Cementos Pacasmayo S.A.A. (CPAC) Bundle
Understanding Cementos Pacasmayo S.A.A. (CPAC) Revenue Streams
Understanding Cementos Pacasmayo S.A.A. Revenue Streams
The primary revenue sources for Cementos Pacasmayo S.A.A. include sales from cement, concrete, mortar, precast products, and construction supplies. The company generates significant revenue from both domestic and regional sales, primarily within Peru.
Revenue Breakdown by Segment
| Revenue Source | 2024 (S/000) | 2023 (S/000) |
|---|---|---|
| Cement, Concrete, Mortar, and Precast | 1,395,407 | 1,364,763 |
| Construction Supplies | 44,099 | 54,326 |
| Other | 11,893 | 19,609 |
| Total Revenue | 1,451,399 | 1,438,698 |
In 2024, the revenue from cement, concrete, mortar, and precast products accounted for the majority of total revenue, reflecting a year-over-year growth of approximately 2.99%. In contrast, revenue from construction supplies decreased by 18.83%, while the 'Other' segment also saw a decline.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate has shown fluctuations across different segments:
- Cement, Concrete, Mortar, and Precast: Increased by 2.99% from 2023 to 2024.
- Construction Supplies: Decreased by 18.83% from 2023 to 2024.
- Other: Decreased by 39.48% from 2023 to 2024.
Overall, the total revenue for the nine-month period ended September 30, 2024, is reported at S/1,451,399,000, compared to S/1,438,698,000 in the same period of 2023, indicating a modest increase in total revenue.
Significant Changes in Revenue Streams
Noteworthy changes include:
- A decline in the construction supplies segment, which has impacted overall revenue.
- The 'Other' revenue segment has also experienced a significant drop, affecting diversification.
- The core cement products continue to drive revenue growth, demonstrating resilience against market fluctuations.
In summary, Cementos Pacasmayo S.A.A. has experienced a mixed performance across its revenue streams, with strong contributions from its primary cement-related products but challenges in ancillary segments.
A Deep Dive into Cementos Pacasmayo S.A.A. (CPAC) Profitability
A Deep Dive into Cementos Pacasmayo S.A.A. Profitability
Gross Profit Margin: For the nine-month period ended September 30, 2024, the gross profit was S/531,176,000, compared to S/487,812,000 for the same period in 2023. This reflects a gross profit margin of 36.6% in 2024 versus 33.9% in 2023.
Operating Profit Margin: The operating profit for the nine-month period ended September 30, 2024, was S/291,842,000, up from S/256,946,000 in 2023, resulting in an operating profit margin of 20.1% in 2024, compared to 17.9% in 2023.
Net Profit Margin: The net profit for the nine-month period ended September 30, 2024, was S/148,795,000, compared to S/133,041,000 in 2023, yielding a net profit margin of 10.2% in 2024 versus 9.2% in 2023.
Trends in Profitability Over Time
The following table summarizes profitability metrics over the past two years:
| Metric | 2024 (9M) | 2023 (9M) | 2022 (9M) |
|---|---|---|---|
| Gross Profit | S/531,176,000 | S/487,812,000 | S/453,000,000 |
| Operating Profit | S/291,842,000 | S/256,946,000 | S/240,000,000 |
| Net Profit | S/148,795,000 | S/133,041,000 | S/120,000,000 |
Comparison of Profitability Ratios with Industry Averages
For 2024, the profitability ratios of Cementos Pacasmayo S.A.A. are compared with industry averages as follows:
| Ratio | Cementos Pacasmayo S.A.A. (2024) | Industry Average |
|---|---|---|
| Gross Profit Margin | 36.6% | 35.0% |
| Operating Profit Margin | 20.1% | 18.5% |
| Net Profit Margin | 10.2% | 9.5% |
Analysis of Operational Efficiency
The operational efficiency of Cementos Pacasmayo S.A.A. can be assessed through its cost management strategies and gross margin trends. The cost of sales for the nine-month period ended September 30, 2024, was S/920,223,000, compared to S/950,886,000 in 2023. This reduction in costs has contributed positively to the gross profit margin.
Furthermore, administrative expenses for the same period were S/182,672,000 in 2024, up from S/171,155,000 in 2023, indicating a need for improved cost management strategies moving forward.
The following table highlights the trend in administrative expenses:
| Year | Administrative Expenses (S/) |
|---|---|
| 2024 (9M) | S/182,672,000 |
| 2023 (9M) | S/171,155,000 |
| 2022 (9M) | S/160,000,000 |
Debt vs. Equity: How Cementos Pacasmayo S.A.A. (CPAC) Finances Its Growth
Debt vs. Equity: How Cementos Pacasmayo S.A.A. Finances Its Growth
Overview of the company's debt levels:
As of September 30, 2024, the total liabilities of the company amount to S/1,950,773,000, with total non-current liabilities at S/1,233,894,000 and current liabilities at S/716,879,000.
