Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA): Business Model Canvas [Dec-2025 Updated]

You're looking to understand the engine room of Argentina's construction backbone, and honestly, breaking down the Business Model Canvas for Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) right now is critical, especially with InterCement negotiating a major stake sale. This company isn't just selling cement; it commands nearly 45% of the market, runs its own integrated railway, Ferrosur Roca, and posted $\text{Q3 2025}$ Net Revenues of $\text{Ps. 209.3 billion}$-that's serious scale. We need to see how their vertical integration, from vast limestone reserves to their 61% renewable energy usage, translates into managing those high fixed costs and the recent $\text{US\$ 113 million}$ bond refinancing. Dive in below to see the precise structure that keeps this giant moving, from their $\text{LomaNet}$ digital platform to their key activities managing costs and capacity expansion.

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) - Canvas Business Model: Key Partnerships

You're analyzing the core relationships Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) relies on to keep its operations running and its strategic direction clear as of late 2025. These partnerships are critical, especially given the recent ownership transition discussions and ongoing debt management.

The most significant partnership shift involves its parent company, InterCement. In late July 2025, InterCement reached an agreement in principle to negotiate the sale of its controlling 52% stake in Loma Negra, with a negotiation deadline set for August 15, 2025. This move is part of InterCement's liability restructuring, where the stake was valued at nearly R$4 billion (Brazilian Reais) at the time of the announcement. If the deal closes, an investment group led by businessman Marcelo Mindlin will gain control of this majority share, while the remaining shares remain publicly listed on the Buenos Aires and New York stock exchanges.

Managing the balance sheet is heavily reliant on relationships with financial institutions. Loma Negra recently executed a key refinancing move in July 2025 by issuing a new Class 5 corporate bond for a total of US$113 million. This new debt carries an 8% interest rate and a 2-year tenor. The proceeds from this issuance were strategically used to repay the remaining balance of maturing Class 2 bonds. As of the third quarter of 2025, the company's total Net Debt stood at US$206 million (or ARS 281,519 million). This refinancing activity directly impacts the company's leverage profile, which stood at a Net Debt/LTM Adjusted EBITDA ratio of 1.49x at the end of Q3 2025.

The continuity of raw material supply hinges on relationships with strategic suppliers. Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) actively seeks to secure its supply chain through formal agreements. It's defintely a core part of their operational strategy.

For nationwide distribution, the partnership with logistics providers is underpinned by the company's existing infrastructure. Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) utilizes its efficient network, which notably includes a 3,100 km railway concession in Argentina, to move products like cement and aggregates to key urban centers.

Engagement with government entities is a vital partnership, particularly for volume drivers. In the third quarter of 2025, sales volumes were explicitly supported by higher activity in public infrastructure projects concentrated in the Buenos Aires metropolitan area and the province of Santa Fe. The Aggregates segment also saw growth, up 26.3% year-over-year, driven by road construction and railroad projects, which implies close coordination with government or state-backed infrastructure planning.

Here's a quick look at the key financial and structural partnership metrics as of Q3 2025:

The philosophy governing relationships with suppliers focuses on long-term stability and compliance:

• Enter into long term agreement with suppliers.
• Ensure continuity of operations and guarantee of supply.
• Favor quality and technical/financial reliability.
• Require supplier registration and certification.
• Adhere to laws regarding environment and commercial rights.

Finance: draft 13-week cash view by Friday.

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) - Canvas Business Model: Key Activities

You're looking at the core operational engine of Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) as of late 2025. These are the things the company must do well to keep the lights on and the cement flowing.

Production of cement, masonry cement, lime, and concrete

The primary activity centers on manufacturing and dispatching core construction materials. The volumes reflect the challenging market conditions experienced through the third quarter of 2025.

Sales volumes for cement, masonry, and lime in 3Q25 were 1.37 million tons, representing a decrease of 5.4% year over year, even with a sequential increase of 12.8%. The concrete segment saw its volumes decrease by 1.1% year over year in 2Q25, though volumes improved by 44.0% sequentially in that quarter.

