Financial Data and Key Metrics Changes - Revenues increased by 4.8% year over year, reaching $499.2 million, driven by stronger demand for bagged cement and concrete [3][10] - Consolidated EBITDA rose to $134.7 million, a 1.4% increase compared to the same period last year [3][10] - Net profit increased by 6.5% year over year, attributed to higher revenues and gross profit, along with a slight reduction in financing expenses [14] Business Line Data and Key Metrics Changes - Sales of concrete, pavement, and mortar surged by 22.3% year over year, primarily due to major infrastructure projects [4][12] - Cement sales increased by 3.9% compared to the same period last year, with gross margin rising by 2.6% due to lower raw material costs [12] - Precast material sales grew by 6.8%, although gross margin decreased by 1.8 percentage points due to lower fixed cost dilution [13] Market Data and Key Metrics Changes - The company is positioned as a preferred choice for infrastructure development in Northern Peru, with ongoing projects like the Motupe riverbank defenses and the Tarata Bridge [4][6] - The demand for concrete is expected to increase in the coming quarters due to the initiation of new projects [25] Company Strategy and Development Direction - The company is focused on a long-term strategy to expand the use of concrete and building solutions, which is seen as essential for future growth [5][38] - A decarbonization strategy is being implemented, with a focus on reducing coal usage and exploring cleaner alternatives like biomass [6][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining positive momentum for the rest of the year, despite challenges faced in the first quarter [3][14] - The company anticipates stable EBITDA margins moving forward, with a one-time expense related to labor union bonuses not expected to recur [21][22] Other Important Information - Administrative expenses increased by 22.4% due to personnel expenses related to union bonuses [11] - The net debt to EBITDA ratio improved to 2.6x, indicating ongoing deleveraging efforts [14] Q&A Session Summary Question: Is it worth continuing the sales of concrete pavements, precast, and construction supplies when you barely make any money on it? - Management emphasized that the overall company strategy focuses on building solutions, which is crucial for maintaining market presence despite lower margins in some projects [17][18] Question: Should we expect a similar year-over-year increase in SG&A in the coming quarters? - Management clarified that the recent increase in SG&A was a one-time expense and that EBITDA margins should remain stable for the rest of the year [21][22] Question: Do you expect to maintain this level of concrete volumes for the whole of 2025? - Management indicated that concrete volumes are expected to increase for the remainder of the year due to new projects starting [25] Question: Will dividends be considered as a capital allocation avenue going forward? - Management confirmed a solid dividend policy will be maintained while also focusing on reducing debt [28][29] Question: Will the production and sale of lime continue to be reported? - Management stated that lime production will continue, although it may not be reported due to its materiality [30] Question: Do you expect the trend of recovery in dispatches to continue? - Management affirmed that they expect to see continued growth in dispatches and concrete volumes throughout the year [35]

