Good morning, and welcome to the Loma Negra third quarter 2019 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 that this event is being recorded. I would now like to turn the conference over to Mr. Gastón Pinnel, Head of IR. Please go ahead.
Thank you. Hi. Good morning. Thank you for joining us today. We appreciate your participation in this conference call. By now, everyone should have access to our earnings press release and today's calls presentation, both of which were distributed yesterday after market close. Speaking during today's call will be Sergio Faifman, our CEO and Vice President of the Board of Directors, and our CFO, Marcos Gradin. Both will be available for the Q&A session right after the presentation. Before we begin, 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. Now, I would like to turn the call over to our CEO, Sergio Faifman.
Thank you, Gastón. Hello, everyone, and thank you for joining us today. I am pleased to welcome you again to Loma Negra third quarter 2019 earnings conference call. We will begin our presentation with discussion of the highlights of the quarter, and then Marcos will take you through our market review and financial results. Afterwards, I will share some thoughts for the remainder of the year. Finally, we will open the call to your questions. Starting with slide three. We ended the quarter with another solid set of results amid a challenging context. Prospective results in the August primary election lead to a high financial economic volatility that eroded the incipient recovery previously observed in some of the macroeconomic variables. The peso depreciated sharply and inflation surged again, affecting overall activity levels and the already weak growth expectation. In this line, our cement demand dropped by 7.5% in year-on-year basis.
As a major infrastructure, public work and private consumption has lowered down or even put on hold, probably until the economic landscape become more foreseeable. Our EBITDA grew by 2.7% with margin expansion of 289 basis points, as we were able to control our costs and start capturing benefit from previous efficiency initiative. During the quarter, we continued with our efforts to streamlining our production footprint. This is the reason why we reconverted the San Juan facility into a grinding and distribution center. In this quarter, we achieved an adjustment EBITDA of $52 million. When excluding the non-recurrent costs, the figure has reached $53 million, almost equal to the third quarter last year. The expansion of our L'Amalí plant continue on track. It's a key element of our long-term strategy and will contribute to our production efficiency and profitability.
The kick-in date is expected to be at the end of the second quarter next year. Our sound balance sheet should enable us to work through a more complex financial environment in Argentina. I will now hand the call to Marcos Gradin. Please, Marcos, go ahead.
Thank you, Sergio. Good day, everyone. Turning to slide four, let me start by providing a quick overview of the macro environment and industry trends in Argentina. The rather unforeseen mid-August primary election outcome impacted the few incipient signs of stabilization that we have observed in previous months. This higher financial and political uncertainty during the period triggered a sharp peso depreciation and a higher than expected inflation level, both impacting the economy in general and the construction activity in particular. During this quarter, the cement industry declined by a rate of 2.9% year-on-year. On a sequential basis, the third quarter surged by almost 9.5% compared to the second quarter this year, mostly explained by the seasonality effect in our industry. Taking a closer look at the cement demand, unlike with previous quarter, the bag segment declined less than the bulk segment.
Bag segment declined by 2.4%, and bulk decreased by 3.2%. Consequently, the share of cement sold in bulk remained almost unchanged at 42% when compared with the same period one year ago. Looking towards the last part of the year, we expect the industry to continue suffering from a weak economy and a high volatility environment. In this line, economy downgraded GDP growth expectation for 2019 to -3% from a pre-PASO level of 1.4%. Additionally, economy's expectation for 2020 also deteriorated drastically from an expansion of 2.2% to a contraction of 1.7%.
In this end, at this moment, we choose to be more cautiously until the key guidelines are defined by the new administration. Please turn to slide five for a review of our top-line performance by segment. Revenues were down 7.6%. For the quarter, cement revenues dropped by 4%, impacted by sales volume drop of 7.5%, and partially compensated by real terms price increases. In Paraguay, revenues were down 1.7%, with volumes declining 1.1%, affected by a slower than expected public works execution, and in part offset by the private sector demand. Prices remained practically unchanged. Concrete segments presented a decline of 37.7% in revenues, as both sales volumes and prices were down when compared to the strong third quarter in the year ago period.
Several large infrastructure projects that had commenced in recent years were in completion phase, and during this year, other new large projects were either slowed down or even put on hold. For the railroad segment, volume transported contributed positively to revenues. However, it was not enough to compensate the drop in building materials and chemical volumes, resulting in a total decline of 9.4%. By contrast, aggregates revenues were up 2% year-on-year during the period, driven by improving volume. Moving on to slide six, consolidated gross profit for the quarter was up 7.3% year-on-year, with a margin expansion of 368 basis points, reaching 26.6% in the quarter, reflecting that production costs were under control and the benefits from the footprint adequacy efforts achieved in the second quarter this year. Non-recurrent costs related to the converting San Juan accounted approximately to ARS 61 million or $1.2 million.
If excluded, gross profit would have grown by 10%, with margin expansion of 435 basis points to 27.2%. SG&A expenses as a percentage of revenues decreased by 22 basis points to 6.6%, positively impacted by commercial and administrative structure adequacy measures previously adopted in first quarter of 2019, together with a further reduction in the effective sales tax rate. Please turn to slide seven. Despite the softer demand, we reached consolidated adjusted EBITDA growth of 2.7% in the quarter, over ARS 2.6 billion or ARS 52 million, with margin expanded 289 basis points to 28.8%, mainly driven by cement and further supported by growth in railroad. Excluding the non-recurring charges, the EBITDA margin would have been 29.5%, reaching $53 million as in the same period one year ago.