Operating the integrated railway network (Ferrosur Roca)

Managing the concession for the General Roca National Cargo Railway Network through its controlled company, Ferrosur Roca S.A., is a key logistical activity. This operation is complex due to the status of the concession agreement.

The adjusted EBITDA margin for the railroad segment contracted significantly in 3Q25, falling 920 basis points to 3.4% from 12.6% a year prior. Transported volumes saw a slight improvement, largely due to increased granite aggregate shipments. As of December 31, 2023, the assets and liabilities recorded related to the concession were Ps. 12,451 million and Ps. 9,691 million, respectively. Ferrosur Roca S.A. employed 1,077 individuals as of December 31, 2023.

Managing costs, like reducing thermal energy and maintenance expenses

Controlling operational costs is critical, especially given inflationary pressures and weaker top-line performance in 3Q25. The company successfully implemented cost-saving measures across key inputs.

Cost on a per ton basis, excluding depreciations, declined by 6.5%. Selling, General, and Administrative (SG&A) expenses decreased by 11.7% in 3Q25. Lower thermal energy contracts and reduced maintenance expenses were cited as supporting factors for margins. For the first quarter of 2025, financial expenses saw a sharp drop of 77.0% year-over-year, totaling Ps. 8,981 million.

Here's a quick look at the cost control impact:

• Unit Cost per Ton (ex-depreciation) Change: -6.5%
• SG&A Change: -11.7%
• 1Q25 Financial Expenses Change: -77.0%

Investing in capacity expansion and facility upgrades

LOMA focuses on maintaining and improving its operational base. While specific 2025 expansion CAPEX wasn't detailed, capital deployment and product innovation were noted activities.

Capital expenditures in 2Q25 totaled Ps. 15.9 billion. The company completed the issuance of a New Class 5 Corporate Bond in July 2025 for US$113 million, carrying a 2-year tenor and an 8% interest rate, intended for refinancing maturities. A milestone in product delivery was the successful launch of 25-kg cement bags during 2Q25.

Distribution logistics across Argentina

Maintaining nationwide operations requires managing extensive distribution channels to move products from plants to customers. Logistics are heavily influenced by the performance of the integrated railway network.

The ongoing disruption of the railway line in Bahía Blanca continued to affect longer-haul traffic, impacting ton-kilometer transported and revenue generation in 3Q25. The company has established distribution channels supported by strategically located plants. Consolidated net sales revenues for 3Q25 reached Ps. 209,272 million (or US$ 154 million).

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) - Canvas Business Model: Key Resources

The foundation of Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA)'s business model rests on several tangible and intangible assets that secure its market position.

Market Dominance and Scale

LOMA is the leading cement producer in Argentina. This position is quantified by its market share, which is reported to be close to 45%.

Physical Assets and Reserves

The company's operational backbone includes its access to raw materials and the geographic spread of its production facilities. Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) is supported by vast limestone reserves. The company operates nine plants across the country. The L'Amalí plant in Olavarria, Province of Buenos Aires, serves as the main production facility.

The distribution of these production assets is strategic:

• Six plants are located in the province of Buenos Aires.
• The remaining plants are situated in Neuquén, San Juan, and Catamarca.

The company has also announced investment in new capacity, such as a planned US$250 million investment for a new cement plant in Pocito, San Juan, intended to have a production capacity of 1 million tons per annum (Mta) of cement.

Logistics and Distribution Network

An integrated railway network is a key resource for efficient logistics, complementing the established distribution channels. The company operates within the Rail services segment, providing rail transportation services. This capability is critical for moving bulk materials across Argentina.

