Cementos Pacasmayo (CPAC) Q3 2024 earnings summary

Executive summary

• Achieved record consolidated EBITDA of S/154.6 million in 3Q24, up 19.9% year-over-year, with margin improving by 5.0 percentage points to 29.9%, driven by operational and cost efficiencies.

• Net income rose 35.9% to S/62.5 million in 3Q24, reflecting improved profitability despite slightly lower sales volumes.

• Sales volumes recovered sequentially but remained below the same quarter last year, with a 4.4% year-over-year decline.

• Launched innovative riverbank protection, water treatment plant projects, and a new digital solutions company, highlighting a focus on sustainable and digital building solutions.

• Advanced AI strategy with high employee engagement, successful pilot projects, and plans for full-scale implementation in 2025.

Financial highlights

• Revenues increased 0.2% year-over-year to S/517.8 million for 3Q24; gross profit rose 12.1% due to cost efficiencies and lower raw material costs.

• EBITDA margin reached 29.9%, up 5.0 percentage points year-over-year; net profit rose 35.9% for the quarter.

• Administrative expenses increased 15.4% for the quarter, mainly due to higher personnel and IT-related costs; selling expenses rose 10.7%.

• Operating profit rose 27.3% in 3Q24 and 13.6% in 9M24 compared to the same periods last year.

• Net income margin improved to 12.1% in 9M24 from 8.9% in 9M23.

Outlook and guidance

• Management expects cement volumes to increase in 2025, supported by major public projects and strong employment in fishing and agriculture.

• EBITDA margin for the full year 2024 is guided to be slightly above 29%, with similar levels expected for 2025.

• Strategic focus on AI adoption, experimentation, and enterprise-wide impact to drive future growth.

• Price strategy remains cautious, balancing profitability, brand, and market share.

• Management targets further expansion of building solutions, including innovative cement-based flood protection for northern Peru.