Mar 11, 2021
Operator
Good morning, and welcome to Loma Negra Fourth Quarter 2020 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 Mr.
Sergio Faifman will be responding in Spanish immediately following an English translation. Please note, this event is being recorded.
I would now like to turn the conference over to Mr. Gastón Pinnel, Head of Investor Relations.
Please, Gastón, go ahead.
Gastón Pinnel
Thank you. Good morning and welcome to Loma Negra's fourth quarter and fiscal year 2020 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.
Sergio Faifman
Thank you, Gastón. Hello, everyone, and thank you for joining us today.
First, I hope you and your family are safe and healthy. As always, I'm going to mention a few highlights of the fourth 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 saw from our release we issued yesterday, in the fourth quarter, we achieved an outstanding performance on the back of our cement business.
The momentum is quiet encouraging as the bulk cement as shown in bagged cement on the volume expansion in the same month. The recovery pathway of cement dispatch was consolidated, as cement demand in the fourth quarter experienced a strong sequential growth and an overall volume increase of around 23%, with every division of the country undergoing similar dynamics.
Coupled with volume increase, our diligence on cost control and our pricing discipline enabled us to grow our EBITDA, expand our margin by 415 basis points and reach our record-high EBITDA per ton. Our adjustment EBITDA in the quarter was $58 million, with an expansion of 33% compared to the same quarter last year.
For the full fiscal year 2020 and bearing in mind the uncertainly we faces along the year, I would like to highlight the resiliencies and determination of our organization. Together, we were able to deliver again excellent results, an EBITDA of $171 million, with margin of 33%, while strengthening further our solid balance sheet and executing our strategic L’Amali expansion project.
We will expect to start producing clinker later this month and to be fully operation by middle 2021.
Marcos Gradin
Thank you, Sergio. Good day, everyone.
As you can see on slide four, leaving behind the fierce drop of beginning of 2020, the year ended with an estimated GDP drop of 4.4% in the fourth quarter of 2020 and a full year drop of 10%. For the full year 2020, the cement industry dropped by 11.5% to 9.75 million tons, needing to go back almost a decade to find similar industry volumes.
During the last quarter of 2020, we have observed a sustained recovery momentum in the construction activity and cement demand, with a volume expansion of 24.1%. Promisingly, in the first couple of months of 2021, the industry posted similar positive growth dynamic, with January and February volumes expanding by 20% and by 18% respectively.
The main driver behind this trend is bagged cement sales, which even posted a record high level in October and which is explained by a surge in self-construction and retail demand. Positively, since November, bagged cement started to contribute with positive year-on-year growth.
Certainly the economy as a while still faces different tests particularly on the macroeconomic outlook, expectation of our GDP growth for 2021 revolve around a mid-single-digit expansion definitely far from pre-pandemic levels. In this sense, we carefully watch the strength of different economic sectors as they are reopening for businesses.
Surprisingly, the share of cement sold in bag increased by almost 680 percentage points from 61% in first quarter 2019 to almost 68% in this quarter. We expect this breakdown to remain rather stable on the following month.
We expect bag demand continues to catch up as lifted restriction on larger private construction works and public works are making the segment to gain some momentum again. Turning to Slide 5 for a review of our top-line performance by segment, consolidated revenues increased year-on-year by 20.6% on the back of our core cement masonry and lime business which expanded revenues by 26.9% due to higher demand, higher market participation together with stable pricing.
Sergio Faifman
Thanks, Marcos. Now to wrap up the presentation, I please ask you to turn to Slide 10.
Definitely 2020 will be remembered as one of the most challenging years in decade. We are proud of the action taken to look after our people, our community and our customers.
Since the beginning of this crisis, our priority has been the health and safety of our people and their families. That is why we quickly firm and adopt committed to manage and monitoring the situation.
Firstly, we temporarily suspend production in our plant, as well as the security of our expansion project need during this situation, we never lost focus on the importance of security of working capital needs, optimizing costing and reforming our capital spending priorities.
Operator
Thank you. We will now conduct a question-and-answer session.
Also please note that Mr. Sergio Faifman will be responding in Spanish immediately following the English translation.
Our first question is from Nikolaj Lippmann from Morgan Stanley. Go ahead.
Nikolaj Lippmann
Thank you very much, and thanks for taking my questions. Congrats on the very solid strong numbers there.
My question is really related to costs. So two elements of that.
First, the sustainability of this cost reduction at a cash cost level for U.S. as winter approaches to what degree do you think that you can rely on local gas vis-à-vis buying petcoke?
And related -- and a similar question related to the L´Amalí expansion. To what degree, do you think that any cost reduction that you will have there will be basically in addition to your -- to EBITDA per ton and then you will keep that, and to what degree do you -- are you thinking of trying to invest some of that back into the market?
Thank you very much and again congrats on the numbers.
Sergio Faifman
Hi, Nikolaj, thank you for your question. Regarding our cost, yes, we believe they are sustainable looking forward.
This year we had a considerable reduction in our variable cost in energy, electrical energy and thermal energy. We have an advantage to produce using natural gas comparing to petcoke.
