Good morning, and welcome to the Loma Negra Third Quarter 2024 Conference Call and webcast. All participants will be in a listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. Also Mr. Sergio Faifman will be responding in Spanish immediately following an English translation. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Mr. Diego Jalon, Head of IR. Please, Diego, go ahead. Diego Jalón: Thank you. Good morning, and welcome to Loma Negra's 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 we proceed, 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 of the corresponding financial measures is included in the earnings press release. Now I would like to turn the call over to Sergio.

Thank you, Diego. Hello, everyone, and thank you for joining us this morning. I would like to start my presentation by discussing the highlights of the quarter. Then Marco will take you through our market review and financial results. Following that, I will share some final remarks before opening the call to our questions. Starting with Slide 2. We are pleased to present Loma Negra third quarter results. This quarter, industry volume showed a strong sequential improvement, increasing by 25%, while still below last year level. The steady recovery in activity indicates that we moved past the most challenging period. Diving into the number, our top line reached ARS 180.7 billion, marking a 21.2% decrease in the quarter, primarily due to the lower cement dispatches. This quarter, Loma achieved a consolidated adjusted EBITDA of $55 million or ARS 43 billion, down 18.5% compared to the same period last year. Our EBITDA margin stood at 24%, reflecting an improvement of 78 basis points year-over-year, which is remarkable given the challenging scenario and its impact on demand. On a per ton basis, EBITDA was $35.4, also maintaining a very solid performance. It's important to note that third quarter margin are lower due to seasonal factors such as higher energy costs. However, our flexibility and production strategy allowed us to mitigate the full impact of winter costs. On the financial side, our balance sheet continued to strengthen with net debt at $177 million. As mentioned in our last call, this quarter required less capital, enabling us to delever and achieve a net debt ratio of 1.03x. I will now hand off the call to Marcos Gradin, who will walk you through our market review and financial result. Please, Marcos, go ahead.

Thank you, Sergio. Good morning, everyone. Please turn to Slide 4. When looking at the evolution of monthly cement sales for the industry, it is clear that cement dispatches have reached a significantly better level than in the previous two quarters. Volumes have increased by 25% sequentially. The same sequential comparison show an improvement of 6% in 2023 and recent figures for October are in line with September figures despite the impact of a national strike that affected the dispatches. Bulk cement dispatches are recovering more quickly, gaining ground in the dispatch mode breakdown and reaching 62%. In contrast, bulk cement has been more affected by the economic environment, the standstill in public works and lower activity levels in larger private projects. The central bank's market expectation report also points to an improved economic outlook, suggesting that the recovery will begin in the second half of this year, marking the end of the recession's most challenging phase. The construction activity indicator though still below 2023 levels, reflects this trend as well, gradually narrowing the year-on-year comparison gap. Positive indicators such as the steady recovery of real wages, the downward trend in inflation, fiscal surplus and lower interest rates are key factors that could enable a broader role for credit in our economy and encourage and accelerate foreign direct investment inflows. While macroeconomic conditions remain challenging, stable economic variables are essential for driving sustainable growth. Turning to Slide 5 for a review of our top line performance by segment. The third quarter top line show a decrease of 21.2% mainly due to a lower top line performance of the cement business, also followed by the rest of the segments. The cement, masonry cement and lime segment declined by 21%, with volumes contracting 17.1% year-on-year, coupled with softer price performance. Although the…

Thank you, Marcos. Now to finalize the presentation, I please ask you to turn to Slide 13. The third quarter showed a significant sequential improvement, clearly moving past the worst part of the recession. However, the recovery is still in its early stage, for the future progress needing to fully close the year-over-year gap. Our operational flexibility and production strategy enabled us to maintain healthy margins, mitigating the full impact of winter cold despite the lower dispatch level and difficult economic conditions. We are closely and optimistically monitoring the evolution of the economic challenges as inflation and interest rate decline. The real economy and activity level will have a more solid foundation for growth. The expansion of the credit and mortgage loan could be a significant drive for the construction sector in the near future. Similarly, the reduction in country risk, now below 1,000 points for the first time since 2019, signaling a positive step toward attracting foreign investment. Amid all the challenges, the country holds a growth potential ready to be unlocked, and LOMA is well positioned to support and drive the show now forward. To conclude, I would like to thank all our employees and stakeholders for their commitment and continued support. This is end of our prepared remarks. We are now ready to take questions. Operator, please open the call for questions.

[Operator Instructions] Also please note that Mr. Sergio Faifman will be responding in Spanish immediately following an English translation. And our first question today will come from Marina Mertens with Latin Securities.

I have two questions. The first one on prices. So with inflation slowing, prices are becoming less frequent. How do you see these pricing dynamics moving forward? And what effect could it have in volumes and revenues? And the second one. The bulk segment, it continues to be more depressed than the bag segment. So what catalyst do you see as necessary for larger construction projects to begin and for demand in this segment to pick up?

