CPAC — Cementos Pacasmayo S.A.A.

CPAC Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Sales Volume: Increased by 9% year-over-year, driven by demand from infrastructure projects and self-construction.
• Revenue: Rose by 10.9% to PEN 574.1 million, primarily from concrete and pavement sales.
• Gross Profit: Increased by 14.4%, attributed to improved cost efficiency and a decrease in raw material costs.
• Net Income: Also up 14.4%, reaching PEN 71.5 million, with a cumulative growth of 15.6% for the year-to-date.
• EBITDA: Consolidated EBITDA was PEN 160.6 million, a 3.9% increase year-over-year.
• Debt Metrics: Net debt-to-EBITDA ratio improved to 2.5x due to higher EBITDA and debt amortization.

2. Strategic Updates and Business Highlights:

• The company is focusing on innovative building solutions, including prefabrication and B-methodology, to enhance efficiency and sustainability in construction.
• Collaborations with Newmont and Bechtel on a water treatment plant project highlight the company’s commitment to environmental sustainability.
• CPAC ranked among the top 10 companies in the American corporate reputation ranking for the third consecutive year, reflecting its commitment to ethical management.

3. Forward Guidance and Outlook:

• The company anticipates stable cement volumes through the end of 2025, despite potential electoral uncertainties in Peru.
• Management expressed optimism for continued growth in 2026, although specific projections were not provided.
• Sustaining capital expenditures are expected to remain around PEN 100 million, consistent with previous years.

4. Bad News, Challenges, or Points of Concern:

• Rising Operating Expenses: Administrative expenses rose by 20.2% and selling expenses by 25.5% in Q3 2025, primarily due to higher personnel costs and increased marketing efforts.
• Market Conditions: Concerns about potential slowdowns in private investment and public spending due to electoral cycles were raised, although management believes the impact will be minimal.
• Competitive Pressures: Increased marketing expenses indicate a competitive landscape, necessitating ongoing investment to maintain market share.

5. Notable Q&A Insights:

• Management reassured that the upcoming elections are not expected to significantly impact construction activity, citing a resilient economy and ongoing projects.
• The company plans to maintain its current level of marketing and promotional spending as long as it continues to yield positive results.
• An extraordinary increase in financial income to PEN 8.7 million was attributed to mining royalties, which contributed to the financial performance in Q3.
• The board has decided to maintain dividends at PEN 190 million for 2026, aligning with the company's strategy to reduce debt while providing shareholder returns.

Overall, CPAC demonstrated solid financial performance in Q3 2025, supported by strategic initiatives and a focus on sustainability, while navigating challenges related to rising costs and competitive pressures.