Cementos Pacasmayo: Navigating Market Challenges with Operational Excellence

Cementos Pacasmayo S.A.A., a leading cement company serving the Peruvian construction industry, has announced its consolidated results for the fourth quarter (Q4) and full year 2024. Despite facing market challenges, the company has demonstrated resilience and adaptability, showcasing its ability to navigate market fluctuations and maintain strong financial performance. Let's dive into the key highlights and insights from Cementos Pacasmayo's recent results.



Q4 2024 Financial and Operational Highlights:

* Sales volume of cement, concrete, and precast increased by 2.6%, driven by bagged cement and public sector demand.
* Revenues increased by 3.0%, in line with the increased sales volume.
* Consolidated EBITDA declined by 8.7% to S/142.5 million, with EBITDA margin dropping by 3.5 percentage points to 27.1%.
* Net income rose by 39.3% to S/50.0 million, primarily due to the impairment loss of vertical kilns in the previous year.

2024 Financial and Operational Highlights:

* Sales volume of cement, concrete, and precast decreased by 3.7%, mainly due to a decline in cement demand.
* Revenues increased by 1.4%, driven by sales mix and higher prices.
* Consolidated EBITDA grew by 6.0% to S/549.3 million, with EBITDA margin expanding by 1.2 percentage points to 27.8%.
* Net income increased by 17.8% to S/198.9 million, driven by operational efficiencies from the new Pacasmayo kiln and favorable raw material costs.



Cementos Pacasmayo's Q4 and full-year 2024 results reveal a company successfully navigating market challenges through strategic pricing and operational optimization. The 27.1% Q4 EBITDA margin, while lower year-over-year, remains robust for the industry and reflects the company's pricing power in its regional market. The 17.8% increase in annual net income to S/198.9 million is particularly noteworthy, as it stems from sustainable improvements rather than one-time gains. The new Pacasmayo kiln investment is already delivering returns through operational efficiencies, demonstrating successful capital allocation.

The divergence between volume and revenue trends – a 3.7% annual volume decline versus a 1.4% revenue increase – highlights effective price management and product mix optimization. Cementos Pacasmayo's ability to maintain revenue growth despite volume pressures indicates strong market positioning and pricing power in its northern Peru stronghold. The increase in public sector demand in Q4 2024 suggests potential momentum heading into 2025, particularly given Peru's infrastructure development needs. The company's sustained EBITDA margin improvement on an annual basis, rising 1.2% to 27.8%, reflects successful cost management and operational efficiency initiatives that should provide ongoing benefits.

The inclusion in S&P's Yearbook and high ranking in Merco ESG strengthens the company's position with ESG-focused investors, potentially expanding its investor base and reducing capital costs. These achievements, combined with operational improvements, position Pacasmayo favorably for sustainable growth in Peru's construction sector.

In conclusion, Cementos Pacasmayo's Q4 and full-year 2024 results demonstrate the company's ability to adapt and thrive in the face of market challenges. By focusing on operational efficiencies, strategic pricing, and strong ESG credentials, Cementos Pacasmayo is well-positioned to continue its success in the years to come. As an investor, keeping an eye on Cementos Pacasmayo's progress and considering its stock as a potential addition to your portfolio could prove to be a wise decision.