Cementos Pacasmayo S.A.A. Q2 2025 Earnings Report

Cementos Pacasmayo S.A.A. EPS Results

• Actual EPS: $0.15
• Consensus EPS: $0.10
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: $0.09

Cementos Pacasmayo S.A.A. Revenue Results

• Actual Revenue: $135.89 million
• Expected Revenue: $132.73 million
• Beat/Miss: Beat by +$3.16 million
• YoY Revenue Growth: N/A

Cementos Pacasmayo S.A.A. Announcement Details

• Quarter: Q2 2025
• Date: 7/21/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, July 22, 2025
• Conference Call Time: 10:00AM ET

Cementos Pacasmayo S.A.A. (NYSE:CPAC), a cement company, produces, distributes, and sells cement and cement-related materials in Peru. It operates through three segments: Cement, Concrete, Mortar and Precast; Quicklime; and Sales of Construction Supplies. The company's cement and concrete products are used in residential and commercial construction, and civil engineering; ready-mix concrete used in construction sites; concrete precast, such as paving units or paver stones for pedestrian walkways, as well as other bricks for partition walls and concrete precast for structural and non-structural uses; and cement-based products. It also produces and distributes quicklime for use in steel, food, fishing, and chemical industries. In addition, the company sells and distributes other construction materials manufactured by third parties, such as steel rebar, plastic pipes, and electrical wires. It offers its products directly to other retailers, private construction companies, and government entities through a network of independent retailers and hardware stores. The company was incorporated in 1949 and is headquartered in Lima, Peru. Cementos Pacasmayo S.A.A. is a subsidiary of Inversiones ASPI S.A.

Cementos Pacasmayo S.A.A. Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Sales volume rose 7.1% year-over-year driven by infrastructure demand, contributing to a 9% increase in consolidated EBITDA to $130.2 million despite wage negotiations.
• Positive Sentiment: Revenues increased 5.9% to $484.1 million while gross profit rose 11.2% and net profit jumped 29.9%, supported by lower financing expenses and a net debt/EBITDA ratio of 2.6×.
• Positive Sentiment: The "Dollars for Pesos" program commitment of over $100 million illustrates strong public-private collaboration, highlighting the durability and value of concrete in resilient infrastructure.
• Negative Sentiment: Operating expenses climbed notably, with administrative costs up 13.8% and selling expenses up 28% year-over-year, largely due to higher union bonuses and promotional spend.
• Neutral Sentiment: Management expects continued mid-to-high single digit volume growth in H2, stable 28–29% EBITDA margins, sustaining CapEx around S/100 million with no major capacity expansions planned.

Presentation

[Operator]

Twenty twenty five Earnings Conference Call. At this time, all participants are in listen only mode. And please note that this call is being recorded. At the conclusion of our prepared remarks, we will conduct a question and answer session. I would now like to introduce the host of today's call, Mrs. Claudia Bustamante, Investor Relations Managing Director. Mrs. Bustamante, you may now begin.

[Claudia Bustamante, Sustainability & IR Manager at Cementos Pacasmayo]

Thank you, Luis. Good morning, everyone. Joining me on the call today is mister Humberto Nadal, our chief executive officer, and miss Eli Hayashi, our chief financial officer. Mister Nadal will begin our call with an overview of the quarter, focusing primarily on our strategic outlook for the short and medium term. Miss Hayashi will then follow with additional commentary on our financial results.

[Claudia Bustamante, Sustainability & IR Manager at Cementos Pacasmayo]

We'll then turn the call over to your questions. Please note that this call will include certain forward looking statements. These statements relate to expectations, beliefs, projections, trends and other matters that are not historical facts and are therefore subject to risks and uncertainties that might affect future events or results. Descriptions of these risks are set forth in the company's regulatory filings. With that, I'd now like to turn the call over to Mr. Stefan.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

Thank you, Claudia. Welcome, everyone, to today's conference call, and thank you for joining us today. I would like to begin with a brief overview of this quarter's results. We saw an extremely solid recovery in sales volume, up 7.1% year over year as a result of stronger demand for cement as well as concrete, mostly for infrastructure related projects. Consolidated EBITDA was $130,200,000 this quarter, a 9% increase when compared to the same period of last year despite the increase in expenses related to our collective bargaining negotiations.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

