- Argos achieved an operating EBITDA of 127 million dollars, 41.3% higher than in 2022, which resulted in a margin expansion of 368 basis points.
- The company reported a net profit of 25 million dollars during the quarter, eight times higher than the previous year. On April 17, the company reported that the ordinary share meets the criteria stipulated by the Central Counterparty Risk Chamber of Colombia and the BVC (Colombia Stock Exchange) to be eligible for repo operations again.
- Exports from the Cartagena Argos Plant to the United States grew by 81%.
- In its recent Shareholders’ General Assembly, the cement company appointed Carolina Soto Losada as the new member of its Board of Directors, replacing Esteban Piedrahíta.
The results of the first quarter of the year for Argos continue to show the benefits of its geographical diversification and presence in the United States. The company recorded an operating EBITDA of 127 million dollars, 41.3% higher than in 2022. Regarding consolidated revenues, it earned 721 million dollars, representing a growth of 11.9% compared to the previous year. These results account for the successful execution of the pricing strategy, efficient cost management and stable dynamics in the markets where the company operates.
In a consolidated manner, the cement company dispatched 3.9 million tons of cement, 0.6% less than in the first quarter of 2022, a loss largely caused by the slight falls that occurred in the Colombian market. Concrete volumes stood at 1.7 million cubic meters, with a slight decrease of 2.3%; this was mainly due to unfavorable weather conditions in the United States.
Taking into consideration the non-recurring divestments made in 2021 and 2022, the expenses associated with the process of listing its operations in the United States in the New York Stock Exchange and the non-monetary fiscal provisions related to the payment of intercompany accounts of Argos USA to Argos Cements, the net profit closed at
25 million dollars.
On the other hand, the leverage index stood at a level of 3.1 times, with a slight increase compared to December, mainly caused by the accelerated revaluation of the Colombian peso at the end of March.
“In the first quarter of the year we experienced a stable market dynamic in most of the territories in which we are presence, sequential improvements in costs, especially in fuels, energy and, in some cases, raw materials, and mixed macroeconomic signals that keep us optimistic about medium-term trends. Beyond the constant challenging conditions, we continue to take forceful steps toward our goal of creating value for the company, our investors, customers and other stakeholders. The effort, vocation and commitment of the nearly 7,000 Argos employees, and the solid fundamentals we have will continue to be key to capture growth opportunities and building the Argos of the future we dream of.”
Juan Esteban Calle, Argos President.
During the year, the organization reported significant progress in the five pillars of its SPRINT program, acronym of Share Price Recovery Initiative, which seeks to promote initiatives for value creation:
- Focus on sound operating and financial results: In the first quarter of the year Argos achieved an EBITDA 41.3% higher than in 2022, representing a margin expansion of 368 basis points, and achieved consolidated net profit eight times higher than the previous year.
- Increase in dividend distributions to shareholders and share buybacks: The company paid 25 million dollars in dividends in April. It is also moving forward, in a committed manner, in the implementation of alternatives to achieve the distribution of additional dividends and the implementation of the repurchase program before its next Shareholders’ General Assembly in 2024.
- Improvement of the visibility of the value of operations and continuity of the process for listing the United States business on the New York Stock Exchange: The cement company will carry out the listing in the United States when market conditions are appropriate.
- Improvement of the liquidity of ordinary shares so that they are again eligible for repo operations within the Colombian Stock Exchange (BVC): Argos announced on April 17 that the ordinary share meets the criteria stipulated by the Central Counterparty Risk Chamber of Colombia and the BVC to be eligible for repo operations again.
As for the organizational structure, at the recent Shareholders’ General Assembly the company appointed Carolina Soto Losada as the new member of its Board of Directors, replacing Esteban Piedrahíta. Among other positions, Carolina was a senior advisor for the Private Sector and Competitiveness of the Presidency of Colombia and co-director of the Bank of the Republic. She is currently a senior associate of Dattis Comunicaciones.
United States of America
During the year, cement volumes increased by 7.1% and reached 1.5 million tons, leveraged by the import of the product incentivized by the organization’s extensive logistics network of ports and terminals. Concrete dispatches decreased by 2.5 % and were located at 1.1 million cubic meters, which were largely affected by harmful climatic conditions in the region, specifically in Georgia.
The United States reported revenues of 416 million dollars, which represents an increase of 22 % over the same period last year; and EBITDA was 65 million dollars, 77 % more than the first quarter of 2022, which led to the expansion of the margin by 483 basis points compared to that year.
Cement volumes stood at 1.4 million tons, with a decrease of 4.6 %, mainly impacted by the fall of the local market and the closure of the main road between Popayán and Pasto, which altered the logistics efficiency of supply in the south-west of the country, where the company has a relevant presence. Concrete, on the other hand, closed by 621.000 cubic meters, with a reduction of 4.3 %.
Of the total dispatches, 345 million tons were sold abroad, an increase of 16%. Exports to the United States grew by 81%, which strengthens the organization’s presence in the North American market.
In a challenging environment, revenues reached 150 million dollars, 7.4% lower than in the same quarter of 2022. In addition, EBITDA stood at 38 million dollars, 15% higher than last year.
Caribbean and Central America
Cement dispatches were 1 million tons, with a reduction of 5.2% compared to the first three months of the previous year, this slight impact is the result of Argos’ strategy of replacing trading volumes with exports from its Cartagena plant, in Colombia, to supply its markets in the region. Those of concrete stood at 71.000 cubic meters, 22% higher.
The company reported revenues of 145 million dollars, an increase of 5%, and an EBITDA of 30 million dollars, which grew 2%.
These results were largely leveraged by the successful recovery of cement volumes in Panama and the Dominican Republic, which increased by 21% and 14% respectively, and the commitment to new products that diversify Argos’ value proposition in Panama.
Note: The financial and operational figures expressed here are based on adjusted numbers, excluding non-recurrent and non-essential operations.