Brazil reasonable but Argentina not so rosy for ALL

ALL is predicting that its volumes will maintain growth levels of between 10% and 12% in Brazil driven by an expected strong growth in return cargo volumes and new industrial projects coming on stream. Unfortunately yields will remain weak due to pressure on the spot freight market but this will be partially offset by the feeding through of the June diesel price reduction and an increase in return cargoes.

The position in Argentina is not so rosy for ALL where revenues account for less than 6% of the company’s total and only 3% of EBITDA. ALL faces a tough market and political environment where protests and blockages of the railroads continue to be a problem, resulting in volumes declining by 10.9% in H109 compared with the same period last year.

Latest estimates indicate a fall of 45% in the agricultural crop and a continuing decline in industrial production in the country, resulting in a significant impact on the transport of raw materials.