Brand Equity and Intangible Assets

LOMA benefits from strong brand equity, distinguishing it as one of the Argentine companies with the greatest public recognition, built on more than 95 years of experience. The company markets its products under several established brand names:

The company also offers specialized services, including rail services and treating/recycling industrial waste for use as fuel and raw material.

Energy Resources

The company has integrated renewable energy sources into its operations. For the three-month period ended September 30, 2025 (3Q25), the Consolidated Adjusted EBITDA margin stood at 20.8%. In the second quarter of 2025 (2Q25), cost of sales declined by 10.7% on a per ton basis, supported by lower energy input prices.

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) - Canvas Business Model: Value Propositions

You're looking at the core strengths Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) offers its customers, which are deeply rooted in its operational structure as of late 2025.

Vertically-integrated supply chain for cost control

Loma Negra Compañía Industrial Argentina Sociedad Anónima is a vertically-integrated cement and concrete company, supported by vast limestone reserves and strategically located plants. This integration is a key lever for cost discipline, even when facing margin pressure. For instance, in Q2 2025, management pointed to cost management as helping to offset softer pricing in the Cement segment, which saw revenue drop by 5.5% year-over-year despite an 11.1% volume recovery. Furthermore, the company is actively investing in future cost and environmental advantages, committing $78.4 million to green cement technologies, targeting a 22% reduction in carbon emissions by 2025, which strengthens its bid competitiveness in public tenders. The company operates with a capacity of 12.1 Mt/a from 4 integrated plants and 3 grinding units.

Comprehensive product portfolio: cement, concrete, aggregates

Loma Negra Compañía Industrial Argentina Sociedad Anónima offers a full suite of construction materials, which allows it to capture value across different stages of a project. While the core Cement, masonry & lime segment saw sales volumes decrease by 5.4% year-over-year in 3Q25 to 1.37 million tons, the downstream and complementary segments showed significant volume momentum, indicating strong demand in specific construction niches. The company's ability to service these diverse needs is a core value proposition, as shown in the third quarter performance:

The Concrete segment's 37.8% volume surge in 3Q25 highlights its importance in capturing immediate construction activity.

Reliability and scale for large public and private projects

The scale of Loma Negra Compañía Industrial Argentina Sociedad Anónima, being the leading cement producer in Argentina, provides the necessary assurance for large-scale, long-term commitments. This scale is critical when executing projects that require massive, consistent material supply. The company's operational footprint includes its L'Amalo plant in the Buenos Aires region, which has a capacity of 6.0 Mt/a, making it one of the largest and most modern in Latin America. The growth in bulk cement dispatches in 3Q25, supported by activity in mining projects and public works, confirms its role as a reliable supplier for major infrastructure players.

Strong brand loyalty and established quality reputation

A top-of-mind brand status translates directly into customer preference, even when facing competitive pricing dynamics. Loma Negra Compañía Industrial Argentina Sociedad Anónima is betting on this reputation to achieve specific market penetration goals by the end of 2025. The management's targets reflect confidence in its established quality perception:

• Target market share in residential construction: 47.3%
• Target market share in commercial construction: 44.6%
• Target market share in infrastructure: 40.9%

The company's market leadership in cement, standing at 42.7% share as of 2023, provides a strong base for achieving these 2025 goals.

Infrastructure solutions enabling urban and family development

The demand for Loma Negra Compañía Industrial Argentina Sociedad Anónima's products is directly tied to the physical development of the country. You see this value proposition realized in the strong volume growth of the ready-mix concrete and aggregates businesses, which are essential for building roads, logistics hubs, and housing. For example, in 3Q25, Concrete volumes grew by 37.8% year-over-year, primarily driven by private logistics infrastructure and residential construction in the Buenos Aires metropolitan area and Santa Fe province. Similarly, the 26.3% year-over-year growth in Aggregates was fueled by sustained demand from road construction and railroad projects. This activity reflects the company's essential role in enabling both urban expansion and family housing projects. Finance: draft 13-week cash view by Friday.