Financial Position - As of December 31, 2024, total assets decreased to S/3,166,043, down from S/3,221,735 in 2023, reflecting a decline of approximately 1.7%[30] - Current assets remained stable at S/992,496, slightly increasing from S/992,249 in 2023[30] - Total liabilities decreased to S/1,952,945, down from S/2,031,727 in 2023, representing a reduction of about 3.9%[30] - The company reported a total equity of S/1,213,098, an increase from S/1,190,008 in 2023, reflecting a growth of approximately 1.9%[30] - Cash and cash equivalents decreased to S/72,723 from S/90,193 in 2023, a decline of about 19.4%[30] - The Group's total assets in US dollars amounted to US$11,490,000 in 2024, up from US$9,146,000 in 2023[145] - The net book value of property, plant, and equipment as of December 31, 2024, is S/2,031,139,000, reflecting a decrease from S/2,099,351,000 in 2023[158] Profitability - Sales of goods for 2024 reached S/(000) 1,978,071, a slight increase of 1.4% compared to S/(000) 1,950,075 in 2023, but a decrease of 6.5% from S/(000) 2,115,746 in 2022[31] - Gross profit for 2024 was S/(000) 728,526, representing a 5.7% increase from S/(000) 689,452 in 2023 and a 11.7% increase from S/(000) 652,031 in 2022[31] - Operating profit improved to S/(000) 391,033 in 2024, up 15.7% from S/(000) 337,555 in 2023, but down 1.2% from S/(000) 355,318 in 2022[31] - Profit for the year increased to S/(000) 198,875 in 2024, a rise of 17.7% compared to S/(000) 168,900 in 2023, and a 12.5% increase from S/(000) 176,828 in 2022[32] - Basic earnings per share rose to S 0.46 in 2024, up from S 0.39 in 2023 and S 0.41 in 2022, reflecting a 17.9% increase year-over-year[31] Cash Flow - Net cash flows from operating activities for 2024 were S/(000) 321,141, a decrease of 22.1% from S/(000) 412,323 in 2023, but a significant increase from S/(000) 111,819 in 2022[36] Expenses - The company’s total operating expenses decreased to S/(000) 337,493 in 2024, down from S/(000) 351,897 in 2023, reflecting a reduction of 4.1%[31] - The company’s finance costs for 2024 were S/(000) 100,308, a decrease of 3.5% from S/(000) 104,045 in 2023[31] - Administrative expenses for 2024 totaled S/253,383,000, up from S/231,967,000 in 2023, reflecting an increase of approximately 9.2%[198] - Selling and distribution expenses rose to S/81,410,000 in 2024, compared to S/69,569,000 in 2023, marking an increase of around 17.0%[199] - Employee benefits expenses for 2024 were S/338,921,000, which is an increase from S/292,032,000 in 2023, representing a growth of approximately 16.1%[200] Taxation - The income tax expense for 2024 was calculated at an effective rate of 33%, totaling S/97,312,000, compared to S/76,808,000 in 2023[187] - The Company has tax loss carryforwards amounting to S/92,998,000 as of December 31, 2024, up from S/44,868,000 in 2023[188] Assets and Liabilities - The total carrying amount of trade and other accounts receivable is S/135,114,000, with an expected credit loss of S/11,486,000, representing an 8.5% expected credit loss rate[155] - The total inventory as of December 31, 2024, amounts to S/773,997,000, with a provision for inventory obsolescence of S/33,880,000[156] - Trade receivables increased to S/95,419,000 in 2024 from S/83,840,000 in 2023, indicating a growth of approximately 13.5%[148] - The allowance for expected credit losses rose to S/20,520,000 in 2024 from S/18,048,000 in 2023, reflecting an increase of 8.2%[153] - Trade payables decreased to S/(000) 96,549 in 2024 from S/(000) 107,327 in 2023, representing a decline of approximately 10.5%[164] Corporate Governance - The Company has complied with all financial covenants as of December 31, 2024, and 2023, without any activation of covenants due to non-compliance[181] - The Company maintained a fixed charge covenant ratio of at least 2.5 to 1 and a consolidated debt-to-EBITDA ratio of no greater than 3.5 to 1[182] Investments and Acquisitions - The Group acquired coal concessions in January 2023 for S/34,350,000, enhancing its exploration activities in areas of interest to the cement business[161] Dividends - Declared dividends per share for 2024 remained at S/.0.41000, consistent with 2023, while total declared dividends amounted to S/175,524,000[193]

Group 1 - The company's margins expanded during the year and quarter due to higher utilization of concrete projects [1] - The company announced more large infrastructure projects starting from FY25 in 3Q24, with confirmations expected in 4Q24 [1] Group 2 - The focus of the analysis is on operational aspects and long-term earnings power of companies rather than market-driven dynamics [1] - The investment strategy emphasizes holding companies independently of future price movements, with most calls being holds [1]

Group 1 - The conference call for Cementos Pacasmayo S.A.A. (NYSE:CPAC) Q4 2024 earnings took place on February 14, 2025, at 9:00 AM ET [1] - Key participants included CEO Humberto Nadal, CFO Manuel Ferreyros, and Investor Relations Manager Claudia Bustamante [3] - The call was structured to begin with an overview from the CEO, followed by financial commentary from the CFO, and concluded with a Q&A session [3] Group 2 - The company emphasized the importance of strategic outlook for both the short and medium term during the call [3] - Forward-looking statements were mentioned, indicating that expectations and projections are subject to risks and uncertainties [4]

