Loma Negra (LOMA) Q2 2026 earnings review
FX Gains Mask Operating Weakness as Margins Compress
Loma Negra reported a massive 1,269% YoY surge in Net Profit, but investors should look under the hood: this was entirely driven by smaller foreign exchange losses, not operational strength. At the operating level, the story is sobering. Adjusted EBITDA declined 2.5% YoY in local currency, and margins contracted nearly 100 bps YoY—and a sharp 466 bps sequentially—to 20.2%. While bulk cement and railroad volumes offered some support, retail and public works demand remains deeply depressed. Management is banking on an H2 recovery, but with cost inflation currently outpacing pricing power, the near-term setup remains challenging.
🐂 Bull Case
Despite local currency weakness, Adjusted EBITDA in USD actually grew 12.5% YoY to $38 million. The company is maintaining healthy unit profitability in hard currency terms.
Net Debt to LTM Adjusted EBITDA improved to 1.30x from 1.47x at the end of FY25. With the US$ 10 million Class 4 bond paid off, Loma Negra faces no remaining maturities this year.
🐻 Bear Case
Cement unit costs grew 5.4%, outpacing a 3.6% increase in average pricing. If the company cannot pass on inflation, operating leverage will remain negative.
Bagged cement continues to lag as retail self-construction suffers under consumer sentiment weakness. A weak April (exacerbated by heavy rains) set a low floor for the quarter.
⚖️ Verdict: 🔴
Bearish. The headline 1,269% profit growth is an accounting mirage driven by currency stabilization. The core reality is contracting margins, volume declines in 3 out of 4 segments, and an inability to price ahead of inflation.
Key Themes
Railroad Volumes Up, But Margins Turn Negative
A major red flag: Railroad volumes increased 10.1% YoY, yet the segment's Adjusted EBITDA margin violently reversed from +9.8% in 25Q2 to -5.2% this quarter. This highlights severe negative operating leverage, as management cited higher fuel and labor costs completely destroying profitability despite the top-line growth.
Cost Inflation Outpacing Pricing Power
In the core Cement, Masonry and Lime segment, unit costs increased 5.4% YoY, easily outstripping a 3.6% increase in average pricing. This dynamic caused the gross profit margin to contract 121 bps globally. The cost pressures were primarily driven by maintenance and freight costs reflecting fuel pass-throughs.
Retail & Public Works Collapse (Macro Impact)
The macroeconomic environment is crushing two specific channels: retail self-construction (bagged cement) and public works. This resulted in vicious volume contractions for Concrete (-18.6%) and Aggregates (-12.2%). While management pointed to heavy April rains as a culprit, the sustained lack of government infrastructure spending is a structural near-term headwind.
Bulk Cement & Industrial Clients Provide a Floor
Despite the retail collapse, total cement volumes only declined 1.4% YoY. This was salvaged by resilient demand for bulk cement from industrial customers and concrete producers, preventing a much steeper top-line contraction.
New Bagging Plant Increases Depreciation Drag
Innovation and CapEx came with a near-term cost. The recent completion of the 25-kilogram bagging project pushed depreciation and packaging costs higher in the quarter, directly contributing to the margin squeeze in the Cement segment. Management will need to prove the operational efficiencies of this investment in H2.
Pricing Discipline in Collapsing Segments
While Concrete and Aggregates saw massive volume declines, management executed strict pricing discipline. Concrete margin improved 867 bps (to -4.3%) and Aggregates improved 877 bps (to -18.6%). While still unprofitable, stemming the bleeding here via price-over-volume tactics prevented further consolidated EBITDA erosion.
Other KPIs
Reversing sharply from a loss of Ps. 22,291 million in 25Q2. This is the sole reason Net Profit exploded upward. A moderate pace of peso depreciation significantly reduced foreign exchange losses on USD-denominated liabilities (which make up 87% of total debt). Investors must isolate this non-operating metric to understand core business health.
Reversing from negative Ps. 29,743 million a year ago. However, this massive improvement was almost entirely driven by timing of tax payments (only Ps. 4.9B paid this quarter vs Ps. 61.7B in 25Q2). It reflects favorable working capital dynamics rather than underlying EBITDA generation.
Key Questions
Railroad Pricing Strategy
With Railroad volumes up 10% but margins flipping deeply negative due to fuel and labor costs, what is your strategy to pass these structural cost increases onto customers in H2?
Bagging Project ROI
The completion of the 25-kilogram bagging project increased depreciation and packaging costs this quarter. When will the operational efficiencies and expected margin accretion from this CapEx begin to materialize?
Demand Floor Visibility
You noted that May and June trends were more in line with previous years following a weak April. What specific indicators give you confidence in a stronger level of activity in H2, particularly regarding the stagnant public works sector?