Cementos Pacasmayo S.A.A. (CPAC) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlighted strong financial performance with significant growth in EBITDA, net income, and sales volume, despite increased selling expenses and a decrease in concrete segment revenue. Management's explanation of cost improvements as structural suggests sustainability. However, uncertainties remain due to unclear responses on selling expenses and capital allocation post-acquisition. The positive outlook is supported by operational excellence, expanded margins, and optimistic guidance. Although market cap data is unavailable, the overall sentiment suggests a positive stock movement in the short term.
Key Financial Performance
Sales Volume 11.7% increase year-over-year, driven primarily by higher demand for cement and concrete.
Consolidated EBITDA PEN 177.9 million, a 32.1% increase compared to the first quarter of 2025. This was driven by disciplined cost control and gross margin expansion in core businesses due to operational efficiencies.
EBITDA Margin 32%, up from 27% in the first quarter of 2025, reflecting operational excellence and disciplined expense management.
Total Revenues PEN 555.7 million, an 11.3% increase compared to the first quarter of 2025, primarily driven by an 11.7% increase in total sales volumes across cement, concrete, and precast.
Cement Revenues PEN 466.4 million, a 16% increase year-over-year, driven by higher sales volume of bagged cement for the self-construction segment.
Cement Gross Margin 48.2%, up 1.5 percentage points from the first quarter of 2025, driven by higher volumes, slight improvement in average prices, and lower unit costs due to reduced downtime of kilns.
Concrete and Mortar Revenue PEN 56 million, a 15.2% decrease year-over-year, due to a higher comparative base in the first quarter of 2025 (significant volumes from the Piura airport project).
Concrete Gross Margin 16.4%, an 18.3 percentage point increase, driven by sales to the Yanacocha project requiring higher-margin concrete solutions.
Precast Sales PEN 6.6 million, a 4.8% increase year-over-year, supported by increased demand from the public sector.
Precast Gross Margin 9.1%, a 7.5 percentage point improvement, achieved through higher sales volumes allowing better dilution of fixed costs.
Consolidated Net Income PEN 81.9 million, a 55.4% increase year-over-year, driven by higher operating profit and a decrease in financial expenses due to reduced leverage.
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Operating Highlights
Acquisition by Holcim Limited: Holcim Limited acquired a 50.01% controlling interest in Cementos Pacasmayo, marking a significant change in control and opening global opportunities for the company.
Revenue Growth: Total revenues reached PEN 555.7 million, an 11.3% increase compared to Q1 2025, driven by an 11.7% increase in total sales volumes across cement, concrete, and precast.
Operational Efficiency: Consolidated EBITDA increased by 32.1% year-over-year to PEN 177.9 million, with an EBITDA margin expansion to 32%, driven by disciplined cost control and gross margin improvements.
Cost Management: Administrative expenses decreased by 0.7% due to lower personnel expenses, while selling expenses increased by 33.5% due to higher advertising and promotion costs.
Segment Performance: Cement revenues grew 16% to PEN 466.4 million, with gross margin expanding to 48.2%. Concrete segment revenues decreased by 15.2%, but gross margin improved to 16.4%. Precast sales increased by 4.8%, with gross margin reaching 9.1%.
Sustainability Achievements: Secured a position in the S&P Global Sustainability Yearbook 2026 for the sixth consecutive year and entered the global top 10% of the construction materials industry.
Social Impact Initiatives: Formalized a partnership with FICEM and Habitat for Humanity to integrate the Sueños en Concreto program into the 100,000 Floors to Play On initiative, improving living conditions for families in northern Peru.
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Risk or Challenges
Selling Expenses: Increased by 33.5% in Q1 2026 compared to Q1 2025, driven by higher advertising and promotion expenses, as well as an increase in provisions for doubtful payments.
Concrete Segment Revenue: Decreased by 15.2% in Q1 2026 due to a higher comparative base in Q1 2025, which included significant volumes from the Piura airport project.
Provisions for Doubtful Payments: Increase in provisions for doubtful payments, which could impact financial stability and cash flow.
Dependence on Self-Construction Market: Reliance on the self-construction market in northern Peru for bagged cement sales, which may pose risks if market demand fluctuates.
Operational Costs: While operational efficiencies have improved, any disruptions or inefficiencies could impact profitability.
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Guidance & Outlook
Acquisition by Holcim Limited: On March 30, 2026, Holcim Limited completed the acquisition of Inversiones Aspi, gaining a 50.01% controlling interest in Cementos Pacasmayo. This change of control is expected to open global opportunities and promote sustainable construction on a wider scale.
Strategic Partnership with FICEM and Habitat for Humanity: A strategic partnership was formalized to integrate the local Sueños en Concreto program into the 100,000 Floors to Play On initiative, aiming to improve the health and quality of life for families in northern Peru.
Revenue Growth: Total revenues for the first quarter of 2026 reached PEN 555.7 million, an 11.3% increase compared to the first quarter of 2025, driven by an 11.7% increase in total sales volumes across cement, concrete, and precast.