The performance this quarter reflects our disciplined execution and alignment with our strategic objectives. Turning on to the progress of our strategy, I would like to focus on the steady growth in infrastructure projects this quarter and throughout the year. It is crucial to understand that despite more than three decades of sustained economic growth, Peru still faces a significant infrastructure and housing deficit. As a leading provider of building solutions, we are deeply aware of our role in addressing this challenge by delivering high quality products and services, but more importantly, those that improve the quality of life and habitability of our clients, we are not only supporting infrastructure development, but we are mainly driving economic growth and social inclusion. Cement is more than just a building material.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

It's a synonym for progress. There's no sustainable economic or social development without infrastructure, and we all know that. People need proper access to markets, education, and health services. And all that begins with solid, resilient infrastructure. Dollars for in pesos or Work for Taxes program is an innovative program mechanism that enables private companies to finance funding infrastructure projects in advance of their income tax payments, receiving in exchange tax certificates.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

This is an excellent mechanism to contribute to national development by executing those projects that have already been prioritized by local governments but have not yet been carried out mainly due to limited execution capabilities. This has also proven to be one of the most effective platform for showcasing the benefits of concrete and building solutions in our area of influence. The roads we've we've built, Trogara for Empuerto, have already proven the resilience with stunning severe climate events such as El Nino and Cyclone Yaku. This underlines not only the technical advantage of concrete and proper building techniques, especially in areas prone to heavy rainfall, but also and mostly the long term value of building resilient infrastructure. We are very proud to be among the top five contributors to this program.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

And this year alone, we are committed over a $100,000,000 through it. It's an extremely powerful example of how public private collaboration can accelerate impact. While we demonstrate the quality, durability, and efficiency of our concrete solutions, we also have improved connectivity, unlock economic opportunities, and support regional development. Of course, none, and I wanna stress, none of these achievements would be possible without our people. For the seventh consecutive year, we're recognized as a top ranked cement company in the American Talent Index and ranked nineteenth overall across all industries.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

Talent remains our greatest competitive advantage, our greatest challenge, and this recognition reflects our commitment to attracting and developing the best professionals in the market. We are confident that these positive results are just the beginning and the momentum will continue to build in the coming quarters. We remain extremely optimistic about the future of our country and the future of our market. I will now turn the call over to Elly to go into more detailed financial analysis.

[Ely Adriana Hayashi Hirahoka, CFO and Director - Finance & Cybersecurity at Cementos Pacasmayo]

Thank you, Humberto. Good morning, everyone. This quarter's revenues increased 5.9 percentage compared to the second quarter of twenty twenty four, mainly due to the increase in sales of bagged cement, concrete and pavement, reaching 484,100,000.0. During this same period, gross profit increased 11.2 percentage when compared to the same period of the previous year, mainly due to the increase in cost of raw material on top of the above mentioned higher revenue. Consolidated EBITDA was a 130,200,000 this quarter, a 9% increase when compared to the same period of 2024, mainly due to the previous previously mentioned increased operating income.

[Ely Adriana Hayashi Hirahoka, CFO and Director - Finance & Cybersecurity at Cementos Pacasmayo]

For the first six months of the year, revenues increased 5.3 percentage when compared to the same period of 2024. Gross profit for the first six months of the year increased 8.2 percentage when compared to the same period of the previous year, mainly due to the efficiency derived from our annual maintenance plan as well as lower cost of raw materials. Likewise, EBITDA increased five percentage and EBITDA margin remained in line for the first six months of the year when compared to the same period of 2024. Turning now to operating expenses. Administrative expenses for the 2025 increased 13.8 percentage when compared to the second quarter of twenty twenty four.

[Ely Adriana Hayashi Hirahoka, CFO and Director - Finance & Cybersecurity at Cementos Pacasmayo]

Likewise, administrative expenses for the first six months of the year increased 17.9 percentage compared to the same period of the previous year. This increase was mainly due to higher personnel expenses because of the union's bonus. In an effort to optimize time and resources, collective bargaining with our labor union is performed every three years. As incentives close this multiyear agreement, we offer a higher bonus for the first year, therefore, increasing expenses. Selling expenses increased 28% during the 2520 3.2 percentage during the first June of the year when compared to the second quarter and first six months of twenty twenty four, respectively.

