CPAC — Cementos Pacasmayo S.A.A.

CPAC Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Quarterly Revenue: PEN 559.5 million, up 6.2% year-over-year.
• Quarterly EBITDA: PEN 158.7 million, an 11.4% increase compared to the same period last year (excluding one-off expenses).
• Full Year EBITDA: PEN 594.2 million, up 6.4% year-over-year (excluding one-off expenses).
• Net Income: Negative for the quarter due to transaction-related expenses; would have been PEN 59.8 million (up 19.6% YoY) without these expenses.
• Net Debt to EBITDA Ratio: Increased to 2.8x, reflecting ongoing debt management efforts.

2. Strategic Updates and Business Highlights

• Holcim Acquisition: An agreement was announced for Holcim to acquire Inversiones Aspi, which holds a 50.01% stake in Cementos Pacasmayo, valued at PEN 5.1 billion (9x EBITDA). The deal is pending regulatory approval.
• Sales Volume Growth: Cement sales increased by 30.6% in Q4 and 8.7% for the full year, driven by infrastructure demand.
• Sustainability Recognition: Achieved 3-star recognition from Peru's Ministry of Environment for reduced greenhouse gas emissions and maintained a top position in the Merco ESG responsibility ranking.

3. Forward Guidance and Outlook

• 2026 Expectations: Management is optimistic about revenue growth and EBITDA margins, expecting them to remain stable or increase due to operational efficiencies and energy-saving projects.
• Market Conditions: Anticipated growth in construction spending post-elections and a positive outlook for the second half of 2026.

4. Bad News, Challenges, or Points of Concern

• Transaction Expenses: High acquisition-related expenses (PEN 77-80 million) raised questions about the financial impact on Pacasmayo.
• Project Delays: The Motupe Riverbank protection project is on hold, impacting concrete, pavement, and mortar sales, which saw a 25.1% decline in Q4.
• Increased Operating Expenses: Administrative expenses rose by 5.7% in Q4 and 50% for the full year, mainly due to higher personnel costs.

5. Notable Q&A Insights

• Regulatory Approval for Holcim Deal: Management expressed confidence in obtaining necessary approvals without foreseeable impediments.
• Concerns Over Acquisition Costs: Questions arose regarding why Pacasmayo incurred significant transaction costs related to the Holcim acquisition, which management attributed to long-standing contractual obligations.
• Future Margin Pressures: Analysts inquired about potential disruptions and margin pressures due to project delays; management reassured that EBITDA margins are expected to remain stable or improve.

This summary encapsulates the key financial metrics, strategic initiatives, and challenges faced by CPAC in Q4 2025, providing a balanced view of the company's performance and outlook.