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]
Cementos Pacasmayo(CPAC) - 2024 Q3 - Earnings Call Transcript