[Ely Adriana Hayashi Hirahoka, CFO and Director - Finance & Cybersecurity at Cementos Pacasmayo]

This increase was mainly due to higher advertising and promotion expenses as well as the union bonus mentioned before. Moving on to different segments. Sales of cement increased 6.3 percentage this quarter when compared to the same period of last year, mainly due to increased demand. Gross margin increased 3.2 percentage points during this same period when compared to the second quarter of twenty twenty four, mainly due to lower cost of cementitious materials. For the first six months of the year, results were similar, with sales increasing five percentage and gross margin increasing 2.9 percentage points when compared to the same period last year.

[Ely Adriana Hayashi Hirahoka, CFO and Director - Finance & Cybersecurity at Cementos Pacasmayo]

During this quarter, concrete pavement and mortar sales increased 9.8 percentage when compared to the same period in 2024, mainly due to increased sales of concrete as payment for the Piura Airport project as well as to other infrastructure projects such as Riverbank Defenses, the Tarata Bridge and the Yanacocha project. However, gross margin decreased 3.2 percentage points in the 2025 when compared to the same period of last year. This decrease was mainly due to execution of the Piura Airport project. This is a difference in exchange gain rate between the rate projected in the contract versus a real rate exchange rate as well as increased cost related to the execution of the Piura Airport project as it extended over our planned execution period. We remain confident that developing building solutions is a right path for our company even if it entails some short term learning curve additional cost.

[Ely Adriana Hayashi Hirahoka, CFO and Director - Finance & Cybersecurity at Cementos Pacasmayo]

Likewise, for the first six months of the year, concrete pavement and mortar sales increased 16.1 percentage, and gross margin decreased 4.8 percentage point when compared to the same period last year. Regarding precast materials, sales increased 4.1 percentage this quarter and 5.3 during the first six months of the year when compared to the second quarter and the first six months of twenty twenty four, respectively, mainly due to an increase in sales volumes to the public sector. However, gross margin this quarter and during the first six months of the year was lower by one point five and one point six percentage points, respectively, compared to the second quarter and first six months of twenty four, respectively. Moving back to our consolidated results, net profit increased 29.9 percentage this quarter when compared to the same period of last year, mainly due to increased revenues and gross profit as well as a reduction in financing expenses. We decreased our debt level and therefore reduced our interest payments.

[Ely Adriana Hayashi Hirahoka, CFO and Director - Finance & Cybersecurity at Cementos Pacasmayo]

During the first six months of the year, net income increased 16.5 percentage when compared to the same period of last year. Finally, in terms of debt, our net debt to EBITDA ratio was 2.6 times, a level we feel very comfortable with. To summarize, this quarter financial results show our ability to benefit from better market conditions while managing costs in order to achieve profitability. We are confident that we will continue delivering positive results during the rest of the year. Operator, can we now open the call for questions?

[Operator]

Thank you. We'll now be moving to the question and answer section. If you'd like to ask a question, please press 2 on your phone and wait to be prompted. If you're dialed in by the web, you can type your question in the box provided or request to ask a voice question. Please wait a moment or two for the questions to come in.

[Operator]

Okay. So our first question is from Marcelo from Itau. Your line is now open. Please go ahead.

[Marcelo Furlan Palhares, Equity Research Analyst at Itau BBA]

Hi. Hi, everyone. Good morning. Can you hear me?

[Operator]

Yes. We can hear you.

[Marcelo Furlan Palhares, Equity Research Analyst at Itau BBA]

Okay. Thank you so much. So, guys, I have two questions here. It's related to the second half, both. So what are your expectations for volumes going forward?

[Marcelo Furlan Palhares, Equity Research Analyst at Itau BBA]

So you should expect the same trend as seen in the first half with this from mid to high single digit increase in volumes for for Pacasmayo? And my second question is related to CapEx. We have seen the company dispersing this around 300,000,000 per soles per quarter as CapEx. So I just would like to see what are your what is your expectation for CapEx for the second half of this year? And also if you could break this down between maintenance CapEx and growth CapEx to to be helpful as well. So these are my two questions. Thank you.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

Thank you, Marcelo. In terms of volumes, we think your trend will remain, single high digits. I think, is gonna be a trend for the second part of the year. It's gonna depend greatly in how infrastructure projects unveil. And we we have things like the Tata or La Leje Motupeka.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

Sometimes you're supposed to start in August, and they start two months later. But in in general, I think it's very positive. I think the trend should remain. And in terms of the CapEx, we've been stating that at this point, we we're not involved in any substantial increase of capacity. Our sustaining CapEx is around a 100,000,000 soles every year that is dedicated to our our three plants and all our ready mix plants.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

And we have small initiatives of CapEx for 8 to $3,000,000, but nothing really substantial in the in during this year or the coming years. We are I mean, there's a capacity at 70 something percent, so we are ready to engage in a in increased demand without increasing CapEx.

