Good morning, and welcome to Loma Negra’s Second Quarter 2021 Conference Call and Webcast. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Also, Sergio Faifman will be responding in Spanish immediately following an English translation. Please note that this event is being recorded. I would now like to turn the conference over to Mr. Gastón Pinnel, Head of IR. Please Gastón, go ahead. Gastón Pinnel: Thank you. Good morning, and welcome to Loma Negra’s second quarter earnings conference call. By now everyone should have access to our earnings press release and the presentation for today’s call, both of which were distributed yesterday after market close. Joining me on the call this morning will be Sergio Faifman, our CEO and Vice President of the Board of Directors; and our CFO, Marcos Gradin. Both of them will be available for the Q&A session. Before I turn the call over to Sergio, I would like to make the following Safe Harbor statements. Today’s call will contain forward-looking statements, and I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. This conference call will also include discussion on non-GAAP financial measures. The full reconciliation to the corresponding financial measures is included in the earnings press release. Now I would like to turn the call over to Sergio.

Thank you, Gastón. Hello, everyone, and thank you for joining us today. First, I hope you and your family are safe and healthy. As usual, I’m going to mention a few highlights of the second quarter, and then Marcos will walk you through our market review and financial results. After that, I will provide some final remarks, and then we will open the call to your question. As you all saw from our release we issued yesterday, we are pleased with the second quarter great performance which was mostly explained by our cement business. It is quite encouraging that the strong momentum experienced in cement sales seen last year, both on continual and it's already exceeding the pre-pandemic level with July posting the highest rate since 2016. Our world class operation enable us to expand our EBITDA by 74% and expand our margin by 483 basis point posting this second quarter since April, as higher operational level and cost control more than offset the impact of higher production during winter months compared to unusual second quarter of last year. Our adjustment EBITDA in the quarter was for $48 million, $22 million higher than in the same quarter last year impacted by COVID-19 pandemic restriction and $9 million higher when compared to pre-pandemic second quarter 2019 when mentioning U.S. dollar per ton every day increase compared with the same period last year around 28% and standing at $34 per ton. Regarding our capital structure, we have a solid balance sheet with the low net debt ratio of 0.13 times and some debt profile. During the quarter our bottom line was hurt by a one off deferred income tax charge related to recent tax reform. Marcos will elaborate on this later. Finally, in June, we inaugurated new kiln in L´Amalí plant which is now up and running and producing clinker. Full commissioning of the second line is moving towards completion and is now programmed for end of September. I will now handover the call to Marcos Gradin, who will walk you through our market review of our financial results, please, Marcos.

Thank you, Sergio. Good day everyone. As you can see on slide 4, leaving behind the fierce double digit stroke of GDP in 2020 is now expected to be partially recovered by year end. Construction activity measured by the remain strong and is recovering since last November. In the case of the seventh national industry sales, the recovery was much stronger. Actually, the recover cycle that started in September last year is now starting to exceed pre-pandemic levels of 2019 second quarter of 2021 posted a total volume of 2.8 million tons or 50.5% higher than second quarter reported 22% above second quarter 2018. We're breaking it down by segments both bag and bulk contributed possibility to grow. Naturally bag segments accumulate a longer recovery cycle and is already above 11% in respect to second quarter 2018. On the other hand, bag is still down around 9% when compared to second quarter 2018. Yet it has experienced a sharper recovery year-on-year, as it was the most hit segment by COVID-19 restrictions last year. Consequently, the share of seven bag increase from 22% in second quarter of 2020 to almost 39% in this quarter. We expect this record to remain rather stable on the following month with a moderate bulk recovery, seasonality and some public works activity could factory in. Certainly the economy as a whole still faces different tests, particularly on macroeconomic outlook. Expectation about GDP growth for 2021 revolve around 6.8% recovery definitely far from pre-pandemic levels. Turning to slide 5 for a review of our top line performance by segment. Consolidated revenues year-on-year increased by 46.6%, mainly reflecting the positive momentum experienced by our core seven business. With all segments contributing positively to self recovery. Segment measure on Lime segment was up 43.4% with volumes expanding 39.5% and…