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) - Canvas Business Model: Customer Relationships

You're looking at how Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) connects with and serves its varied customer base, which spans from large infrastructure players to retail buyers. The relationship strategy centers on direct service channels and specialized support.

Dedicated technical consulting and support center

LOMA maintains a dedicated Consulting and Technical Center to help customers with product application and technical needs. While specific utilization rates aren't public, this center supports the core business, which saw Cement, masonry, and lime sales volumes reach 1.37 million tons in the third quarter of 2025. The company also provides a direct contact line, listing the number 0800-555-1-555.

Direct sales and delivery services (Loma Atiende)

The direct sales and delivery arm, branded as Loma Atiende, is a key touchpoint for customer fulfillment. This channel supports the company's overall dispatch performance, which saw sales volumes of cement, masonry, and lime increase by 8.9% year-over-year in the first quarter of 2025, reaching 1.15 million tons. The focus on direct service is crucial for segments like Concrete, where volumes grew by 37.8% year-over-year in 3Q25, driven by private logistics and residential construction.

High brand loyalty, especially in the retail segment

Brand recognition is a long-standing asset for Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA), particularly in the retail space served by bagged cement. In the first quarter of 2025, bagged cement dispatches showed strong uptake, growing 12% year-over-year. The company has set market share targets for 2025 across key areas, reflecting confidence in its brand strength and market penetration:

• Retail/Residential Construction Market Share Target: 47.3%
• Commercial Market Share Target: 44.6%
• Infrastructure Market Share Target: 40.9%

Digital platform (LomaNet) for customer interaction

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) uses its digital platform, LomaNet, as a channel for customer interaction, alongside its Delivery Services. While specific active user counts aren't available, digital engagement supports the overall sales structure, which saw total net sales revenues reach Ps. 209,272 million (US$ 154 million) in the third quarter of 2025.

Long-term relationships with key industrial and construction clients

Sustained relationships with large industrial and construction clients underpin the performance of the company's non-cement segments. These relationships are evidenced by significant volume increases in specialized areas:

The growth in the Aggregates segment, up 26.3% in 3Q25, was driven by sustained demand from road construction and railroad projects, indicating strong ties with infrastructure partners. Similarly, the 37.8% volume increase in Concrete was supported by private logistics infrastructure and public works activity.

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) - Canvas Business Model: Channels

You're looking at how Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) gets its product-cement, lime, concrete, and aggregates-to the customer base, which is a mix of large industrial players and smaller construction needs. The channels are quite diverse, reflecting their position as the principal actor of the construction industry in Argentina.

Extensive network of points of sale and distributors

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) relies heavily on its established retail footprint. While the exact number of points of sale isn't explicitly stated for late 2025, the company lists 'Points of sale' as a key customer interface on its corporate site, suggesting a broad reach across the country. This network supports smaller volume sales and retail demand.

Direct bulk dispatches to large construction sites

For major projects, Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) uses direct bulk delivery. This channel is critical for the cement segment. For context, in 2022, the bulk segment reached 42% of total dispatch, driven by concrete demand and infrastructure works. The Cement, masonry & lime segment saw its volumes improve by 11.1% year-over-year in 2Q25, which would largely flow through bulk and bagged channels.

Company-owned railway for internal and external transport

Logistics are anchored by the Ferrosur Roca freight railway network, which Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) indirectly controls through its subsidiary Ferrosur Roca S.A. (in which it holds an 80.00% equity interest). As of December 31, 2023, the concession covers 3,100 kilometers, with approximately 2,000 kilometers currently operational. This network connects directly to five of the company's plants. The Railroad segment revenue decreased by 8.6% year-over-year in 2Q25, even though the company charges third parties freight railway fees to ship their goods over this infrastructure.

