20-F: Loma Negra Details Share Capital and ADS Structure

Loma Negra C.I.A.S.A. filed a Form 20-F detailing its share capital structure, including ordinary shares and American Depositary Shares (ADSs), and outlining the rights and procedures for ADS holders.

Summary

• Loma Negra C.I.A.S.A. has registered two classes of securities with the SEC: Ordinary Shares and American Depositary Shares (ADSs), both trading on the NYSE under the symbol LOMA.
• As of December 31, 2025, the company's share capital consisted of 583,483,151 ordinary shares with a par value of Ps. 0.10 per share.
• The filing provides a comprehensive description of the rights of ordinary shareholders and ADS holders, including voting rights, redemption and appraisal rights, preemptive rights, and liquidation rights.
• It details the role of JPMorgan Chase Bank, N.A. as the depositary for the ADSs and outlines procedures for dividends, distributions, and voting.
• The document also covers material Argentine tax considerations for shareholders and ADS holders, as well as U.S. federal income tax implications, including PFIC rules.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the significant decline in profitability and revenue in 2025, coupled with the substantial risks associated with Argentina's economic and political environment.

Positives

• The company has a clear and detailed description of its share capital structure and the rights associated with its ordinary shares and ADSs.
• Comprehensive information is provided regarding the depositary arrangements and the procedures for ADS holders.
• The filing includes detailed explanations of Argentine and U.S. tax implications for investors.
• Loma Negra's commitment to transparency is evident through the detailed disclosure of its corporate governance practices and risk factors.

Negatives

• The filing is highly technical and legalistic, requiring careful interpretation.
• The significant risks associated with operating in Argentina, including economic instability, inflation, and currency fluctuations, are extensively detailed.
• The company's controlling shareholder structure and potential changes therein introduce uncertainty.
• The company's railway concession for Ferrosur Roca S.A. is subject to ongoing renegotiations and potential early termination, posing a risk.

Risks

• Macroeconomic instability in Argentina, including high inflation, currency devaluation, and potential government intervention, poses significant risks to the company's operations and financial condition.
• The cyclical nature of the cement industry and potential downturns in construction activity could adversely affect revenues and profitability.
• Increased competition from domestic or international players could lead to reduced market share and profitability.
• Energy costs represent a significant portion of the company's cost structure, and price volatility or shortages could materially impact operations.
• Changes in environmental regulations and the potential impacts of climate change could lead to increased compliance costs and operational challenges.
• The company's operations are subject to various legal and administrative proceedings, which could result in unfavorable rulings and financial liabilities.
• Cybersecurity threats pose a risk to the company's operations and reputation, despite existing security measures.
• The market price of the company's ADSs may fluctuate significantly due to various factors, including economic and political conditions in Argentina.
• The substantial share ownership position of the controlling shareholder limits minority shareholders' ability to influence corporate matters.
• The pledge of shares by the controlling shareholder could lead to market fluctuations and a potential change of control.
• The early termination or renegotiation of the Ferrosur Roca S.A. railway concession could materially affect the company's business and results of operations.

Future Outlook

The company's future outlook is heavily influenced by the macroeconomic conditions in Argentina, including inflation, currency stability, and government policies. While the company has outlined its business operations and financial performance, the economic and political landscape in Argentina presents significant uncertainties that could impact future results.

Management Comments

• "We believe that our brand recognition is important, given that bagged cement represents a significant part of the cement sold in Argentina."
• "We believe that the equipment in operation at our LAmal and Olavarra plants is in optimal condition to avoid any interruption in cement and lime production."
• "We believe that the equipment in operation at the La Pampita y Entorno quarry is in optimal condition to maintain continuity of operations."
• "We believe that our cash and cash equivalents on hand, cash from operations and borrowings that we believe are available to us, will be adequate to meet our capital expenditure requirements and liquidity needs at least for the next 12 months."

Industry Context

StockSavvy.ai notes that Loma Negra operates in the highly cyclical cement and construction materials industry in Argentina. The company's performance is closely tied to the country's economic health, infrastructure spending, and regulatory environment. Its vertically integrated model, from limestone reserves to distribution, provides some resilience, but the overall market is subject to significant macroeconomic volatility.

Comparison to Industry Standards

• Loma Negra's cement production process adheres to dry-process technology, incorporating state-of-the-art equipment, which aligns with modern industry standards.
• The company's quality control measures and ISO 9001 certification demonstrate adherence to international quality management standards.
• The company's use of co-processing for waste management aligns with growing industry trends towards sustainability and circular economy principles.
• Loma Negra's investment in renewable energy sources (57% of electrical power requirements in 2025) exceeds the legal minimums and reflects a commitment to sustainable energy practices, which is becoming an industry benchmark.

Corporate Governance

Legal Proceedings

• The company is involved in various legal and administrative proceedings, including civil and labor claims, with a total amount in controversy of Ps. 18,363 million as of December 31, 2025.
• A class action lawsuit filed in New York State Court was settled for US$24.6 million, with a final judgment rendered on March 3, 2025.
• Antitrust investigations by the CNDC have been ongoing, with some cases closed without findings of anti-competitive practices against Loma Negra.
• The company has no material contingencies that could negatively impact its financial results as of December 31, 2025, beyond the provisions made.

Related Party Transactions

• Transactions with InterCement Participaes S.A. and its subsidiaries for shared administrative functions and services, conducted on an arm's length basis.
• A know-how transfer agreement with InterCement Participaes S.A. for technical expertise, which expired in August 2023.
• The company provided services to InterCement Participaes S.A. under an agreement that expired in September 2023.

Stakeholder Impact

• Shareholders may experience volatility in ADS prices due to Argentine economic and political risks and the controlling shareholder's structure.
• Employees are subject to collective bargaining agreements and potential labor law reforms in Argentina.
• Creditors of InterCement Participaes S.A. may be impacted by the judicial reorganization plan, which could affect Loma Negra's indirect ownership structure.
• Suppliers and customers may be affected by the company's financial performance and the broader economic conditions in Argentina.

Next Steps

• Continue to monitor the effectiveness of the Argentine government's economic stabilization measures.
• Evaluate the impact of ongoing renegotiations and potential changes to the Ferrosur Roca S.A. railway concession.
• Assess the company's ability to manage costs and maintain profitability amidst high inflation and currency volatility.
• Monitor any developments regarding the judicial reorganization of InterCement Participaes S.A. and its potential impact on Loma Negra's ownership structure.

Key Dates

Recommendation

While Loma Negra's business operations are substantial, the significant decline in profitability in 2025, coupled with the pervasive macroeconomic and political risks in Argentina, warrants a cautious approach. The company's ability to navigate these challenges, particularly inflation and currency volatility, will be critical. The ongoing uncertainty surrounding the railway concession and the indirect controlling shareholder's judicial reorganization also adds to the risk profile. A 'hold' recommendation reflects the balance between the company's established market position and the considerable external risks.

Keywords

Loma Negra, SEC Filing, Form 20-F, Ordinary Shares, American Depositary Shares, ADS, Share Capital, Corporate Governance, Argentine Law, Taxation, NYSE, BYMA, Depositary Receipts