Thank you, Marcos. Now to wrap up the presentation, I please ask you to turn to slide 13. As we expect cement demand recovery from last year's volume to continue, we foresee an expansion compared to pre-pandemic level of 2019. For the second half, both seasonality and public works could play an important role. Yet, we are cautious, as macroeconomic context could affect the recovery. At this point in time, impact relative to COVID seems more distance. However, we remind what's full to evolution of the new variance, both locally and globally. After inauguration in June, the brand new kiln in L´Amalí has starting to produce clinker and it's already contributing to our world class operation. Additionally, the new cement mill and dispatch center are planning to start up by the end of September. As we recently communicated, and in line with our expectation, a new open access scheme will rule in Argentina railroad network and concession will not be extending beyond the original expiration date of March 2023. Detailed guide regarding the new scheme are not yet available. Therefore, we are analyzing different scenarios, none of which should have a material impact on our current businesses and where the most probably is to become an operator continue the current operation. Last but not least, I would like to thank all our people and stakeholder for the commitment to Loma’s operational excellence without whom this set of solid result have been much harder to achieve. We are confident that supported by a robust and efficient productive footprint our solid capital structure under the guided team Loma has the base to continue thriving in the year to come. We are now ready to take question. Operator, please open the call for question.

Thank you. And we will now conduct a question and answer session. And our first question today will come from Alberto Valerio with UBS. Please go ahead.

Hi, Sergio and Marcos, thanks for taking my question. I would like to know about the dynamics in Argentina, the impression that we had here, which always made me know that the second quarter its seasonally weaker than the first one, but we estimate that decelerating relative to the first quarter. And with the preliminary data from July looks like Argentina is facilitated, accelerating again. So my question is, this is true the second quarter come a bit weaker than the strong first quarter. And with this, we can expect to recover in the second half of the year? Thank you.

So you're speaking about margins or about volumes?

About margins. I think the volume come as expected, but I think the price can a little bit below what we expect. So overall, the EBITDA that I was expecting was a little bit higher than what come because we saw a very strong first quarter?

Hi Valerio, thank you for your question.

So, typically, during winter months there's a seasonality effect on our production costs.

Additionally, when compared to the last year, we produce a very much lower amount of cement and including a lower price of gas derived from the pandemic situation.

Additionally, by this time of the year, we were expecting to be producing clinker with a new kiln in L´Amalí plant which ended up starting in June. So the benefits were not collected in the second quarter and we still producing, we were producing in the plant.

Perfect. Thank you very much. If you could just provide a follow up, call for the second half of the year should we see the active accelerating again?

So, yes, as you may saw on the AFCB reporting, July numbers were very good and actually they were the second best July in history.

And the first day base of August and also there what we foresee for the remaining of the year are quite optimistic.

Forecasting for the full year for the industry numbers above the 2019 pandemic levels.

Next question will come from Carlos Peyrelongue with Bank of America. Please go ahead.

Thank you. Thank you Sergio and Marcos for the call. My question is related to the new kiln in L’Amalí and the expansions. Can you comment on the expected margin expansion once you're up and running and provide some timing as to when you think this new kiln will contribute to margin and we will remain operating smoothly? Thank you.

Thank you for the question.

So, the numbers of the market will not only depend on the demand volumes, but also the cost of the energy.

Why we're saying that because the kiln in L´Amalí plant is much more efficient then the kiln in Olavarría, but there are also many other factors playing in.

So the efficiency of the new kiln regarding the specific consumption is around 10% better than the Olavarría kiln and we are now analyzing if it's better to run during the summer with summer costs of energy or during the winter with using PetCo and naturally higher energy costs.

So, now we are running the kiln and it's already working above the guarantee levels. And we are now planning to produce with this levels.

So a follow up on this. So the margin expansion that you mentioned, assuming that the things are running smoothly, and we'll have major surprises on the cost side is 200 to 300 basis points on margin, on a consolidated basis. Is that correct?

Yes. That's correct. 2% to 4% of margin increase.