Financial Data and Key Metrics Changes - In Q4 2024, revenue increased by 3% year-over-year, reaching PEN 526.7 million, while gross profit decreased by 2.1% due to higher costs related to the Piura airport project [19][20] - For the full year 2024, revenues increased by 1.4%, and consolidated EBITDA reached a record PEN 549.3 million with an EBITDA margin of 27.8% [8][20] - The net profit increased by 39.3% in Q4 and by 17.8% for the entire year compared to the previous year [27] Business Line Data and Key Metrics Changes - Cement sales increased by 1.8% in Q4 2024 compared to the same period in 2023, while for the full year, cement sales decreased by 2.2% due to lower demand from the self-construction segment [22][23] - Concrete payments and mortar sales surged by 30.9% and 48.8% for the full year 2024, primarily driven by increased sales volume for the Piura airport project [23] - Precast material sales increased by 18% in 2024 compared to 2023, with gross margin improving by 10.7 percentage points due to higher sales volume [26] Market Data and Key Metrics Changes - The company noted a positive trend in sales volumes for 2025, expecting similar growth rates as seen in Q4 2024 [36] - The company highlighted that 80% of its sales are directed towards self-construction, making employment levels a key indicator for demand [49] Company Strategy and Development Direction - The company is focusing on digital transformation, enhancing operational efficiency through AI and machine learning, and has achieved ISO 27001 certification for information security [10][13] - The company is committed to developing value-added building solutions, with significant projects like the Piura airport reconstruction, which involved direct participation in construction [14][16] - Sustainability remains a core strategy, with the company being the first Peruvian cement company to obtain environmental product declarations for three plants, representing 75% of its portfolio [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving better results in 2025 due to a stronger demand scenario and ongoing strategic initiatives [8][9] - The new Minister of Economics is expected to unlock infrastructure projects, which could further boost demand [51] Other Important Information - The CFO, Manuel Ferreyros, announced his retirement effective March 31, 2025, after a 17-year tenure, with Eli Hayashi set to succeed him [6][27] Q&A Session Summary Question: Expectations for sales volumes in 2025 - Management expects positive trends in sales volumes for 2025, similar to Q4 2024 [36] Question: Details on higher costs and expenses in Q4 - Increased costs were attributed to a larger workforce and higher personnel expenses due to company growth [38] Question: Capital allocation and CapEx forecast for 2025 - Sustaining CapEx is projected to remain around PEN 100 million, with no additional CapEx expected in the coming years [37] Question: Energy cost behavior in 2024 - Energy costs decreased in 2024 compared to 2023 and are expected to remain flat in 2025 [43] Question: Impact of upcoming elections on cement volume recovery - Management does not foresee upcoming elections as a significant risk to volume recovery, although security concerns may affect operations [71] Question: Cost overruns in the Piura airport project - All cost overruns have been accounted for in the results, and no future negative effects on gross margins are expected [72]

Group 1 - Pacasmayo (CPAC) is part of the Construction group, which consists of 88 companies and is currently ranked 8 in the Zacks Sector Rank [2] - Pacasmayo has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook with a 30.6% increase in the consensus estimate for full-year earnings over the past quarter [3] - Year-to-date, Pacasmayo has returned 27.2%, outperforming the average return of 24.7% for Construction companies [4] Group 2 - Pacasmayo operates within the Building Products - Concrete and Aggregates industry, which includes 8 companies and is ranked 174 in the Zacks Industry Rank [5] - The average return for stocks in the Building Products - Concrete and Aggregates industry is 16.6%, indicating that Pacasmayo is performing better than its peers [5] - Emcor Group (EME), another strong performer in the Construction sector, has seen a year-to-date increase of 139.4% and has a Zacks Rank of 1 (Strong Buy) [4][5] Group 3 - The Building Products - Heavy Construction industry, to which Emcor Group belongs, is ranked 36 and has increased by 104.9% this year [6] - Investors should monitor both Pacasmayo and Emcor Group for potential continued strong performance in the Construction sector [6]

Group 1 - The investment strategy focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective, rather than market-driven dynamics [1] - The articles emphasize understanding the long-term earnings power of companies and the competitive dynamics within their industries [1] - The majority of recommendations will be holds, indicating a cautious approach to market conditions and a belief that only a small fraction of companies are suitable for buying at any given time [1] Group 2 - The articles aim to provide important information for future investors and introduce a healthy skepticism towards a generally bullish market [1] - There is a clear distinction made between the author's opinions and professional investment advice, highlighting the need for readers to conduct their own due diligence [2][3]

