Breaking Down Cementos Pacasmayo S.A.A. (CPAC) Financial Health: Key Insights for Investors

Are you keeping a close watch on the construction industry in Peru? Have you considered how key players like Cementos Pacasmayo S.A.A. (CPAC) are performing? For the full year 2024, CPAC's financial results show some interesting trends: While sales volumes of cement, concrete and precast saw a decrease of 3.7%, the company's revenues actually increased by 1.4%, thanks to a strategic sales mix and higher prices. Want to know how they managed to boost their consolidated EBITDA by 6.0% to reach S/ 549.3 million, and expand their margin by 1.2 percentage points to 27.8%? Read on to discover key insights into Cementos Pacasmayo's financial health and what it means for investors.

Cementos Pacasmayo S.A.A. (CPAC) Revenue Analysis

Cementos Pacasmayo S.A.A. (CPAC) generates revenue primarily from the sale of cement and other construction materials. A detailed look into their revenue streams reveals the specific products, geographical regions, and business segments that significantly contribute to their financial performance.

Understanding the breakdown of Cementos Pacasmayo S.A.A.’s revenue sources involves examining several key areas:

• Products and Services: Cement is the core product, but the company also generates revenue from the sale of concrete, blocks, and other related construction materials.
• Geographical Regions: Revenue is derived from various regions within Peru, with specific areas potentially contributing more significantly based on construction activity and demand.

Analyzing the year-over-year revenue growth rate provides insights into the company's performance trends. Recent data indicates the following:

• Historical Trends: Reviewing past annual reports and financial statements will show the revenue growth rate over the last few years.
• Percentage Increase/Decrease: This metric highlights the extent to which revenue has grown or declined compared to the previous year.

The contribution of different business segments to Cementos Pacasmayo S.A.A.’s overall revenue is essential for understanding the company’s financial structure.

• Business Segments: Understanding which segments (e.g., cement, concrete, precast) contribute the most to the total revenue.
• Segment Performance: Evaluating the performance of each segment helps identify areas of strength and weakness within the company.

Significant changes in revenue streams can indicate strategic shifts or market impacts. For instance:

• Market Conditions: Changes in the construction industry, economic conditions, or regulatory policies can impact revenue streams.
• Strategic Initiatives: New product launches, market expansions, or operational improvements can also lead to changes in revenue streams.

For more insights into the company's strategic direction, you might find this resource helpful: Mission Statement, Vision, & Core Values of Cementos Pacasmayo S.A.A. (CPAC).

Cementos Pacasmayo S.A.A. (CPAC) Profitability Metrics

Assessing the financial health of Cementos Pacasmayo S.A.A. (CPAC) requires a close examination of its profitability metrics. Key indicators such as gross profit, operating profit, and net profit margins provide valuable insights into the company's efficiency and overall financial performance. Additionally, comparing these ratios with industry averages and analyzing trends over time can reveal important information about CPAC's competitive positioning and ability to generate sustainable profits. You can gain further insights into the company's strategic objectives by exploring Mission Statement, Vision, & Core Values of Cementos Pacasmayo S.A.A. (CPAC).

Here's a breakdown of Cementos Pacasmayo S.A.A.'s profitability:

• Gross Profit: In 2024, Cementos Pacasmayo reported a gross profit of S/ 728.53 million.
• Operating Income: The operating income for the same period was S/ 390.6 million.
• Net Income: The company's net income reached S/ 198.9 million for the year 2024.

To gain a deeper understanding of Cementos Pacasmayo's profitability, it's essential to analyze key margin ratios:

• Gross Profit Margin: This ratio reflects the percentage of revenue remaining after deducting the cost of goods sold. Recent quarterly data shows a gross profit margin of 36.83% for Q4 2024, 37.47% for Q3 2024, and 37.81% for Q2 2024.
• Operating Profit Margin: The operating profit margin indicates the percentage of revenue remaining after deducting operating expenses. The operating profit margin was 19.99% for Q4 2024, 18.83% for Q3 2024, and 22.50% for Q2 2024.
• Pretax Profit Margin: This margin shows the percentage of revenue remaining before income taxes. For Q4 2024, the pretax profit margin was 14.97%, for Q3 2024 it was 14.67%, and for Q2 2024 it was 18.01%.
• EBITDA Margin: In 2024, Cementos Pacasmayo's consolidated EBITDA margin was 27.8%, marking a 1.2% increase on an annual basis, reflecting successful cost management and operational efficiency initiatives. However, in Q4 2024, the consolidated EBITDA margin was 27.1%, a 3.5 percentage point decrease compared to the same quarter in the previous year.
• Net Profit Margin: Information on net profit margin can be found in the table below.

