On August 6, Loma Negra Compania Industrial Argentina Sociedad Anonima (NYSE:LOMA) reported results for the three months ended June 30, and the numbers point in two different directions at once. Net profit jumped to Ps. 7,043 million from just Ps. 514 million a year earlier, even as cement volumes actually shrank. Net sales rose only 2.1% to Ps. 238,053 million, and CEO Sergio Faifman said industry volumes still have not fully regained the momentum the company expected heading into the quarter.
A Currency Story Behind The Profit
The headline swing in net profit had less to do with operations than with currency. In the quarter ended June 30, 2025, foreign exchange losses on the company’s dollar debt totaled Ps. 22,291 million; this year that loss shrank to Ps. 5,626 million, because the peso’s decline against the dollar was milder than the year before. That single change explains most of the gap between last year’s Ps. 514 million and this year’s Ps. 7,043 million in net profit. Adjusted EBITDA measured in dollars climbed 12.5% year over year to $38 million, even though the peso figure slipped 2.5% to Ps. 48,175 million, meaning profitability per ton actually improved once currency effects are stripped out.
The balance sheet moved the same way. Net debt fell to Ps. 273,650 million, or $185 million, and the net debt to trailing EBITDA ratio improved to 1.30 times, down from 1.47 times at the end of 2025 and 1.33 times just one quarter earlier. In May, the company cancelled its remaining Class 4 corporate bond, worth $10 million, and said it now has no further debt maturities for the rest of the year, with 87% of remaining debt locked in at fixed rates. Operating cash flow flipped from a use of Ps. 29,743 million in the second quarter of 2025 to a source of Ps. 18,098 million this year, helped by lower income tax payments. Railroad volumes were a bright spot too, up 10.1% on stronger grain and frac sand traffic, aided by the return of service on a rail line that had been disrupted by a storm near Bahia Blanca back in March 2025.
Where The Actual Business Slowed
Strip out the currency effects and the underlying business had a rougher quarter. Cement, masonry and lime volumes fell 1.4% to 1.19 million tons, a decline the company blamed on a rain-soaked April, and bagged cement aimed at retail and self-construction customers stayed weak as consumer sentiment lagged. Concrete volumes dropped 18.6%, and aggregates fell 12.2%, both hit by softer demand from public works and construction companies.
Costs also outran prices in the core cement business, with unit costs up 5.4% against a 3.6% increase in pricing, driven by higher depreciation tied to a recently completed bagging project, along with higher packaging, maintenance, and freight costs. Selling and administrative expenses jumped 15.7% to Ps. 28,858 million on higher salaries, and now eat up 12.1% of net sales. The result was a consolidated Adjusted EBITDA margin of 20.2%, down 97 basis points from a year earlier and down roughly 466 basis points from the prior quarter. The railroad segment, despite its volume growth, saw its own margin flip to negative 5.2% from a positive 9.8% a year ago as fuel and labor costs rose. Faifman said the company is focused on preserving its efficiency gains while it waits for stronger activity in the second half.
A Cheap Stock Gaining Believers
Hedge fund ownership rose to 15 funds in the most recent quarter from 13 the quarter before, a modest but positive shift. Short interest is light at just 2.06% of the float, showing little organized betting against the stock. Loma Negra trades at 9.92 times forward earnings, as of September 11, a low multiple that leaves room to run if the margin recovery management is counting on actually shows up. Rising fund interest paired with thin short interest and a single-digit multiple suggests the market has not yet fully priced in optimism or pessimism about what comes next.
What The Second Half Must Prove
The quarter leaves a clear split between the income statement and the business underneath it. A calmer currency environment and a lighter debt load did the heavy lifting on net profit, while cement, concrete and aggregate volumes all moved lower and costs outran prices in the core segment. For the currency-driven gains to matter over time, the volume recovery Faifman is waiting for in the second half needs to materialize, particularly in bagged cement and in the public works-linked concrete and aggregates businesses. If it does not, the margin pressure seen this quarter could persist even as balance sheet improvements continue.
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