Morning, welcome to the Loma Negra second quarter 2020 earnings conference call and webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. 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. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Gaston Pinnel, IR Manager. Please go ahead.
Thank you. Good morning, and welcome to our second quarter 2020 earnings release conference call. Above all, we hope you and your families are safe and well. 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 statement. Today's call will contain forward-looking statements. I refer you to the forward-looking statements section of our earnings release and recent filing 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, Gaston. Hello, everyone, and thank you for joining us today. First, I hope you and your family are safe and well. I would like to mention a few highlights of the 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 other questions. As a consequence of COVID-19 pandemic, we enter the second quarter amid an unprecedented nationwide lockdown, which impacted heavily on our businesses. Along the quarter, and depending on how the sanitation situation developing in each jurisdiction, some of these restrictions were softened or even lifted. In anticipation to the effect of the COVID-19, we took proactive action with a special focus on protecting our community and strengthening our financial condition. We adopt strict biosecurity protocols in our operation.
We remain diligent in our cash management, securing working capital needs, tightening fixed cost structure, reformulating our capital expenditure priorities, and extending short-term maturities. All together let us reduce our net debts and our net debt to EBITDA ratio to 1.17 x. As our country and the world continue the battle to COVID-19 pandemics, economic activity remains weak. Our adjusted EBITDA stood at $32 million, with a contraction of 24.6% in the quarter compared to the same quarter last year, heavily impacted in April and recovering since then. Relative to the cement demand after the initial plummeting of sale in April, we are now more encouraged by the improvement observed in May, June, and July in the bagged cements. Regarding the L'Amalí expansion project, and as we previously anticipated, work on site were resumed in late April after the temporary restriction due to COVID-19 were lifted.
The suspension, together with the biosecurity protocols adopted, have delayed the inauguration date of the project, which is now expected to be at the beginning of 2021. Once again, I want to thank all our people in Argentina and Paraguay who face enormous obstacles and show a great responsibility to keep this business running. I will now hand off the call to Marcos Gradin, who will walk you through our market review and financial results. Please, Marcos, go ahead.
Thank you, Sergio. Good day, everyone. I also hope you and your beloved ones are safe and well. As you can see on slide four, in April, the construction sector and the cement industry in Argentina suffered a severe contraction, revealing a high degree of adherence to the COVID-19 lockdown declared by the end of March, which is currently in different phases according to each jurisdiction. Since May, we observe a very strong rebound in the bagged segment, which besides being positively surprising, it provides right our expectation that household demand and self-construction was going to be a more relevant driver in this new scenario. The rebound of this segment was observed across Argentina and also in Paraguay. In June, the bagged segment posted a double-digit increase in a year-over-year basis.
By contrast, during this quarter, bulk segment suffered the most impact by the halt in infrastructure works, together with the restriction on private construction held in several areas of the country, including the city of Buenos Aires and the greater Buenos Aires area. Naturally, the share of cement sold in bulk increased by almost 15 percentage points from 56% in second quarter 2019 to more than 70%. We expect this trend to continue in the following months. Bulk demand could eventually start to catch up as main urban centers lift restriction on larger private construction works and when public works start to gain some momentum again.
Expectation about GDP growth for 2020 revolve around a double-digit decline. However, we are cautious and we are attentive to development of the pandemic in the country and to the beforementioned upside risk. Turning to slide five for a review of our top-line performance by segment. Consolidated revenues were down 30.1%, mainly affected by the very strong contraction of economic activity in Argentina. Cement sales volumes dropped 24.5% year-on-year, and revenues fell by 25.8%. As mentioned before, that segment rebounds vigorously since May, achieving very good levels on June and thereon. In Paraguay, the situation is more favorable, not only because of the own economic momentum of the country pre-pandemic, but also because the lockdown was more flexible. Altogether, the volumes during the quarter improved by 3.3% year-on-year and posted a record high during June.
Revenues from our railroad segments decreased 36.1% and year-on-year, closely related to the drop in transported building materials and frac sand and partially compensated by other service rendered. Revenues in concrete and aggregates in Argentina were the most impacted by the halt in public and private projects, plummeting 93% and 94% respectively. Moving on to slide six, consolidated gross profit for the quarter declined by 32.2% year-on-year. A heavier burden of D&A impacted gross margin, which contracted by 151 basis points, reaching 24.1% in the quarter. Our core cement operation in Argentina contributed positively as we benefit from favorable input cost and lighter fixed cost structure, reflecting footprint adequacy efforts achieved last year. SG&A expenses as a percentage of revenues increased by 209 basis points to 8.6% from 6.5%, heavily impacted by the sharp decline in revenues. Please turn to slide seven.
Our adjusted EBITDA was down 24.6% in the quarter, reaching $32 million. Yet consolidated EBITDA margin expanded by 204 basis points to 27.9%, thanks to margin expansion in our Argentina, Paraguay cement segments. When excluding the application of inflation accounting, adjusted EBITDA margin in our cement, masonry, and lime segment in Argentina expanded by 155 basis points to 30.7% as we benefit by a significant reduction in energy input cost and also by the footprint adequacy efforts achieved last year. Also, Paraguay posted an adjusted EBITDA margin improvement of 104 basis points to 42.4%. Railroad adjusted EBITDA margin deteriorated to 6.9% from 12.8%, while concrete and aggregates posted a - 18.3% and - 173% respectively. These two latter segments were much severely affected by the restriction to execute construction works in major urban centers.
