Cementos Pacasmayo(US:CPAC)2025-04-29 18:30Financial 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 for infrastructure projects [4][11] - Consolidated EBITDA rose to $134.7 million, a 1.4% increase compared to the same period last year, despite higher expenses related to collective bargaining negotiations [4][11] - Net profit increased by 6.5% year over year, attributed to higher revenues and gross profit, along with a slight reduction in financing expenses [15] Business Line Data and Key Metrics Changes - Cement sales increased by 3.9% year over year, primarily due to increased demand [13] - Sales of concrete, pavement, and mortar surged by 22.3% year over year, driven by major infrastructure projects [5][13] - Precast material sales grew by 6.8% compared to the previous year, mainly due to increased sales volume to the public sector [14] Market Data and Key Metrics Changes - The company is experiencing a solid recovery in demand for construction materials, particularly in Northern Peru, where it has positioned itself as a preferred choice for infrastructure development [6][7] - The execution of significant infrastructure projects is expected to secure stable demand moving forward [5][6] Company Strategy and Development Direction - The company is focused on a long-term strategy to expand the use of concrete and related products, emphasizing early involvement in projects and leveraging technology to identify opportunities [6][7] - A decarbonization strategy is being implemented, with a focus on reducing coal usage and exploring cleaner alternatives such as biomass and end-of-life tires [8][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 such as weather impacts on sales [4][5] - The company anticipates an increase in concrete volumes for the remainder of 2025, supported by ongoing infrastructure projects [28] Other Important Information - Administrative expenses increased by 22.4% year over year, primarily due to personnel expenses related to union bonuses [12] - The net debt to EBITDA ratio improved to 2.6x, indicating continued deleveraging efforts [15] 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 justifies the continued sales despite lower margins in some areas [17][19] Question: Should we expect a similar year-over-year increase in SG&A in the coming quarters? - Management clarified that the $9 million external expense is a one-time occurrence, and EBITDA margins should remain stable for the rest of the year [22][25] 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 ongoing projects [28] Question: Will dividends be considered for capital allocation going forward? - Management confirmed a solid dividend policy will be maintained while also focusing on reducing debt [31] 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 as a separate segment due to its materiality [32]