This advantage is going to be further increased in the future once we have the L´Amalí second line, because in that way, we're going to be able to optimize our working capital and to run more in winter. Regarding the benefit from the second line of L´Amalí, there is no doubt that most of those benefits we already implemented.
Those related to structure and fixed costs were already implemented. Logically since we already have improved our thermal and electrical costs, the benefits from a higher productivity in the second line are less.
Looking forward, independently from what we -- what happened in the past we're going to have a better performance in the second line. And also the higher volumes are going to be -- we're going to be able to produce them with the same structure.
Nikolaj Lippmann
Thank you very much.
Operator
Our next question is from Alberto Valerio from UBS. Go ahead.
Alberto Valerio
I have three quick one on my side. The first one about debt payments I saw that the maturities for the next year.
And how long would be this more -- it's mostly in foreign currency right? And how it would be can Loma get official U.S.
dollars for those payments or must go for the new dollar?
Marcos Gradin
Alberto, thank you for your question. The maturity of our debt profile, it's not concentrated on one only maturity.
There are several payments that we have to make. And we are relying on getting access to official FX, yes.
It's -- obviously the situation can change. But we are confident that we are going to use -- that we are going to be able to obtain those payments in U.S.
dollars.
Alberto Valerio
Perfect Marcos. Thank you very much.
And my second one would be about the next steps for Loma when L’Amali project is gone by mid of the year and the company probably reaching the net cash in the next quarter. How long will you use this firepower?
Are you thinking increased dividends if you can distribute them, or there are any extension plan or M&A?
Sergio Faifman
Hi Alberto, thank you for your question. So, currently, we are working on our Board of Directors within the financial committee where we are analyzing all the alternatives that's going to present after the expansion project of L’Amali.
The further decision that was made that we took last year at the end of the year is the repurchase plan that is undertaken now. So, the other alternatives that -- for the use of cash which have pros and cons are still under analysis.
Alberto Valerio
And congrats.
Sergio Faifman
You're welcome and thank you very much.
Operator
This concludes our question-and-answer session. I would like to turn the conference back over to Gastón Pinnel for closing remarks.
Wait, we have Nikolaj Lippmann back. Nikolaj Lippmann from Morgan Stanley has another question.
And we have another person.
Sergio Faifman
Okay.
Operator
Go ahead Nikolaj.
Nikolaj Lippmann
Sorry for coming back. And thanks for taking another question here.
I was just wondering if you could -- your rail concession will expire shortly. If you can provide a bit of an update on sort of what's going to be the base case as you're seeing it right now and how it potentially could affect some of your operations?
Thanks.
Sergio Faifman
Nikolaj The railway concession is due on 2023. So, the original concession had a provision for an extension for additional 10 years and the government is starting this renewal.
So, the information that we have and the meetings that we are having with the government did not -- doesn't have a formal entity yet. And the idea would be to go to an open access scheme where the current concessionists are going to be able to operate on the trucks -- on the current trucks.
So, in that way the government or the yes, national government is going to -- should take care of the investment to maintain the railways. And each operator should take care of the maintenance of the wagons and then pay a fee to operate on those trucks.
So, we expect that this new structure should have -- should be beneficial for Loma Negra not only as the logistic costs should be reduced, but also the investments.
Nikolaj Lippmann
Thank you very much guys.
Operator
Our next question is from Coleman Clyde from HSBC. Go ahead.
Coleman Clyde
Hi gentlemen. Thank you for taking my question.
Just had a quick one. Could you give us a little bit of color on the outlook for volumes and pricing in 2021?
Obviously, you finished the year on a very strong note on the volume side. How much of that momentum do you see carrying through the year?
And then as well in terms of the bulk versus bag breakdown, obviously, there's a lot more bag cement sales this year. What kind of margin benefit did that have this year?
And do you expect that reverse -- last year. And do you expect that reversing in 2021?
Thanks.
Sergio Faifman
Hi, Coleman, thanks for your question. So for this year, we are expecting GDP growth between 5.5% and 7%.
So we still do not have a provision for the industry growth, the cement industry growth. But taking a look to the history, there has been a multiplier of two times approximately.
So our expectation for the price increases is to be in line with the Loma Negra cost inflation. And as we always mention, this -- we consider a mix between inflation and the FX depreciation as we have part of our cost with that -- as a component of US dollars.
We do see a recovery in the bulk segment, which is coming from lower volumes. And also many announcements of different public works in the province -- in the other provinces, which are starting to be implemented.
Profitability in both bulk and bag are quite similar. So, this shouldn't have an impact in the consolidated profitability.
Coleman Clyde
Got it. Thank you very much.
Sergio Faifman
You’re welcome.
Operator
This concludes our question-and-answer session. I would like to turn the conference over to Gastón Pinnel for closing remarks.
Gastón Pinnel
Thank you for joining us today. We appreciate your participation and your interest in our company.
We always look forward to meeting you over the coming months and providing financial and business updates next quarter. In the meantime, the team remains available to answer any questions that you may have.
Thanks again, and stay safe.
Operator
The conference has now concluded. Thank you for attending today's presentation.
You may now disconnect.