Reviewing profitability trends over time provides valuable context. For the full year 2024:

• Revenues increased by 1.4%, despite a 3.7% decrease in sales volume.
• Net income increased by 17.8% to S/ 198.9 million.

Here is a table summarizing Cementos Pacasmayo's Income Statement data for fiscal year 2024 (in millions PEN):

Cementos Pacasmayo's financial results for Q4 2024 show mixed performance:

• Sales volume of cement, concrete, and precast increased by 2.6%.
• Revenues increased by 3.0%.
• Consolidated EBITDA decreased by 8.7% to S/142.5 million.
• Net income increased by 39.3% to S/ 50.0 million, mainly due to an impairment loss in 2023.

Operational efficiency plays a crucial role in Cementos Pacasmayo's profitability. The company's sustained EBITDA margin improvement reflects successful cost management and operational efficiency initiatives. These improvements are attributed to:

• The new kiln in Pacasmayo.
• Favorable raw material costs.

In 2024, Cementos Pacasmayo demonstrated effective cost management and operational efficiency, contributing to a 6.0% increase in annual consolidated EBITDA to S/549.3 million and a 17.8% increase in net income to S/198.9 million.

Cementos Pacasmayo S.A.A. (CPAC) Debt vs. Equity Structure

Understanding how Cementos Pacasmayo S.A.A. (CPAC) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, debt-to-equity ratio, and recent financing activities.

As of fiscal year 2024, Cementos Pacasmayo S.A.A. (CPAC) exhibits a well-balanced approach to its debt portfolio, strategically utilizing both long-term and short-term debt to optimize its financial structure. The company's financial statements reveal the specifics of its debt composition:

• Long-term debt: This constitutes a significant portion of the company's capital structure, with a total of S/691.1 million. This long-term financing supports the company's strategic investments and expansion projects.
• Short-term debt: Cementos Pacasmayo S.A.A. (CPAC) also utilizes short-term debt instruments, which amount to S/121.3 million. These are essential for managing immediate operational needs and short-term liabilities.

The debt-to-equity ratio is a key metric for evaluating a company's financial leverage. For Cementos Pacasmayo S.A.A. (CPAC), the debt-to-equity ratio stands at 0.43 as of 2024. This indicates that the company uses 43 cents of debt for every dollar of equity. When compared to industry standards, this ratio suggests a balanced approach to leverage, which is neither excessively aggressive nor overly conservative. The cement industry often requires substantial capital investments, making a moderate debt-to-equity ratio typical.

Analyzing Cementos Pacasmayo S.A.A. (CPAC)'s recent financial activities provides insights into its strategic financial management. While specific details on recent debt issuances, credit ratings, or refinancing activities would require the latest financial reports, it's important to consider the broader context:

• Debt Issuances: Monitoring any new bond issuances or loan agreements helps understand how Cementos Pacasmayo S.A.A. (CPAC) is raising capital for projects or refinancing existing debt.
• Credit Ratings: Changes in credit ratings from agencies like Standard & Poor's or Moody's can impact borrowing costs and investor confidence.
• Refinancing Activities: Refinancing existing debt at lower interest rates can improve profitability and cash flow.

Cementos Pacasmayo S.A.A. (CPAC) strategically balances debt financing and equity funding to optimize its capital structure. The company's approach involves:

• Maintaining a Sustainable Debt Level: Ensuring that debt levels do not become overly burdensome, which could increase financial risk.
• Attracting Equity Investments: Balancing debt with equity to maintain financial flexibility and attract investors.
• Utilizing Free Cash Flow: Employing internally generated funds to reduce reliance on external financing.

Here's a summary table highlighting key aspects of Cementos Pacasmayo S.A.A. (CPAC)'s debt structure:

Understanding Cementos Pacasmayo S.A.A. (CPAC)'s approach to debt and equity is essential for assessing its financial health and long-term sustainability. For more insights into the company's strategic direction, see Mission Statement, Vision, & Core Values of Cementos Pacasmayo S.A.A. (CPAC).

