The following is a summary of the Cementos Pacasmayo S.A.A. (CPAC) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Cementos Pacasmayo recorded a gross profit margin of 39.4%, up by nearly 9 percentage points from the last year's same quarter, a growth attributed to lower production costs and reduced coal costs.

• The company's Q4 2023 revenues were PEN511.4 million, a 4.2% decrease from the previous year's same quarter.

• Despite the drop in revenue, gross profit increased by 23.6% to PEN200.16 million, largely because of reduced costs from discontinuation of imported clinker use and lower coal costs.

• Consolidated EBITDA saw a 1.2% reduction, primarily attributed to the impairment of vertical kilns.

• For the full year 2023, the company's revenues decreased by 7.8% whereas gross profit went up by 5.7%, driven mostly by efficiencies realized in H2 2023.

• Adjusted EBITDA rose by 4.9% with the margin increasing by 3.2 percentage points from the previous year.

• However, net profit fell by 7.7% for the quarter and 4.5% for the full year, predominantly due to the non-cash impact from the impairment of vertical kilns.

Business Progress:

• The company continues to advance its digital strategy and now operates fully digitally from a commercial standpoint with the help of tools like Mundo Experto, ConstruyeXperto, Ferrexperto, and PacasPro.

• In 2024, the company plans to leverage efficiencies from the new kiln in Pacasmayo, anticipating a better demand environment.

• Investments totaling $85 million were made in upgrading clinker capacity, with an additional $3 million used to restore Piura's old kiln.

• Sales of cement fell by 7.3% in Q4 2023 and 5.8% for the full year, driven by lower demand from self-construction projects and public and private works.

• However, sales of concrete pavement and mortars increased by 34.3% compared to Q4 2022, highlighting a positive sales trend.

• The company expects to continue realizing positive results from cost optimization and lower raw material costs.

• The projected EBITDA margin for 2024 is around 28%, backed by further cost savings on coal and the discontinuation of imported clinker use.

More details: Cementos Pacasmayo IR

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