30 fell 3.2% to 270.1 billion pesos.

The swing was driven principally by financial items rather than stronger operations. Loma Negra recorded a net financial gain of 8.5 billion pesos, against a loss of 38.3 billion pesos in the year-earlier quarter. Foreign-exchange losses on U.S.-dollar-denominated liabilities narrowed to 7.4 billion pesos from 39.8 billion pesos as the peso depreciated more moderately. Net interest expense fell 66.2% to 7.9 billion pesos, reflecting lower interest expense and less financial debt. Higher income-tax expense partly offset those improvements.

Adjusted EBITDA, the company’s operating-performance measure that adjusts net profit for financing, tax, depreciation and other specified items, declined 6.7% to 54.2 billion pesos. Its margin narrowed to 20.1% from 20.8%, showing that the bottom-line recovery did not come from an expansion in operating earnings.

Rain Disrupted an Already Soft Quarter

Cement, masonry cement and lime volumes fell 6.3% to 1.28 million tons after heavy rainfall weakened July and August dispatches. September volumes exceeded their year-earlier level as weather improved. Bulk cement demand from concrete producers, industrial customers and construction companies remained resilient, while bagged cement stayed under pressure from weaker retail self-construction and refurbishment.

Chief Executive Officer Sergio Faifman called September’s improvement “an encouraging sign for the months ahead” and said management remained positive about the rest of the year while focusing on preserving efficiency gains.

Pricing limited the cement segment’s revenue decline to 1.8%, but performance elsewhere was mixed. Concrete revenue dropped 23.2% as volumes fell 24.9% amid fewer special projects, weaker public works and reduced industrial and architectural activity. Aggregates revenue rose 3.7% despite a 16.1% volume decline as pricing and sales mix improved. Railroad revenue fell 2.2%, with volumes down 7.0%.

Cement Margins Improved While Railroad Weakened

The cement, masonry cement and lime segment expanded its Adjusted EBITDA margin by 67 basis points to 24.9%. Unit costs rose 2.6%, less than average revenue per ton. Using clinker produced in warmer months and planned shutdowns of most kilns limited exposure to winter energy costs, while fuel, electricity, packaging and contractor costs declined.

Concrete’s margin improved by 220 basis points but remained at negative 4.6%, with volumes still insufficient to absorb its cost structure efficiently. Railroad moved from a positive 3.4% margin to negative 11.0%, mainly because of higher track-maintenance, third-party-service and payroll costs. Aggregates weakened to negative 19.4% from negative 16.7%.

Consolidated overhead added further pressure. Selling and administrative expenses rose 16.1% to 29.9 billion pesos on advertising, promotion, consulting and IT spending, reaching 11.1% of net revenue.

Cash Generation Supported Debt Reduction

Operating cash flow increased to 86.3 billion pesos from 42.6 billion pesos, mainly reflecting working-capital movements in receivables, inventories and tax payables. Capital expenditure was 18.1 billion pesos, down from 19.5 billion pesos, while financing activities used 25.0 billion pesos, principally for loan repayments.

Net debt, calculated as borrowings less cash, cash equivalents and short-term investments, ended the quarter at 220.5 billion pesos. The ratio of net debt to Adjusted EBITDA for the last 12 months was 1.00x, compared with 1.47x at fiscal year-end 2025 and 1.30x in the second quarter. At quarter-end, 69% of total debt was short-term and average maturity was 1.2 years.

On October 22, 2026, after the quarter ended, Loma Negra issued US$150 million of Class 7 Notes at par. The notes carry a 6.25% annual interest rate, semiannual payments and a bullet repayment at 36 months. Proceeds are designated to refinance short-term liabilities and extend average debt maturity.

The next test is whether September’s stronger dispatches develop into a sustained demand recovery and whether Railroad, Concrete and Aggregates can repair their margins. That would allow operating performance to reinforce the cash generation and deleveraging already achieved, rather than leaving the profit recovery dependent primarily on smaller currency and interest losses.