- Ready-mix volumes benefited from solid sales dynamics in all three regions.
- During the year, Cementos Argos achieved important milestones such as the sale of 23 Ready-Mix plants in the United States, located in non-strategic areas; participation in the initial works of the Bogota Metro and the beginning of operations on its new port in Cartagena.
- In terms of sustainability, the company received the highest distinction, Gold Class, in the S&P Global Sustainability Yearbook.
Argos, a Grupo Argos company, reports 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 meters 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 maximizing production at our integrated cement plants to meet our customers’ growing needs and on executing a pricing strategy that mitigates the impact of inflation”.
Juan Esteban Calle, CEO of Cementos Argos.
- United States:
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.
* Cement volumes exclude since 3Q21 the product purchased from third parties used to supply the ready-mix operations in Texas. For comparability purposes, 1Q21 adjusted figure excludes 133,000 metric tons of cement purchased from third parties.
* Adjusted EBITDA excludes: i) For 1Q22 an income of COP 85.7 billion from the gain on sale of the concrete divestment, equivalent to USD 21.9 million, ii)
* For 1Q21, COP 8.0 million generated by the Dallas operation, equivalent to USD 2.3 million.
* Adjusted EBITDA for CCA excludes for 1Q21 US$3.8 million generated by exports.
* As of 2022, the export division previously reported in the CCA region will be reported in Colombia.