CPAC Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

Q4 2025 Performance:
- Revenues increased by 6.2% year-over-year to PEN 559.5 million.
- EBITDA (excluding one-off expenses) reached PEN 158.7 million, an 11.4% increase from Q4 2024.
- Gross profit rose by 11.4% year-over-year, driven by lower raw material costs and operational efficiencies.
- Net income for Q4 was negative due to transaction-related expenses, but would have been PEN 59.8 million (up 19.6% YoY) without these costs.
Full Year 2025 Performance:
- Total revenues grew by 7% compared to 2024.
- Full-year EBITDA (excluding one-off expenses) reached PEN 594.2 million, marking a 6.4% increase YoY.
- Net income for the full year, excluding transaction expenses, would have been PEN 231.8 million, a 16.5% increase from 2024.

2. Strategic Updates and Business Highlights

Acquisition Announcement: Holcim is set to acquire Inversiones Aspi, which holds a 50.01% stake in Cementos Pacasmayo, for PEN 5.1 billion, reflecting a 9x EBITDA multiple. This transaction is pending regulatory approval.
Sustainability Initiatives: Pacasmayo achieved a 3-star recognition from Peru's Ministry of Environment for reducing greenhouse gas emissions and maintained a top position in the Merco ESG responsibility ranking.
Sales Performance: Strong demand in infrastructure projects and self-construction segments contributed to overall sales growth, despite a decline in concrete, pavement, and mortar sales due to project delays.

3. Forward Guidance and Outlook

Management expressed optimism for 2026, anticipating stronger volume growth and stable EBITDA margins, potentially increasing due to operational efficiencies and energy-saving projects.
The company expects to navigate potential project-related disruptions and maintain a positive trajectory in profitability.

4. Bad News, Challenges, or Points of Concern

Transaction Costs: The company incurred significant one-off expenses related to the Holcim acquisition, impacting net income.
Project Delays: The pause of the Motupe River Bank protection project negatively affected sales volumes and margins, raising concerns about future performance in concrete and mortar segments.
Increased Operating Expenses: Administrative expenses rose significantly due to higher personnel costs, which could pressure future profitability.

5. Notable Q&A Insights

Transaction Details: Management clarified that acquisition-related expenses were due to long-standing contractual obligations and are expected to be partly absorbed by Holcim post-acquisition.
Regulatory Approval Confidence: The CEO expressed confidence in receiving regulatory approvals for the Holcim transaction without foreseeable impediments.
Future Margin Expectations: Management anticipates stable to slightly improved EBITDA margins in the upcoming year, despite challenges from project delays and competitive pricing pressures.

Overall, while CPAC demonstrated solid financial performance and strategic growth through the Holcim acquisition, it faces challenges from transaction costs and project delays that could impact future results.

CPAC — Cementos Pacasmayo S.A.A.