Cementos Pacasmayo S.A.A. (CPAC) Liquidity and Solvency

Analyzing Cementos Pacasmayo S.A.A. (CPAC)'s financial health involves a detailed look at its liquidity and solvency, which are crucial indicators of its ability to meet short-term and long-term obligations. Liquidity refers to the company's capacity to cover its immediate liabilities, while solvency assesses its long-term financial viability.

Here’s an overview of how to assess Cementos Pacasmayo S.A.A. (CPAC)'s liquidity:

• Current and Quick Ratios: These ratios provide insights into Cementos Pacasmayo S.A.A. (CPAC)'s ability to cover its short-term liabilities with its current assets. The current ratio is calculated by dividing current assets by current liabilities, while the quick ratio excludes inventories from current assets to provide a more conservative measure.
• Analysis of Working Capital Trends: Monitoring the trends in Cementos Pacasmayo S.A.A. (CPAC)'s working capital (current assets minus current liabilities) helps in understanding its operational efficiency and short-term financial health.
• Cash Flow Statements Overview: Examining the cash flow statements reveals the trends in operating, investing, and financing activities, offering a comprehensive view of how Cementos Pacasmayo S.A.A. (CPAC) generates and uses cash.
• Potential Liquidity Concerns or Strengths: Identifying any potential issues or advantages in Cementos Pacasmayo S.A.A. (CPAC)'s liquidity position is essential for investors to make informed decisions.

To provide a clear understanding, here's a hypothetical example of Cementos Pacasmayo S.A.A. (CPAC)'s key financial ratios and data for the fiscal year 2024:

Based on the hypothetical data, Cementos Pacasmayo S.A.A. (CPAC) shows a healthy liquidity position with a current ratio of 1.8 and a quick ratio of 1.2, indicating it can cover its short-term liabilities. The positive cash flow from operations of $75 million demonstrates its ability to generate cash from its core business activities. However, negative cash flows from investing and financing activities suggest investments in capital expenditures and debt repayments, which should be further analyzed in the context of the company's growth strategy.

For more detailed insights, you can explore Breaking Down Cementos Pacasmayo S.A.A. (CPAC) Financial Health: Key Insights for Investors.

Cementos Pacasmayo S.A.A. (CPAC) Valuation Analysis

Determining whether Cementos Pacasmayo S.A.A. (CPAC) is overvalued or undervalued requires a multifaceted approach, considering various financial ratios, stock performance, and analyst perspectives.

Key valuation ratios for CPAC include:

• Price-to-Earnings (P/E) Ratio: The P/E ratio is at 9.0.
• Price-to-Book (P/B) Ratio: The P/B ratio is at 1.39.
• Enterprise Value-to-EBITDA (EV/EBITDA): The EV/EBITDA ratio is at 18.40.

These ratios provide a snapshot of how the market values CPAC relative to its earnings, book value, and operational cash flow. Comparing these ratios to industry averages can offer insights into whether the stock is trading at a premium or discount.

Analyzing Cementos Pacasmayo S.A.A. (CPAC)'s stock price trends over the past year reveals the following:

• 52-Week High: $6.65
• 52-Week Low: $5.10
• The average stock price for the last 52 weeks is $5.70.

As of April 17, 2025, the stock was trading at $5.41.

Cementos Pacasmayo S.A.A. offers a significant dividend yield. Key considerations include:

• Dividend Yield: The dividend yield is approximately 9.27% to 10.18%.
• Dividend Per Share: The annual dividend is $0.49 per share.
• Payout Ratio: The payout ratio is 84.18%.
• Ex-dividend date: November 21, 2024

The high dividend yield suggests that a significant portion of the company’s earnings is returned to shareholders.

Analysts' opinions on Cementos Pacasmayo S.A.A. (CPAC) stock valuation are mixed:

• Consensus Rating: Moderate Sell
• Average Price Target: $6.00

However, other analysts have a:

• Maximum Price Target: $7.30
• Minimum Price Target: $6.00

This suggests a potential upside from the current price level.

Here's a snapshot of key financial data for Cementos Pacasmayo S.A.A. (CPAC):

Explore more about the company's investors: Exploring Cementos Pacasmayo S.A.A. (CPAC) Investor Profile: Who’s Buying and Why?

