Cementos Argos, a subsidiary of Grupo Argos, closed the first half of 2017 with positive results and a good macroeconomic outlook in its most relevant markets. Cement shipment volumes reached 8 million tons, growing 15 percent and ready mix shipments were 5.4 million cubic meters, a decrease of 7 percent.
The company reached $1.5 million in revenues and $219 million in EBITDA, 4 percent and 26 percent lower than the first half of 2016, respectively. However, contrary to the results obtained from January to March, the second quarter showed a recovery in net income reaching $18 million between April and June and $700,000 year to date. This represents better prospects for the company in the Colombian market and the progressive achievement of its goals in operating efficiencies, as well as a greater contribution from business in the United States.
At the end of the first half of the year, the company’s horizons are favorable thanks to its internationalization strategy, which is in line with the objective of diversifying its own risk of competing in a cyclical industry.
“The positive results obtained in the U.S., Caribbean and Central America, partially offset the challenges we are facing in the Colombian market,” said Juan Esteban Calle, Cementos Argos CEO. “As of June 30, 73 percent of revenues and 77 percent of EBITDA were generated abroad in dollars or in currencies largely related to the dollar. Additionally, we expect a better second half of the year in the local market as a result of growth in shipments to the 4G projects in Colombia and the recovery in consumption that should appear as a result of the reduction in interest rates.”
The United States totaled 52 percent of the company’s revenue in the first half-year and 40 percent of its EBITDA, as well as 36 percent and 67 percent of the volumes of shipped cement and concrete, respectively. As of June 30, Argos USA generated $759 million in revenue and $99 million in EBITDA, in line with expectations announced by the company earlier this year.
In Colombia, the recovery in cement dispatches, which grew 8.6 percent, was well above market levels that fell 2.7 percent. At the end of the first half-year, this region represented 28 percent of the company’s revenue generation with $398 million and 23 percent of EBITDA with $56 million. Likewise, the 2.7 million tons of cement and the 1.5 million cubic meters of ready mix shipments represent 33 percent and 29 percent, respectively, of the company’s total cement and concrete shipments in the first half of the year.
In the Caribbean and Central America region, the growth of cement and concrete supply levels stand out at levels of 7.6 percent and 7.5 percent, respectively, compared to the first half of 2016. With $291 million generated in revenues and US $92 million in EBITDA, this region contributes 20 percent and 37 percent, respectively, to the company.
Honduras and Panama continue to be the main drivers of this region. The company’s participation is highlighted in key projects for the development of the region such as the European space station in French Guiana, a third bridge over the Panama Canal, the wastewater treatment plant in the Dominican Republic, the civic government center in Honduras, the Royalton Hotel in St. Lucia, and the Nobo Hospital in Curacao, among many others.
Cementos Argos attained additional milestones during the first half-year, such as the opening of a new mill in San Lorenzo, Honduras; the purchase of an integrated cement plant in Puerto Rico; the launch of new products such as enhanced concrete and soil cement; and the integration of a new cement plant in West Virginia, as well as eight related terminals across the Northeast United States.
Likewise, significant progress was made in the Cementos Argos Building Efficiency and Sustainability for Tomorrow (BEST) program, highlighting an increase in the use of alternative fuels, the sale of non-operating assets and the incorporation of technology, which contribute to the company’s purpose to continue their support in the development of the countries and territories in which it has a presence and to become the most efficient producer in these markets.