Cementos Pacasmayo S.A.A. Q3 Earnings Call Highlights

Key Points

• Strong Q3 performance: Revenue increased 16.3% year over year to PEN 667.4 million, while EBITDA rose 45.1% to PEN 233.1 million and net income grew 69.8% to PEN 131 million. The EBITDA margin expanded to 34.9% on stronger pricing, lower electricity costs and operational efficiencies.
• Cement demand drove growth: Sales volumes for cement, concrete and precast products increased 14.2% through the first nine months, with cement revenue up 21.3%. Precast revenue also grew, while concrete revenue fell after several major projects were completed.
• Moderate outlook: Management expects approximately 4% volume growth in 2027, subject to the severity of El Niño. Potential Holcim synergies have not yet affected results, and the board has not decided on a dividend or planned a share buyback.

Cementos Pacasmayo S.A.A. NYSE: CPAC reported higher third-quarter revenue, earnings and margins as stronger cement demand, pricing and cost efficiencies supported profitability, while management said it expects volume growth of about 4% in 2027 depending on the severity of El Niño.

Third-quarter revenue rose 16.3% from a year earlier to PEN 667.4 million, according to Chief Financial Officer Ely Hayashi. Revenue for the first nine months of 2026 increased 14.4% year over year to PEN 1.78 billion.

Chief Executive Officer Humberto Nadal said sales volumes across cement, concrete and precast products increased 14.2% through the third quarter. Demand was particularly strong for bulk cement used in mining and structural projects, as well as bagged cement used in self-construction.

Margins Expand on Pricing and Cost Actions

Consolidated EBITDA increased 45.1% year over year to PEN 233.1 million in the third quarter, while EBITDA for the first nine months rose 37.7% to PEN 585.8 million. The company’s quarterly EBITDA margin expanded seven percentage points to 34.9%.

Hayashi said the margin gains reflected revenue growth, improved selling prices, lower electricity rates under a new long-term energy contract and a lower clinker factor. Gross profit increased 33.7% to PEN 299.4 million during the quarter.

Administrative expenses declined 6.9% to PEN 31.2 million, primarily because of lower personnel expenses and a lower collective bargaining bonus than in the prior year. Selling expenses increased 9.8% to PEN 27 million, driven mainly by higher personnel and compensation costs.

Hayashi said consolidated net income increased 69.8% to PEN 131 million, attributing the improvement to higher operating profit. Net debt to EBITDA stood at 2.0 times as of Sept. 30, 2026.

Segment Results

• Cement: Revenue increased 21.3% to PEN 571.6 million. Gross margin expanded two percentage points to 50%, supported by the energy contracts and lower clinker factor.
• Concrete, pavement and mortar: Revenue declined 19.7% to PEN 65.6 million as deliveries for the Yanacocha, Motupe and Piura Airport projects were completed. Despite lower volume, gross margin increased 21 percentage points to 19.8%, which management attributed to a profitability-focused commercial strategy and cost savings following the Piura Airport project’s completion.
• Precast: Revenue rose 23.1% to PEN 11.3 million, reflecting demand for concrete pavers in public and private projects in Piura, Trujillo and Chiclayo. Gross margin grew 5.1 percentage points to 16.1% due to higher volume and lower cost of sales per ton.

Nadal also highlighted the company’s specialized construction offerings, including prefabricated concrete sheet piles. Pacasmayo secured an additional 4.4 kilometers of concrete sheet pile for the Piura River defense project, he said.

Outlook, Holcim and Shareholder Questions

Asked about the durability of the demand recovery, Nadal said the company expects approximately 4% volume growth next year, although he said the outlook will depend on the strength of El Niño.

In response to a question about potential synergies with Holcim’s network, Nadal said such benefits were not reflected in Pacasmayo’s current results. “We are still in the very early stages,” he said.

Management declined to provide details on potential expansion into other regions of Peru, with Nadal saying that question was more appropriately directed to Holcim. He said Pacasmayo’s focus remains on its current operations.

On capital allocation, Nadal said the board had not made a decision on a dividend distribution as of the call date. He also said there was no plan for a buyback of investment shares.

Addressing a recent tender offer, Nadal said Pacasmayo maintained a neutral position and could comment only on publicly available information. He said the offer had launched the previous week and was scheduled to remain open until Nov. 20, with steps proceeding according to regulatory requirements.

Beyond operations, Nadal said Pacasmayo’s Construye Experto digital ecosystem had surpassed 5,000 foremen with access to benefits and training opportunities. He also cited the company’s ninth-place national ranking in the Merco ranking and recognition for its Juntos contra la Anemia community initiative.

About Cementos Pacasmayo S.A.A. (NYSE:CPAC)

Cementos Pacasmayo SAA. is a Peru-based building materials company focused on the production, distribution and sale of cement and related construction products. Its portfolio includes cement, ready-mix concrete, concrete products, aggregates, mortar and other materials used in residential, commercial and infrastructure projects.

Founded in 1949, the company has developed an integrated production and distribution network serving northern and northeastern Peru. Its operations include cement manufacturing facilities in Pacasmayo and Rioja, as well as a cement plant in Piura, supporting distribution across the region through commercial, industrial and retail channels.

Cementos Pacasmayo is listed on the Lima Stock Exchange and its American depositary shares trade on the New York Stock Exchange under the symbol CPAC.

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