Cementos Pacasmayo S.A.A. (CPAC) Risk Factors

Cementos Pacasmayo S.A.A. (CPAC) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, and overall market conditions. Investors need to be aware of these potential challenges. For more insights, consider reading Exploring Cementos Pacasmayo S.A.A. (CPAC) Investor Profile: Who’s Buying and Why?

Industry Competition: The cement industry is highly competitive. CPAC competes with both domestic and international players. Increased competition could lead to price wars, reduced profit margins, and loss of market share. The company must continually innovate and differentiate its products to maintain its competitive edge.

Regulatory Changes: Changes in environmental regulations, labor laws, and tax policies can significantly affect CPAC's operations and financial performance. Stricter environmental standards may require additional investments in cleaner technologies, increasing operational costs. Monitoring regulatory developments is crucial for proactive adaptation.

Market Conditions: Economic downturns, fluctuations in construction activity, and changes in infrastructure spending can impact the demand for cement. A decrease in construction projects due to economic recession could lead to lower sales volumes and reduced profitability. Diversifying markets and maintaining a flexible production capacity can help mitigate these risks.

Operational Risks: These include production disruptions, equipment failures, and supply chain issues. A major breakdown in the production line or a disruption in the supply of raw materials can halt operations, leading to significant financial losses. Robust maintenance programs and diversified sourcing strategies are essential.

Financial Risks: These encompass currency exchange rate fluctuations and interest rate volatility, particularly concerning its debt denominated in U.S. dollars. As of the most recent filings, CPAC has significant exposure to fluctuations in the USD/PEN exchange rate, which can impact its earnings when translated back into Peruvian Soles. Prudent financial management and hedging strategies are necessary to mitigate these risks.

Strategic Risks: These involve challenges related to expansion plans, mergers, and acquisitions. Overpaying for an acquisition or failing to integrate a new business effectively can lead to financial setbacks. Thorough due diligence and careful planning are critical for successful strategic initiatives.

Mitigation strategies often involve a combination of proactive measures. These may include:

• Investing in modern, energy-efficient technologies to reduce environmental impact and operational costs.
• Diversifying into related construction materials and services to reduce dependence on cement sales.
• Implementing robust risk management programs to identify, assess, and mitigate potential threats.
• Maintaining strong relationships with suppliers and customers to ensure stable supply chains and sales channels.
• Engaging with regulatory bodies to stay informed about upcoming changes and advocate for favorable policies.

By understanding and addressing these key risks, Cementos Pacasmayo S.A.A. (CPAC) can better protect its financial health and deliver sustainable value to investors.

Cementos Pacasmayo S.A.A. (CPAC) Growth Opportunities

Cementos Pacasmayo S.A.A. (CPAC) showcases several key growth drivers that underpin its future prospects. These include strategic product innovations, well-considered market expansions, and potential acquisitions that could further solidify its market position.

Future revenue growth projections and earnings estimates suggest a positive trajectory, influenced by ongoing strategic initiatives and partnerships designed to enhance operational efficiency and market reach. Cementos Pacasmayo S.A.A. (CPAC) is also focused on capitalizing on its competitive advantages to foster sustained growth.

Key competitive advantages that position the company for growth include:

• Operational Efficiency: Cementos Pacasmayo S.A.A. (CPAC) has implemented strategies to optimize production costs and streamline operations, providing a competitive edge.
• Market Position: A strong presence in key regional markets allows Cementos Pacasmayo S.A.A. (CPAC) to effectively meet local demand and capitalize on growth opportunities.
• Product Innovation: Continuous development of new and improved cement products ensures Cementos Pacasmayo S.A.A. (CPAC) remains competitive and meets evolving customer needs.

To better illustrate the potential growth, consider the following hypothetical projections:

These projections are based on continued investments in infrastructure projects and housing development in the regions where Cementos Pacasmayo S.A.A. (CPAC) operates. Strategic partnerships and a focus on sustainable practices are also expected to contribute positively to these growth rates.

Furthermore, understanding the company's core values and strategic direction is crucial for investors. You can gain more insights by visiting: Mission Statement, Vision, & Core Values of Cementos Pacasmayo S.A.A. (CPAC).