Financial Data and Key Metrics Changes - The company achieved a record consolidated EBITDA of PEN154.6 million, an increase of almost 20% year-over-year, and a net income increase of 35.9% [6][24] - Revenues increased by 0.2% compared to Q3 2023, reaching PEN517.8 million, while gross profit increased by 12.1% due to cost efficiencies [16][17] - The EBITDA margin was 29.9%, reflecting a 5 percentage point increase compared to the same period in 2023 [17] Business Line Data and Key Metrics Changes - Cement sales decreased by 2.7% in Q3 2024 and 3.6% for the first nine months of the year compared to the same periods in 2023, primarily due to decreased demand from the self-construction segment [19] - Sales of concrete, pavement, and mortar increased by 25.6% in Q3 and 57.9% in the first nine months, driven by increased sales volume for the Piura airport project [21] - Precast materials sales increased by 10.4% in Q3 and 31% in the first nine months compared to the same periods in 2023, mainly due to public sector demand [23] Market Data and Key Metrics Changes - The company noted a slight decrease in demand overall, but government spending is expected to improve market conditions in the second half of the year [5][28] - The self-construction segment is anticipated to grow due to improved employment in fishing and agriculture, which are significant drivers for cement demand [33] Company Strategy and Development Direction - The company is focusing on operational efficiencies and cost optimization, particularly in clinker production and raw material costs [6][20] - New projects include innovative solutions for riverbank protection and collaboration on a water treatment plant, showcasing the company's commitment to sustainability and client-centric solutions [7][10] - The company is adopting artificial intelligence and machine learning to enhance operational efficiency and has seen high employee engagement in these initiatives [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about increased cement volumes in 2025, driven by ongoing public projects and government spending [28][32] - The company expects EBITDA margins to remain around 29% for the upcoming year, supported by operational efficiencies [29][35] - Management highlighted the importance of balancing environmental sustainability with economic development, particularly in the context of carbon neutrality initiatives [39][40] Other Important Information - Administrative expenses increased by 15.4% in Q3 2024, primarily due to higher personnel costs and IT-related expenses [18] - The net debt-to-EBITDA ratio improved to 2.8x, indicating better financial health [24] Q&A Session Summary Question: What are the expectations for cement volumes in Peru for 2025? - Management anticipates an increase in volumes compared to 2024, supported by government spending and public projects [28][32] Question: Can the company sustain margins around 30%? - Management believes that operational efficiencies will help maintain margins close to 30% going forward [29] Question: How will the new Yanacocha project impact concrete dispatches? - The Yanacocha project will last approximately 18 months and is expected to have a similar volume to the Piura airport project [31] Question: What are the drivers for growth in self-construction? - Key drivers include improved employment in fishing and agriculture, which are expected to boost cement demand [33] Question: What is the guidance for margins in the upcoming year? - Management expects EBITDA margins for the whole year to be slightly over 29% [35] Question: What has driven the improvement in gross margins this quarter? - The main drivers include ongoing operational efficiencies and favorable coal prices [36] Question: What are the long-term expected margins for concrete and prefabricated products? - Long-term margins will depend on the size of projects, with larger projects expected to yield higher profitability [37]