[Marcelo Furlan Palhares, Equity Research Analyst at Itau BBA]

Okay. Thank you so much, guys. If I just follow-up here a little bit. In terms of, you know, as you guys are expecting this high single digit for volumes increase for the second half, how what could we expect for margins here? Maybe could we expect some margin EBITDA margin improvement versus the first half?

[Marcelo Furlan Palhares, Equity Research Analyst at Itau BBA]

Or do you believe maybe margins would be flattish versus the first half? And if I may, just one final question related to dividends. As you guys mentioned that you don't have any expectations of a huge growth projects going forward. So what are the company's expectations for dividend distribution maybe for for '25?

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

So in terms of the EBITDA margin, should remain between 2829%. And in terms of dividends, I mean, these are decisions that's really made at the board and the shareholder level. But, I mean, we've been, over the last year, very consistent at the dividend level. And this year, we see no reason to change that if anything has said in the past. The company policy has been always that the excess cash belongs to the shareholders.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

I think there's a higher chance of that giving the main going higher than going lower. But for sure, I think it will remain at the same level as previous years.

[Marcelo Furlan Palhares, Equity Research Analyst at Itau BBA]

Okay. Very helpful. Thank you so much, guys.

[Operator]

Thank you. Our next question is from Omar Avellaneda from Vinci Compass. Good morning, and thanks for the call. I just have one question. We just re recently saw CEMEX CEMEX used Chiang Kai ports to import cement.

[Operator]

Does this infrastructure change competitive dynamics in the Peruvian market?

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

I think it's a question. I think that Shanghai is a a great port. It's a it's a great news for the country. You have to bear in mind that Shanghai is very close to Lima. I mean, if you talk about the dynamics of our market, I mean, we're much more influenced by any changes that would happen in the Sala Verde or the Paita Port.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

That being said, yeah, every new port may change a little bit dynamic, but really associated to the areas close to the port. I mean, if you ask me, I mean, is it gonna influence the South? No. It's gonna influence the North. It's a Kai'a Port, maybe a little bit, but it's it's fundamentally focused into into Lima. Shanghai is an alternative to the Kai'a Port.

[Operator]

Thank you.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

And, just one if if I got it precise, and one of the reasons they they, yeah, they used Shanghai in the same case was because for technical reasons, Kaya was not available at the given point of the ship coming into into into the country. I don't know in the future. They will repeat the same part.

[Operator]

Thank you. Just a reminder, if you'd like to ask a question, please press two on your phone and wait for the prompt. And if you're dialed in by the web, you can either type your question in the box provided or request to ask a voice question. We'll wait a few moments for any new questions to come in. Okay.

[Operator]

It looks like we have no further questions. I will now hand it back to the cement system for the concluding remarks.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

Thank you. This quarter's performance reflects the strength of our long term strategy and our ability to execute with purpose. Cement is at the core of Peru's development. It underpins better housing, safer roads, and more connected inclusive communities. We firmly believe that poverty is one of the greatest threats to the environment.

[Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo]

Without access to economic opportunity and basic infrastructure, it's difficult for communities to invest in sustainability. That is why our work goes beyond building materials and focuses on enabling a more equitable, resilient, and stable future for all. We have started in great manner the first semester of this year, and we are convinced the second semester will follow, and we will post post hopefully record results for this year. Thanks to everybody for the continued interest in our company. As always, if should you have any further questions, we'll always be be here. Thank you.

[Operator]

This concludes the call. Thank you, and have a nice day.

Participants

Analysts

• Claudia Bustamante, Sustainability & IR Manager at Cementos Pacasmayo
• Humberto Nadal Del Caprio, GM, CEO & Director at Cementos Pacasmayo
• Ely Adriana Hayashi Hirahoka, CFO and Director - Finance & Cybersecurity at Cementos Pacasmayo
• Marcelo Furlan Palhares, Equity Research Analyst at Itau BBA