Cement Segment Performance: Cement revenues grew 16% to PEN 466.4 million, driven by higher sales volume of bagged cement for the self-construction segment. The gross margin from cement expanded to 48.2%.
Concrete Segment Performance: Revenue for the concrete segment decreased 15.2% to PEN 56 million due to a higher comparative base in the first quarter of 2025. However, the gross margin expanded by 18.3 percentage points to 16.4%, driven by sales to the Yanacocha project.
Precast Segment Performance: Precast sales increased 4.8% to PEN 6.6 million, supported by increased demand from the public sector. Gross margin for precast reached 9.1%, a significant improvement over the previous year.
Profitability and EBITDA: Consolidated EBITDA reached PEN 177.9 million, a 32.1% increase compared to the first quarter of 2025. EBITDA margin expanded to 32%, reflecting operational excellence and disciplined expense management.
Net Income and Leverage: Consolidated net income for the quarter was PEN 81.9 million, a 55.4% increase year-over-year. The net debt-to-EBITDA ratio stood at 2.6x.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Gross margins expanded materially and exceeded expectations. How much of the improvement in cement unit cost do you consider structural, operational efficiencies, energy, bagging versus more cyclical factors such as volume and mix?
A:The improvement in cement unit cost is not considered cyclical. Cement sales in the past have shown very little cyclical behavior in the second semester of the year. The first quarter is usually the weakest but not by a significant margin. Selling expenses are driven by investments in brand positioning and securing distributors. The challenge is to maintain the current EBITDA margin and profitability. Marketing expenses may vary in the second semester depending on provisions.
Q:Selling expenses increased meaningfully this quarter driven by marketing and higher credit provisions. How much of this increase should we view as recurring versus one-off or timing related?
A:The increase in selling expenses is attributed to ongoing investments in brand positioning and securing distributors. The management did not provide a clear breakdown of recurring versus one-off or timing-related expenses but mentioned that marketing expenses may vary in the second semester depending on provisions.
Q:Now that Holcim has completed the acquisition and the controlling stake, can you elaborate on any change that we should expect on capital allocation, strategic priorities, perhaps dividends?
A:The management stated that they will have to wait to see what the new shareholders decide. For the time being, they are keeping the course steady.
Q:Review of Unclear Management Responses
A:Management avoided providing a clear breakdown of recurring versus one-off or timing-related selling expenses. Additionally, they did not elaborate on potential changes in capital allocation, strategic priorities, or dividends following Holcim's acquisition, stating they would wait for decisions from the new shareholders.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
American Cement
Aspi Limited
Carpio chapter
Cement Federation
Claudia
Concreto program
Director Mrs
ESG term
FICEM Habitat
Federation FICEM
Floors initiative
Global Sustainability
Group decade
Habitat Humanity
Hochschild Group
Humanity alliance
Humberto Chief
Humberto Reynaldo
Inter American
Inversiones Aspi
Investor Relations
Limited interest
Mr Humberto
Ms
Peru
commitment
concrete
construction
control
evolution
expansion
overview
CPAC Transcript
Cementos Pacasmayo S.A.A. (CPAC) Q1 2026 Earnings Call Transcript
Positive4-27
The earnings call highlighted strong financial performance with significant growth in EBITDA, net income, and sales volume, despite increased selling expenses and a decrease in concrete segment revenue. Management's explanation of cost improvements as structural suggests sustainability. However, uncertainties remain due to unclear responses on selling expenses and capital allocation post-acquisition. The positive outlook is supported by operational excellence, expanded margins, and optimistic guidance. Although market cap data is unavailable, the overall sentiment suggests a positive stock movement in the short term.
Trisura Group Ltd. (TSU:CA) Q4 2025 Earnings Call Transcript
Positive2-13
The earnings call shows strong financial performance with a 25% increase in net premiums and an 18% increase in book value per share. The company is expanding in the U.S. Surety market and has favorable reserve developments. Despite a higher debt-to-capital ratio, it's still under conservative targets. The Q&A highlights growth in the Warranty business and strategic expansion plans. Concerns about AI investments were vague but don't overshadow the positive outlook. Overall, the sentiment is positive, likely leading to a 2% to 8% stock price increase in the next two weeks.
Cementos Pacasmayo S.A.A. (CPAC) Q4 2025 Earnings Call Transcript
Unknown2-13
The earnings call presents mixed results: strong cement sales and improved gross margins in some areas contrast with declines in others, notably concrete sales. The negative net income due to transactional expenses is concerning, though management remains optimistic about future margins. The Q&A reveals potential risks and uncertainties, especially regarding the Holcim transaction and unclear future guidance. These factors, combined with the strategic focus on sustainability and client-centric approaches, suggest a neutral stock price movement over the next two weeks.
Cementos Pacasmayo S.A.A. (CPAC) Q3 2025 Earnings Call Transcript
Positive10-29
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.
CPAC Report
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