Thank you so much. Appreciate it.

And our next question will come from Nikolaj Lippmann with Morgan Stanley. Please go ahead.

Thank you. Good morning gentlemen. Good morning, everyone. And ongoing congrats on good numbers. Two questions, or one question, I guess I'm allowed to so I'll break it into to one. I was wondering if you can give a bit of details on asset allocation given the change in the concession, if you're thinking about a bit of a plan B, maybe expanding your fleet, your fleet of trucks in case that there could be some disruption? And also, so the second part of the question would be how do you guys feel about aggregates in Argentina these days? Thanks. Thanks a lot. Thanks for taking my question.

Nikolaj could you repeat the questions because we can't hear you the first part? Sorry.

Sorry about that. My question relates to whether you got as the rail concession comes to an end and of course, every time that happens, there is a certain amount of risk associated with the new framework. Are you considering increasing? You have a very strong balance sheet? Are you considering buying a bit of increasing the fleet for logistics in case there's any sort of disruption? And also how are you seeing the aggregate market? Is that something that you're looking at in terms of possible use of cash making acquisitions in that space?

Hi Nikolaj, thanks for your question.

So regarding the railroad we do not foresee cost increases from now on.

Initially, we're planning to keep our operation as an operator in those tracks.

So, yes, besides the fact that yet there are no details from the government regarding Canon and other factors, we expect either to maintain or to even increase regarding the lower CapEx requirements.

Got it. Can you comment on whether you are seeing any opportunities in the aggregate market in Argentina?

So, we're not thinking on expanding on the aggregate business, but we are increasing margin thinking on what happened during the pandemic.

So one important point regarding the railways, we are considering L’Amalí 2. We have an advantage, yes, because an additional advantage, because we are not going to rely that much on Loma and we're going to increase the dispatch capacity from L’Amalí 2.

Got it. Thanks a lot guys.

And our next question will come from . Please go ahead.

Hi, good morning and thanks for taking my question and for the presentation. So going back to the estimate for the cement shipments for these years so the construction sector is interest dynamics, as you were talking about, and many attributes these to the FX gap. So what do you think is behind the recovery as our first question? And then as a second question, do you think that bulk cement will be covered with pre-pandemic levels during this year? Thank you.

Hi, Augustina. Thank you for the question.

So there are no doubts that the gap between the FX rates it has an impact on demand.

We also observe an increasing in public works especially small public works, while larger public works are still hampered.

And we also observe our consumer behavior to expand the places where they live. And this is arbitrary driving demand.

Pardon me everyone. It appears that our speaker has disconnected. Please wait while we rejoin them.

Sorry, we're having a small technical issue. We're going to be back in two minutes. Sorry for that.

And pardon me. I've rejoined the speakers.

Thank you. So when we observed July, yes, we observed that we are above pre-pandemic levels. Then when you take a look to both, it's a slightly lower than 2019 and back is slightly higher than 2019. And we are already with both volumes closer to 40% of total market volumes.

Thank you. And our next question will come from Alberto Valerio with UBS. Please go ahead.

Thank you. Thank you for taking my question again Sergio and Marcos. Just another one now about dividends. You know that Argentina remain with the restriction of capital. And my question is how further can you guys go with the buybacks?

Sorry Alberto. Are you asking about the buyback?

Yes, how much more you can do it.

The volume that we are applying for the second line of program is what we are allowed to do in the local markets. Yes. So in the fall of $2 million per month. That's the one that we are achieving. We spent almost 5 million in the year and quarter.

Perfect. And then for how long can you keep doing the buyback? There is a limit or it's the limits doing well?

The limit is 10% of total capital of L’Amalí, plenty of room.

Perfect. Thank you.

And this concludes our question and answer session. I would like to turn the conference back over to Gastón Pinnel for any closing remarks. Gastón Pinnel: Thank you for joining us today. We appreciate your participation and your interest in our company. We look forward to meeting more of you over the coming months and providing financial and business updates next quarter. In the meantime, the team same remains available to answer any questions that you may have. Thanks again and stay safe.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.