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28 March 2019

Cementos Argos posts net income increase

First publishedon www.AggBusiness.com

Cementos Argos posted increases in its net income and EBITDA (earnings before Income tax, depreciation and amortisation) during 2018.

The Colombia-based company - a concrete and cement supplying subsidiary of Grupo Argos that serves the Latin America, US and Caribbean markets - sold 16 million tonnes of cement and 10.3 million cubic metres of concrete during the year, which represented revenues of US$2.68bn (8.4 trillion Colombian pesos). It obtained an EBITDA of US$0.49mn (CP1.54bn), with growth of 8% and an EBITDA margin of 18.3%. Net income for the year totalled US$57.03mn (CP178,563mn), which Cementos Argos says represents substantial growth compared to 2017.

The company provided a total of total of 5.7 million tonnes of cement to the US market in 2018, 5.0 million in Colombia, and 5.1 million in Central America and the Caribbean.

Juan Esteban Calle, president of Cementos Argos, commented: "Today we are a growing multinational that operates in 15 countries and reaches more than 34 destinations, focused on creating value from innovative solutions and products, logistic synergies and a balance of business between emerging and developed economies."

In 2018 Argos expanded its BEST cost efficiency initiative from Colombia to the US, Caribbean and Central America regions. The company says it has achieved productivity levels allowing it to focus on strengthening its capabilities and customer relationships. It adds that the BEST initiative has advanced its commitment to the digitalisation of the industry through the Argos ONE platform, which continues to be deployed sequentially in all markets. Argos ONE is an online platform enabling customers to place orders, follow their delivery, make payments and obtain quality analysis.

In the last quarter of 2018 Cementos Argos also launched its Sara chatbot in Colombia, a virtual assistant that uses artificial intelligence to simulate a conversation without human intervention.

The company says that more than 30% of the its revenues currently come from innovations, and in 2018 it made savings of more than US$8.1mn (CP25.3bn) from innovation initiatives.

During the year Argos continued with the expansion and specialisation of its value-added products. In Colombia, it launched a new line of dry mortars and developed around 250 new concrete formulations within its five existing lines. In the United States it expanded the coverage of value products, and in the Caribbean and Central America it complemented the Puerto Rico portfolio, began the export of pozzolanic cement and lime to Eastern Caribbean markets and presented new cements in Honduras.

The company says it will continue to focus its efforts on innovation and customer service, strengthening its competitive position in different markets, increasing EBITDA, optimising costs and expenses and capturing synergies. It adds that it will also focus on divesting non-operative and non-strategic assets, responsibly managing working capital and reducing capex, to boost the return on capital employed and achieve greater financial flexibility.

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