Online platform (LomaNet) for orders and services

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) uses its digital channel, 'LomaNet,' for orders and services. This platform is listed alongside 'Loma Atiende' and 'Delivery Services' as a dedicated customer interface. Specific usage metrics for LomaNet in 2025 aren't public, but its inclusion signals a move to digitize order placement, which is key for efficiency.

Direct sales team for industrial and corporate clients

A direct sales approach targets industrial and corporate clients for larger, consistent volume contracts. This team manages relationships for the Concrete segment, which saw volumes improve by a significant 44.0% year-over-year in 2Q25. The company's overall Net revenues reached Ps. 174.5 billion (US$ 149 million) in 2Q25, with the Cement, masonry & lime segment contributing to the top line despite softer pricing.

Here's a quick look at the financial context related to these channels in the first half of 2025:

The company's operational reach is supported by its physical assets. You can see the scale of the railway asset below:

• Railway Concession Distance: 3,100 kilometers.
• Operational Railway Kilometers (as of 12/31/2023): Approximately 2,000 kilometers.
• Plants Directly Connected to Rail: Five.
• Equity Interest in Rail Operator (Ferrosur Roca S.A.): 80.00%.

If onboarding takes 14+ days, churn risk rises, and for Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA), slow delivery through any channel-especially bulk-can stall major projects. Finance: draft 13-week cash view by Friday.

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) - Canvas Business Model: Customer Segments

You're looking at the core demand drivers for Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) based on the latest reported figures through the third quarter of 2025.

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) has specific targets for its market share across key construction areas by the end of 2025:

• Target market share in residential construction: 47.3%
• Target market share in commercial construction: 44.6%
• Target market share in infrastructure: 40.9%

The overall Argentine economy provided a backdrop of 5.8% GDP growth in the first quarter of 2025, with the industry expecting double-digit growth for the year.

Large public infrastructure projects (roads, bridges)

This segment is a key driver for bulk cement and aggregates. Provincial level public works began to gain momentum, adding volume to the dispatch mode in the third quarter of 2025. Aggregates segment volumes showed strong growth, up 26.3% year-over-year in the third quarter of 2025, driven by sustained demand from road construction and railroad projects.

Private residential and commercial real estate developers

This demand primarily impacts bagged cement, though bulk cement also supports larger housing developments. In the first quarter of 2025, bagged cement dispatches grew 12% year-over-year. However, this trend reversed in the third quarter of 2025, where bagged cement dispatches were more affected by the economic slowdown, declining 11.8% during the quarter. The Concrete segment, which supports private developments, saw volumes increase 37.8% year-over-year in the third quarter of 2025.

Industrial construction and mining projects (bulk cement)

Bulk cement dispatches showed the best dynamics in the third quarter of 2025, reaching 44% of total industry dispatches. This performance was supported by industrial and commercial projects. In contrast, bulk cement activity ended 2024 at low levels due to the halt in public works and major private projects.

Retail consumers and small builders (bagged cement)

Bagged cement is the format most tied to retail and residential demand. While it was the best-performing dispatch format in the first quarter of 2025, growing 12% year-over-year, it faced pressure in the third quarter of 2025, declining 11.8% year-over-year.

Other companies utilizing rail services (grains, aggregates)

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) also serves third parties through its rail services. The railroad segment's volume declined by 13.4% in 2024. However, the significant increase in transported volumes of grains and frac sand helped offset the drop in construction materials and chemicals that year. In the second quarter of 2025, railroad segment volumes were up 10.6%. The concrete segment's Adjusted EBITDA margin in the third quarter of 2025 was negative at -6.8%.

Here's a quick look at the volume performance across the main segments for the first three quarters of 2025:

The Cement, Masonry, and Lime segment generated net revenues of Ps. 163,151 million (US$ 149 million) in the first quarter of 2025, and Ps. 209,272 million (US$ 154 million) in the third quarter of 2025.

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) - Canvas Business Model: Cost Structure

You're looking at the core expenditures that keep Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) running, which are heavily weighted toward fixed assets and essential inputs. The cost structure is defined by the scale of its operations across cement, concrete, and its captive railway.