When excluding the application of inflation accounting, adjusted EBITDA for the cement segment in Argentina increased 52% year-on-year. The margin expanded by 90 basis points to 31%. Excluding the non-recurrent cost, would have been 31.8%. Likewise, Paraguay posted around 57% growth in adjusted EBITDA, with a margin of more than 45%, improving 156 basis points compared to third quarter 2018. Our concrete segment reported an increase in adjusted EBITDA, reaching ARS 47.8 million , with the margin expansion of 73 basis points from 4.1% to 4.8%, as we adapted the productivity structure to the new demand level. We continued to post margin expansion in our railroad segment, with adjusted EBITDA margin up more than 357 basis points year-on-year to 14.5% as a result of structural adequacy efforts. Aggregate segment adjusted EBITDA margin reached 4.1%.
Our cement business in Argentina remained relative stable situation in terms of recurrent EBITDA per ton measured in US dollars, around $28 per ton, 7% over the year-ago quarter. Please turn to slide eight. Net majority income for the quarter reached ARS 50 million. Total final results presented a loss of ARS 1.6 billion compared to a loss of ARS 1.4 billion in the third quarter last year. The effect depreciation resulted in a foreign exchange loss of ARS 1.5 billion or ARS 200 million higher than a year ago. The higher interest rate environment resulted in a higher net financial expense of ARS 34 million. The net passive monetary position resulted in a gain of ARS 276 million. Moving on to the balance sheet. As you can see on slide nine, our balance sheet enable us to move ahead with our meaningful investment plan.
We continue to make progress in our capital expenditure plan, with investment for the quarter reaching ARS 3.1 billion or approximately $59 million. We finished this quarter with a net debt to adjusted EBITDA ratio of 0.87 times, compared to 0.43 times at the beginning of this year. Our net debt at the end of the quarter was $157 million, with a gross debt breakdown by currency of 47% in hard currency, 28% in PYG, and 26% in ARS. I will now hand the call back to Sergio.
Thank you, Marcos. Now please turn to slide 10. To wrap up this presentation, I would like to leave you a few key messages. Looking forward, the political transition seems to be evolving in an orderly way. Now the key factor will be the policies that the new administration is going to adopt in order to restore the financial stability and economic growth. Under this context, we are pleased to continue delivering strong results on the back of our history, leadership, and determination in the search for greater productivity. We keep executing on our immediate priorities. In this line of this third quarter, we put our effort in further streamlining our production footprint in the Cuyo region by recovering our San Juan plant into grinding and distribution center.
L'Amalí plant expansion is part of this strategy and will allow us to continue increasing production efficiency and profitability that will let us thrive in the future. This is the end of our prepared remarks. We are now ready to take questions. Operator, please open the call for questions.
Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star then one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star then two if you would like to remove your line. For participants using speaker equipment, it may be necessary to pick up your handset prior to pressing the keys. Once again, star one on your telephone keypad. We also would like to ask that you please limit your questions to one question and one follow-up, please. If you have additional questions, you may re-queue for those questions, and they will be addressed. Please note that Mr. Sergio Faifman will be responding in Spanish immediately following an English translation. Please hold momentarily while we assemble our roster.
Our first question comes from Eric Neguelouart with Bank of America. Please go ahead, sir.
Hi. Good morning. Thank you for the call. I'd like to know if there's more visibility in terms of actual infrastructure spending during Fernández administration. Has he been vocal about his plans, and how do you see 2020 coming on after this?
Good morning, Eric. Thank you for your question. What we have heard from Alberto Fernández due to these measures are towards to incentivize the consumption, and regarding the construction, a housing plan that they are to put in place. Regarding other measures concerning infrastructure, we do not have additional information.
Gracias.
Our next question comes from Alejandra Obregón with Morgan Stanley. Please go ahead.
Hi. Good morning. Thank you for the call and for taking my question. I just have one on the cost side. Just wondering if you could help us understand how should we think of the footprint adequacy program going forward, and in that same line, whether there are some non-recurring costs that we should consider for the next quarters. Thank you.
Good morning, Alejandra. Thank you for your question. For the next quarter, we are not expecting any non-recurrent costs. For the rest of the year, we do not foresee any further footprint adequacy, so the cost should be similar than the previous quarters.
Thank you. Very helpful. Just to follow up, if I may, I think you mentioned earlier how bulk and bag were performing. Could you please repeat that for me? I wasn't sure I got that right. If you could kind of elaborate, how is that performing going into the fourth quarter? That would be very helpful. Thank you.
En el tercer quarter lo que hemos notado es una caída mayor del granel y una menor caída de la bolsa.
In the third quarter what we observed is that the bulk decreased slightly higher than the bag.
Eso tiene que ver con una caída o una terminación en los programas que había de infraestructura y una leve recuperación que empezamos a ver en el mercado en bolsa.
This has to do that some of the infrastructure plan got to completion phase and on the other hand, a slight ramp up in the consumption.
Hasta no tener nuevas medidas del próximo gobierno, creemos que esa va a ser la tendencia que se va a mantener.
Until we don't have new measures from the new administration, we expect this trend to continue.
Thank you very much. This was very helpful.
You're welcome.
This concludes our question and answer session. I would like to turn the conference back to Gastón Pinnel for closing remarks.
Thank you for joining us today. We appreciate your interest in our company, and 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. Again, thank you very much and enjoy the rest of your day.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.