Regarding price dynamic, we are looking closely the evolution of how can we continue to follow on our dynamic on adjusting prices. Besides the lower inflation in the last three months, we have continued to adjust our prices on a monthly basis. Maybe with inflation of 2% or 1% per month, we can start thinking about adjusting prices on a three-month or four-month basis. With this level of monthly inflation, if we made them too spaced in time, when we have to increase our prices, it would be in a two-digit figure and that would be difficult for the market to take that adjustment. Regarding volumes, as you mentioned, bag cement has been recovering more fast and bulk cement is still lagging. Regarding larger projects, which is the target of bulk cement, with the RIGI and other bigger projects that are starting to gain pace, they are probably going to affect or impact the cement sales -- I mean, bulk cement sales. Sorry. Many private projects were monitoring the evolution of the effects. And with this -- with the steady evolution of the effects in the last couple of months, we are starting to pick up the pace. Another important driver for bulk cement is public works, and in that case, we are seeing how the new scheme involving the private sector in public works how is this going to evolve. So we are going to -- we are expecting this to start to impact volumes next year. But these two variables should have an impact on bulk cement dispatches in the upcoming months.

[Operator Instructions] And our next question today will come from Marcelo Furlan with Itau BBA.

I have one question related to dividends. I mean you guys posted deleveraging in this Q at 1x net debt EBITDA -- sorry, at 1x net debt-to-EBITDA. And you guys don't have any major projects underway. So my question is related to, if we could see some improvement in dividends maybe for the fourth Q or for 2025 as you guys still have a healthy capital profile. So this is my question.

Historically, third quarters are the ones that have a lower EBITDA margin. That's basically due to increased costs during the winter season. Additionally, this year, we had some extra hike in some costs that impacted during the second and third quarter. For example, the impact of the hike in prices of transport, the energy that we had between 400% and 700% impacted between May, and those -- and that effect impacted the second and third quarter. In general, as it typically happens in this process of high inflation, Loma gains margin because we kind of -- we have the capability of moving our prices quicker than our costs. So if you look at the margins of the 3Q, they are impacted due to higher winter costs. And probably you're going to see an improvement in the next -- in the coming quarter, basically due to the -- that now we are not going to have the impact on the winter cost primarily in energy, not because of the other costs that have been moving following inflation.

Okay. And a follow-up question here. What are you thinking about dividends going forward?

So far, we have -- we don't have anything planned for this year. For the coming months or next year, we are analyzing the capital allocation alternatives, thinking about the better alternative for our shareholders.

And our next question today will come from Esteban Arietta with Balanz.

Does InterCement situation impose any debt repayment covenants on Lomo Negra if control changes? And additionally connected to that, would a controlship to another company would trigger a tender offer for Lomo Negra shares?

There is no covenant regarding change of control that may have an impact on the Company. And regarding a tender, then the regulations of the NYC and CMB will apply considering that -- if an operation occurs.

And our next question today will come from Daniel Rojas with Bank of America.

Most of my questions have been asked, but I was curious and I was hoping to get a little bit more detail on the 25-kilo bag project you mentioned on the presentation. Does this make part of our strategy of selling smaller bags to get better prices? What are you hoping to get in that sense from selling that type of weight? Any color you can give us? And additionally to that, you've been very specific about the sequential recovery of cement volumes. I know you've given some details on the call, but could you give us any additional color?

The profitability of cement and bulk are very close or more or less the same. Obviously, bag had more price and also more costs. So the margins are better in bulk. And profitability is more or less the same. Regarding volumes, we can see one first stage until June and then a hike in volumes starting in July. That recovery that we are seeing starting in July is more or less 30% up the figures of the first six months. So only keeping this tendency, we are speaking about a recovery of -- or an increase in volumes for next year on a two figure digit.

Great. And if I may follow up. A lot of news has been published around the potential recovery of the mortgage market in Argentina. Can you give us some color on what you're seeing on the ground? How strong this recovery might be? Are banks jumping into the mortgage market? And are you starting to see permit activity, construction activity related to that? Or is it too early to tell?

Yes. Clearly, that's something that we have always said that would be very important for growth. Last few months, there has been a recovery on real estate sales, and there is a lot to grow in that matter as well. And many of those sales and those operations end up boosting future construction projects. So, if this continues, growth for sure is going to have an impact on future cement sales.

We'll conclude our question-and-answer session. I would like to turn the conference back over to Diego Jalon for closing remarks. Diego Jalón: Thank you, everyone, for joining us this morning. It was a pleasure for us to having this call. And we look forward to meeting you again in our next call. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines, and have a pleasant day.