High fixed costs from operating plants and railway infrastructure represent a major component of the overall expenditure base. Maintaining this extensive physical footprint, especially the railway infrastructure used for logistics, requires consistent, non-negotiable spending regardless of immediate sales volume fluctuations. This is a classic characteristic of heavy industry.

Also critical are the significant raw material and energy procurement costs. While Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) has managed to benefit from certain cost controls, such as lower maintenance expenses and improved energy contracts in Q2 2025, these inputs remain a substantial variable cost driver. The company continues to focus on operational agility, evidenced by a reported $\text{0.8\%}$ cost reduction in the Cement segment year-over-year in Q2 2025, despite softer pricing dynamics.

The direct cost of production is quantified by the Cost of sales, which was $\text{Ps. 138,917}$ million in Q2 2025. This figure was reported as remaining nearly flat year-over-year, which is a notable achievement given the inflationary environment in Argentina.

Personnel and overhead costs also factor in. Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) supports its operations with $\text{2,821}$ total employees. The Selling, General & Administrative (SG&A) expenses saw an increase, rising by $\text{5.3\%}$ year-over-year in Q2 2025, driven mainly by higher salary and insurance costs. As a percentage of sales for that quarter, SG&A reached $\text{10.7\%}$.

Finally, capital expenditures translate directly into non-cash expenses through depreciation. Significant investments, such as the project to adjust cement bags to the $\text{25-kilogram}$ format, which required $\text{Ps. 11,324}$ million in investing activities in 1Q25, will impact future cost structures via depreciation charges. For context on the scale of depreciation, the figure for the fourth quarter of 2024 was $\text{(Ps. 14,587}$ million), and for the full fiscal year 2024, it totaled $\text{(Ps. 70,101}$ million).

Here is a quick summary of the key financial metrics related to costs from the recent reporting periods:

The company's cost management efforts are clearly visible in the flat Cost of Sales, but you must watch how the depreciation from recent capital expenditures, like the $\text{25-kilogram}$ bag compliance, will flow through the income statement in the coming quarters. Finance: draft 13-week cash view by Friday.

Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) - Canvas Business Model: Revenue Streams

You're looking at how Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA) actually brings in the money, which is pretty straightforward given its core business in construction materials. The top line for the third quarter of 2025 showed net revenues hitting Ps. 209.3 billion, which translated to about US$ 154 million for that period, representing a 12.1% drop year-over-year. Still, the Trailing Twelve Months (TTM) Revenue as of September 2025 was reported at US$ 562 million, giving you a broader view of the annual run rate.

Honestly, the revenue generation is heavily concentrated in a few key areas, which is typical for a vertically-integrated player like Loma Negra Compañía Industrial Argentina Sociedad Anónima (LOMA). Here are the main ways the cash comes in:

• Sales of Cement, masonry cement, and lime (primary revenue source)
• Sales of Concrete and Aggregates
• Revenue from Rail services (Ferrosur Roca)

The performance across these segments in the latter half of 2025 tells a story of volume recovery battling soft pricing. For instance, in Q3 2025, the cement, masonry, and lime segment saw revenues decline 13.2% year-over-year, even though volumes only contracted by 5.4%; that gap is all about pricing pressure. Let's look at the segment performance side-by-side to see the dynamics:

The rail services segment, which is a key part of the integrated model, faced headwinds in Q3 2025, with revenues dropping 14.9% despite some volume increases in specific cargo types. The profitability there also squeezed, as the adjusted EBITDA margin for the railroad segment contracted 920 basis points to 3.4% from 12.6% a year prior. Meanwhile, the Concrete and Aggregates businesses showed better volume resilience, with Concrete volumes up 44.0% in Q2 2025, though revenue was still down 1.1% that quarter. You have to watch that pricing environment closely; it's defintely the swing factor right now.