Core Viewpoint - The Shandong Provincial Department of Industry and Information Technology, along with five other departments, has issued the "Shandong Province Red Mud Comprehensive Utilization Action Plan" to promote the reduction, control, and utilization of red mud, aiming for a comprehensive utilization rate of over 18% by 2027 [1][2]. Group 1: Red Mud Management - Red mud is a key industrial waste generated during alumina production, and Shandong is a major alumina production province with significant red mud generation and storage challenges [1]. - The plan emphasizes a lifecycle management system covering "generation—transportation—utilization—disposal" with a focus on "reduction, resource utilization, and harmlessness" [1]. Group 2: Technological Advancements - The plan encourages alumina production companies to enhance technological upgrades, utilizing big data and artificial intelligence for green and intelligent transformations [1]. - Establishing intelligent production systems with functions for process optimization, dynamic scheduling, and energy consumption management is a key objective [1]. Group 3: Utilization Pathways - Shandong will optimize the "low-cost selection of metal elements from red mud + roadbed, building materials, permeable bricks, and road slope protection" model to expand the scale of existing utilization pathways [2]. - Cities like Zibo, Yantai, Liaocheng, and Binzhou are encouraged to produce various products from red mud, including sintered bricks, non-fired bricks, and permeable bricks, while also exploring its use in construction materials and chemical products [2].

Financial Data and Key Metrics Changes - Sales volume increased by 7.1% year over year, driven by stronger demand for cement and concrete, particularly for infrastructure projects [4] - Consolidated EBITDA reached $130.2 million, a 9% increase compared to the same period last year, despite rising expenses from collective bargaining negotiations [4][11] - Revenues for the quarter increased by 5.9% year over year, totaling $484.1 million, with gross profit rising by 11.2% [11] - Net profit surged by 29.9% this quarter compared to the same period last year, attributed to increased revenues and reduced financing expenses [16] Business Line Data and Key Metrics Changes - Cement sales rose by 6.3% this quarter compared to the same period last year, with gross margin increasing by 3.2 percentage points [14] - Concrete, pavement, and mortar sales increased by 9.8% this quarter, driven by projects like the Piura Airport, although gross margin decreased by 3.2 percentage points due to project execution costs [15] - Precast materials sales grew by 4.1% this quarter, with a gross margin decrease of 1.5 percentage points [16] Market Data and Key Metrics Changes - The company is positioned to benefit from ongoing infrastructure projects in Peru, addressing significant infrastructure and housing deficits [5][6] - The introduction of new ports, such as Shanghai, may alter competitive dynamics, particularly affecting areas close to the port [28][29] Company Strategy and Development Direction - The company emphasizes its role in addressing infrastructure challenges in Peru, focusing on delivering high-quality products that enhance quality of life [5][6] - The strategy includes public-private partnerships to finance infrastructure projects, showcasing the benefits of concrete solutions [7][9] - The company remains optimistic about future growth, expecting to maintain a positive trend in sales volumes and profitability [10][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a single-digit growth trend in sales volumes for the second half of the year, contingent on the timely execution of infrastructure projects [21] - The company plans to sustain its capital expenditures at around 100 million soles annually, focusing on maintenance rather than significant capacity increases [22] - Management indicated that EBITDA margins are expected to remain stable between 28-29% [25] Other Important Information - Administrative expenses increased by 13.8% in Q2 2025 compared to Q2 2024, primarily due to higher personnel costs from union bonuses [12] - The net debt to EBITDA ratio stands at 2.6 times, which management considers a comfortable level [17] Q&A Session Summary Question: Expectations for volumes in the second half - Management expects a continuation of the single high-digit growth trend for volumes, dependent on infrastructure project timelines [21] Question: CapEx expectations for the second half - Management indicated sustaining CapEx around 100 million soles annually, with no substantial increases planned [22] Question: Margin expectations for the second half - EBITDA margins are expected to remain stable between 28-29% [25] Question: Dividend distribution expectations for 2025 - Management stated that dividend decisions are made at the board level, with no anticipated changes to the consistent dividend policy [25][26] Question: Impact of CEMEX using Shanghai port on competitive dynamics - Management noted that while new ports may influence market dynamics, the primary impact would be localized to areas near the port [28][29]

Company Overview - Pacasmayo's cement shipments reached 2.9 million MT as of Jun-25 LTM[4] - The company has a combined cement production capacity of 4.9 million MT/year and a combined clinker production capacity of 3.08 million MT/year[16] Financial Performance (2Q25) - Sales of goods reached S/ 484.1 million, a 5.9% increase compared to 2Q24[6] - EBITDA was S/ 130.2 million, a 9.0% increase compared to 2Q24[6] - EBITDA margin was 26.9%, a 0.8 percentage point increase compared to 2Q24[6] Market Overview (Peruvian Cement Market) - Pacasmayo has a 22.9% share in the Peruvian Northern Region with 2.898 million MT of cement shipments as of May-25 LTM[10] - UNACEM holds the largest market share at 42.7% with 5.418 million MT of cement shipments[10] - The Central Region's total cement shipments amounted to 6.509 million MT, representing 51.3% of the total regions[10] - The Southern Region's total cement shipments were 2.627 million MT, accounting for 20.7% of the total regions[10] - Total cement shipments across all regions reached 12.682 million MT[10] Customer Profile - Retail customers represent 75% of the customer base[18, 21, 25] - Private sector customers account for 15% of the customer base[18, 21, 25] - Infrastructure customers make up 10% of the customer base[18, 21, 25]