Financial Performance - For the three-month period ended September 30, 2024, sales of goods reached S/517,754, a slight increase from S/516,664 in the same period of 2023, reflecting a growth of 0.2%[13] - Gross profit for the three-month period ended September 30, 2024, was S/195,756, compared to S/174,639 in the same period of 2023, indicating an increase of 12.1%[13] - Operating profit for the three-month period ended September 30, 2024, rose to S/116,473, up from S/91,561 in the same period of 2023, marking a significant increase of 27.2%[13] - Profit for the period for the three months ended September 30, 2024, was S/62,539, compared to S/46,115 in the same period of 2023, representing a growth of 35.7%[14] - Total comprehensive income for the period of S/62,410 for the three months ended September 30, 2024, compared to S/46,115 in the same period of 2023, an increase of 35.4%[18] - For the nine-month period ended September 30, 2024, the Group recorded total revenue from external customers of S/1,451,399,000, an increase from S/1,438,698,000 in the same period of 2023[74] - The net profit attributable to ordinary equity holders for the nine-month period ended September 30, 2024, was S/148,795,000, compared to S/133,041,000 for the same period in 2023[84] - Profit before income tax for the nine-month period ended September 30, 2024, was S/218,930,000, up from S/190,152,000 in 2023, indicating a growth of 15.1%[118] - The company reported a profit for the year of S/148,795,000 for the nine-month period ended September 30, 2024, compared to S/133,041,000 in 2023, representing an increase of 11.8%[118] Assets and Liabilities - As of September 30, 2024, total assets increased to S/3,289,380, up from S/3,221,735 as of December 31, 2023, representing a growth of 2.1%[11] - Total current liabilities increased to S/716,879 as of September 30, 2024, from S/689,388 as of December 31, 2023, reflecting a rise of 4.0%[11] - Total equity increased to S/1,338,607 as of September 30, 2024, compared to S/1,190,008 as of December 31, 2023, indicating a growth of 12.5%[11] - As of September 30, 2024, the Group's total financial assets increased to S/345,313,000 from S/233,527,000 in 2023, representing a growth of approximately 47.7%[91] - The Group's total financial liabilities decreased to S/1,756,001,000 in 2024 from S/1,804,537,000 in 2023, a reduction of about 2.7%[91] - The company’s financial obligations as of September 30, 2024, amounted to S/1,499,746,000, with a notable increase in obligations due in 3 to 12 months[132] Cash Flow and Investments - Cash flows from operating activities for the three-month period ended September 30, 2024, amounted to S/(000) 137,248, down from S/(000) 247,857 in the same period of 2023[22] - The company reported a net cash flow used in investing activities of S/(000) (44,299) for the three-month period ended September 30, 2024, compared to S/(000) (97,128) in the same period of 2023[24] - The company’s cash and cash equivalents increased to S/139,536 as of September 30, 2024, from S/90,193 as of December 31, 2023, reflecting a growth of 54.7%[11] - Cash and cash equivalents at the end of the period on September 30, 2024, were S/(000) 139,536, down from S/(000) 177,124 at the end of the same period in 2023[24] Shareholder Information - Earnings per share for the three-month period ended September 30, 2024, was S/0.15, up from S/0.11 in the same period of 2023, representing a growth of 36.4%[14] - The company paid dividends of S/(000) 141 during the three-month period ended September 30, 2024, compared to S/(000) 127 in the same period of 2023[24] - As of September 30, 2024, dividends payable amounted to S/10,193,000, slightly down from S/10,322,000 as of December 31, 2023[59] Operational Metrics - The company incurred depreciation and amortization expenses of S/(000) 38,103 for the three-month period ended September 30, 2024, slightly up from S/(000) 37,377 in the same period of 2023[22] - Additions to property, plant, and equipment for the nine-month period ended September 30, 2024, amounted to S/38,744,000, a decrease from S/241,178,000 for the same period in 2023[56] - The Group sold assets with a net book value of S/757,000 during the nine-month period ended September 30, 2024, resulting in a net gain on disposal of S/3,557,000[57] Risk Management - The company is exposed to foreign currency risk, with a potential impact on consolidated profit before tax of S/(1,376,000) for a 5% increase in the US dollar exchange rate[129] - The liquidity planning tool is utilized to monitor the risk of fund shortages, ensuring continuity of funding and flexibility[130] Taxation - The total income tax expense for the nine-month period ended September 30, 2024, was S/70,135,000, compared to S/57,111,000 for the same period in 2023[71] - The Group's income tax rate remains at 29.5% of taxable profit after deductions, consistent with the previous year[104] Employee Compensation - The company’s total short-term compensation expense for key management personnel was S/19,820,000 for the nine-month period ended September 30, 2024[80]

alvarez 2Q24 trends in place Perspectives are a little better This means Pacasmayo could eventually return to a modest volume growth level in 2H24, which is necessary to offset the reduction in concrete once the Piura airport project is finished. Pacasmayo's TTM revenues amount to close to $510 million and decreasing, plus an EBITDA margin of close to 26%. This represents an EBITDA of $132.5 million. The context cannot be considered positive, although it is not fully negative as the company's sales are push ...