EBITDA in U.S. dollars per ton stood at $36, decreasing around 3% compared with the same period last year as it was affected mainly by the drop in volumes. Moving on to the bottom line on slide eight, net income for the quarter decreased by almost 93% year-on-year, reaching ARS 111 million, resulted mainly from an adjusted EBITDA contraction and a negative impact total foreign exchange loss. Total finance results represent a loss of ARS 1.1 billion compared to a gain of ARS 377 million in the second quarter of the previous year, mostly explained by a foreign exchange loss of ARS 560 million compared to a gain of ARS 414 million in second quarter of 2019. The higher interest rate environment, together with the higher gross debt, resulted in a net financial expense of ARS 615 million, ARS 38 million higher than in the previous quarter.
The net passive monetary position resulted in a gain of ARS 431 million. Measured in U.S. dollars, our net income decreased 59.1% to $10 million in the quarter from $35 million in the year-ago quarter. Moving on to the balance sheet, as you can see on slide nine, during the second quarter, we remained diligent in our cash management, securing working capital needs, tightening fixed cost structures, reformulating our capital expenditure priorities, and extending short-term maturities. Altogether let us reduce our net debt by $36 million - $200 million and our net debt to EBITDA ratio to 1.17 x from 1.26 x in the first quarter this year. Gross debt by currency breakdowns like this, 48% in Argentine pesos, 37% in hard currency, and 15% in guaraníes.
Our capital expenditure plan continued with investment for the quarter reaching ARS 1 billion or approximately $15 million, almost entirely dedicated to the expansion project. As the current situation continues to be conditioned by the COVID-19 restrictions, we remain particularly on top of our liquidity and our liability management. During this quarter, we have rolled over short-term maturities. We continue searching for opportunities that will allow us to further improve our capital structure. For our final remarks, I would like to hand the call back to Sergio.
Thanks, Marcos. Now to wrap up the presentation, I please ask you to turn to slide 10. Health and safety of our employees are always a priority, as is it our commitments with our communities, our supplier and customer, and of course, our shareholders. However, our business suffered a heavy toll back in April, with sales plummeting in all segments. We are now more encouraged by the strong recovery observed in May, June, and July in the bagged cement. At some point in time, bulk cement should also awake, particularly in the Buenos Aires metropolitan area, where the restriction are being more severe. From the macroeconomics perspective, having the government reach an agreement with bondholder is a step in the right direction. In this context, we understand that the construction sector is going to be a key sector in the so much needed economic turnaround.
Still, the recovery path is uncertain and rather challenging. Therefore, we remain cautious about providing guidelines for 2020 in this growth. At the end of April, we had resumed works on L'Amalí expansion project, which is now back on track. Naturally, the temporary suspension, together with the biosafety protocols adopt, have delayed the inauguration date of the project, which is now expected to be at the beginning of 2021. We remain alert and cautious regarding the evolution of the worldwide crisis, which ending seems hard to predict. I would finally like to thank our people who, in this unprecedented COVID-19 situation, show a great responsibility and resourcefulness in order to overcome difficulties and to keep on running the business. This is the end of our prepared remarks. We are now ready to take questions. Operator, please open the call for questions.
Then we will now begin the question and answer session. To ask a question, you may press star then one on the touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Also, please note that Mr. Sergio Faifman will be responding in Spanish immediately following an English translation. At this time, we'll pause momentarily to assemble the roster. Our first question today will come from Eric Neguelouart with Bank of America. Go ahead.
Yes. Hi, good morning. Thank you for your time. Just a quick question from my side. Thinking about bagged cement and the increase in demand seen during the second half of the quarter, I'd like to know how much of this is from an actual increase in demand and how much you think would come from low availability of bulk cement, and how sustainable the incremental demand would be for the remainder of the year. Thank you very much.
Good morning, Eric. Thank you for your question. [Non-English content] You take a look to the demand, the strong driver of demand during the quarter was the bagged segment, and bulk represented approximately 20% of total demand. [Non-English content] What is behind this situation is that there are two points. The first one is that in the metropolitan area, basically Buenos Aires city and the surrounding region, there is a restriction to operate in private constructions. The other thing is that this is also the case in some parts of the rest of the country. [Non-English content] Taking a look to some numbers, June and July, the bagged segment is approximately 50% above the year ago month, and bulk is approximately 50% below the June and July figures of last year. [Non-English content]
It's quite probable that considering the lift in the restrictions to operate together with the upcoming public works that we expect, the bulk cement should also increase the dispatches.
Thank you.
Once again, if you would like to ask a question, please press star then one. Our next question will come from Antonella Rapuano with Santander. Please go ahead.
Hi. Well, congratulations for the results, and thank you for taking my question. I was wondering if you can comment a little bit on the pricing dynamic that you have seen so far and also what you expect for the coming months, considering that analysts are expecting an acceleration in inflation rate. Also, if you see any risk of price controls, given your experience in the past with the Peronist government. Thank you.
Hi, Antonella. Thank you for your question. [Non-English content] First, I would like to stand out that besides the price increases during the quarter that were below what we could have achieved, the important thing to stand out is that our cost control, together with the fixed cost restructuring that we did last year, enabled us to keep a certain level under control of our EBITDA per ton. [Non-English content] The price dynamic during the quarter was not as usual, especially due to the lockdown and the slow recovery path at the beginning of the lockdown. [Non-English content] Already for June and July, the pricing dynamic came back to normal, and we expect for the rest of the year to be in line with inflation and other parameters that we take into account.
Once again, if you would like to ask a question, please press star then one. At this time, I would like to turn the conference back over to Gaston Pinnel for any closing remarks.
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 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 your line at this time.