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01/11 16:17
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture: revenue and EBITDA growth are positive, but increased expenses and declining margins pose concerns. The Q&A session reveals positive volume and dividend expectations but unclear competitive impacts from Chancay port. Overall, the financial performance and strategic updates balance out risks, suggesting a neutral stock price reaction.
Sales Volume Increased by 7.1% year-over-year due to stronger demand for cement and concrete, primarily for infrastructure-related projects.
Consolidated EBITDA $130.2 million, a 9% increase year-over-year despite increased expenses from collective bargaining negotiations. This reflects disciplined execution and alignment with strategic objectives.
Revenues Increased by 5.9% year-over-year to PEN 484.1 million, driven by higher sales of bagged cement, concrete, and pavement.
Gross Profit Increased by 11.2% year-over-year, attributed to higher revenue and increased cost of raw materials.
Administrative Expenses Increased by 13.8% year-over-year for the quarter and 17.9% for the first 6 months, mainly due to higher personnel expenses from a union bonus.
Selling Expenses Increased by 28% year-over-year for the quarter and 23.2% for the first 6 months, driven by higher advertising, promotion expenses, and union bonuses.
Cement Sales Increased by 6.3% year-over-year for the quarter due to higher demand. Gross margin increased by 3.2 percentage points due to lower cost of cement materials.
Concrete, Pavement, and Mortar Sales Increased by 9.8% year-over-year for the quarter, driven by projects like Piura Airport, riverbank defenses, Tarata Bridge, and Yanacocha project. Gross margin decreased by 3.2 percentage points due to execution costs and exchange rate differences.
Precast Materials Sales Increased by 4.1% year-over-year for the quarter, mainly due to higher sales volumes to the public sector. Gross margin decreased by 1.5 percentage points.
Net Profit Increased by 29.9% year-over-year for the quarter, driven by higher revenues, gross profit, and reduced financing expenses from lower debt levels.
Sales Volume: Sales volume increased by 7.1% year-over-year, driven by stronger demand for cement and concrete, particularly for infrastructure-related projects.
Concrete, Pavement, and Mortar Sales: Sales increased by 9.8% compared to the same period in 2024, driven by projects like the Piura Airport, riverbank defenses, the Tarata Bridge, and the Yanacocha project.
Infrastructure Projects: Steady growth in infrastructure projects, addressing Peru's significant infrastructure and housing deficit. The company is committed to contributing over $100 million through the Obras por Impuestos program this year.
Public Sector Sales: Sales of precast materials increased by 4.1% this quarter and 5.3% in the first 6 months of the year, driven by increased sales volumes to the public sector.
EBITDA: Consolidated EBITDA reached $130.2 million, a 9% increase year-over-year, reflecting disciplined execution and alignment with strategic objectives.
Cost Management: Gross profit increased by 11.2% year-over-year due to efficiencies from the annual maintenance plan and lower raw material costs.
Debt Management: Net debt-to-EBITDA ratio improved to 2.6x, reducing financing expenses and interest payments.
Obras por Impuestos Program: The company is leveraging this program to finance public infrastructure projects, showcasing the benefits of concrete solutions and contributing to national development.
Talent Development: Recognized as a top-ranked cement company in the MERCO Talent index for the seventh consecutive year, highlighting the company's focus on attracting and developing top talent.
Collective Bargaining Negotiations: Increased expenses related to collective bargaining negotiations, including higher personnel expenses and union bonuses, which could impact profitability.
Administrative Expenses: Administrative expenses increased significantly (13.8% in Q2 2025 and 17.9% for the first 6 months of 2025), driven by higher personnel costs, potentially straining operational budgets.
Selling Expenses: Selling expenses rose sharply (28% in Q2 2025 and 23.2% for the first 6 months of 2025), mainly due to higher advertising and promotion costs, which could pressure margins.
Gross Margin Decline in Concrete and Pavement: Gross margin for concrete and pavement decreased by 3.2 percentage points in Q2 2025 due to increased costs and execution delays in the Piura Airport project, impacting profitability.
Gross Margin Decline in Precast Materials: Gross margin for precast materials decreased by 1.5 percentage points in Q2 2025 and 1.6 percentage points for the first 6 months of 2025, due to higher costs, affecting overall margins.
Execution Delays in Piura Airport Project: Execution delays and cost overruns in the Piura Airport project led to increased costs and lower-than-expected gross margins, posing risks to project profitability.
Future Infrastructure Projects: The company is committed to addressing Peru's significant infrastructure and housing deficit by delivering high-quality products and services. They are optimistic about the steady growth in infrastructure projects and their role in driving economic growth and social inclusion.
Obras por Impuestos Program: The company has committed over $100 million to the Obras por Impuestos program in 2025, which finances public infrastructure projects in exchange for tax certificates. This program is expected to showcase the benefits of concrete solutions and improve regional connectivity and economic opportunities.
Market Optimism: The company remains extremely optimistic about the future of Peru and its market, expecting continued positive momentum in the coming quarters.
Building Solutions Development: The company is confident in the development of Building Solutions as a strategic path, despite short-term additional costs. This includes projects like the Piura Airport and other infrastructure developments.
The selected topic was not discussed during the call.
The earnings call highlights strong financial performance with increased sales volumes and net income, improved cost efficiency, and a positive outlook on infrastructure projects. Despite increased expenses, the company's net profit rose, and debt levels improved. The Q&A session revealed continued strong volume and margin expectations, with no significant electoral impact anticipated. The company's strategic focus on infrastructure and marketing investments suggests a positive sentiment, likely leading to a stock price increase over the next two weeks.
The earnings call presents a mixed picture: revenue and EBITDA growth are positive, but increased expenses and declining margins pose concerns. The Q&A session reveals positive volume and dividend expectations but unclear competitive impacts from Chancay port. Overall, the financial performance and strategic updates balance out risks, suggesting a neutral stock price reaction.
The earnings call presents mixed signals: positive revenue growth, improved net profit, and deleveraging are offset by increased expenses and margin declines in key segments. The Q&A reveals management's optimism about future volumes and stable EBITDA margins, but concerns about labor costs and unclear responses temper enthusiasm. No new partnerships or shareholder return plans were announced. Overall, the sentiment is neutral as the positives are balanced by potential risks and uncertainties.
The earnings call summary and Q&A indicate strong financial performance with record EBITDA and net profit growth, improved debt ratios, and positive revenue expectations. The share buyback program also supports a positive sentiment. However, concerns about demand fluctuations, regulatory challenges, and supply chain issues slightly temper the outlook. Overall, the sentiment is positive, with potential for stock price appreciation, especially given the share buyback program and operational efficiencies.
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