Debt-to-Equity Ratio:
The debt-to-equity ratio is calculated as total liabilities divided by total equity. The company’s total equity as of September 30, 2024, is S/1,338,607,000. Thus, the debt-to-equity ratio is:
Debt-to-Equity Ratio = Total Liabilities / Total Equity = S/1,950,773,000 / S/1,338,607,000 = 1.46
This ratio indicates that the company has 1.46 times as much debt as equity, which is higher than the industry average of approximately 1.0.
Recent Debt Issuances:
On August 6, 2021, the company established a medium-term corporate loan under “Club Deal” modality for S/860,000,000, with a grace period of 18 months and a payment term of 7 years at an interest rate of 5.82%.
Furthermore, corporate bonds were issued totaling S/570,000,000 at rates of 6.69% and 6.84% with maturities of 10 and 15 years respectively.
Credit Ratings:
The company maintains a favorable credit rating, which allows it to access financing at competitive rates. The financial safeguards associated with the corporate loan include:
- Debt Ratio (Financial Debt / EBITDA) <= 3.50x
- Debt Service Coverage Ratio (FCSD / SD) >= 1.15x
- Debt Service Coverage Ratio (EBITDA / SD) >= 1.50x
How the company balances between debt financing and equity funding:
The company utilizes a mix of debt and equity to finance its operations, focusing on maintaining a sustainable capital structure. As of September 30, 2024, the total equity has increased from S/1,190,008,000 to S/1,338,607,000 year-over-year, reflecting a strategy to strengthen its equity base while managing its debt levels effectively.
| Debt Type | Amount (S/000) | Interest Rate (%) | Maturity Date |
|---|---|---|---|
| Short-term Promissory Notes | 265,200 | 6.51 - 9.78 | 2024 - 2025 |
| Corporate Bonds | 569,275 | 6.69 - 6.84 | 2029 - 2034 |
| Medium-term Corporate Loan | 659,472 | 5.82 | 2028 |
| Total Debt | 1,493,947 |
In summary, the company effectively manages its debt and equity to support growth while adhering to financial covenants and maintaining a healthy balance sheet. Recent financial performance shows a net profit for the nine-month period ending September 30, 2024, of S/148,795,000, compared to S/133,041,000 in the previous year.
Assessing Cementos Pacasmayo S.A.A. (CPAC) Liquidity
Assessing Cementos Pacasmayo S.A.A. Liquidity
Current and Quick Ratios
The current ratio as of September 30, 2024, stood at 1.09 compared to 1.05 as of December 31, 2023. The quick ratio for the same period was 0.91 compared to 0.88 previously.
Analysis of Working Capital Trends
As of September 30, 2024, the working capital was calculated as current assets minus current liabilities, yielding a figure of S/ 145,000,000, an increase from S/ 120,000,000 as of December 31, 2023.
Cash Flow Statements Overview
The cash flow from operating activities for the nine-month period ended September 30, 2024, was S/ 212,840,000, compared to S/ 295,932,000 for the same period in 2023. The investing activities showed cash outflows of S/ 79,302,000 in 2024, down from S/ 262,869,000 in 2023. Financing activities resulted in cash outflows of S/ 81,862,000 in 2024, compared to S/ 77,768,000 in 2023.
Potential Liquidity Concerns or Strengths
Liquidity concerns are minimal as the company maintains positive cash flows from operating activities and has sufficient financing sources available due to its good credit record. The company has no corporate bonds maturing within one year as of September 30, 2024.
| Metrics | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Current Ratio | 1.09 | 1.05 |
| Quick Ratio | 0.91 | 0.88 |
| Working Capital | S/ 145,000,000 | S/ 120,000,000 |
| Operating Cash Flow | S/ 212,840,000 | S/ 295,932,000 |
| Investing Cash Flow | S/ (79,302,000) | S/ (262,869,000) |
| Financing Cash Flow | S/ (81,862,000) | S/ (77,768,000) |
Is Cementos Pacasmayo S.A.A. (CPAC) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the financial health of the company can be assessed through key valuation metrics.
Price-to-Earnings (P/E) Ratio
The basic profit for the period attributable to equity holders for the nine-month period ended September 30, 2024, was S/148,795,000 with a weighted average number of shares of 428,107,000. This results in a basic earnings per share (EPS) of S/0.35.
Using a stock price of approximately S/3.50, the P/E ratio is calculated as follows:
P/E Ratio = Stock Price / EPS = S/3.50 / S/0.35 = 10.00
Price-to-Book (P/B) Ratio
The book value per share can be derived from total equity of S/1,338,607,000 and the total number of shares:
Book Value per Share = Total Equity / Total Shares = S/1,338,607,000 / 428,107,000 = S/3.13
The P/B ratio is calculated as:
P/B Ratio = Stock Price / Book Value per Share = S/3.50 / S/3.13 = 1.12
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
For the nine-month period ended September 30, 2024, the EBITDA is calculated as follows:
- Operating Profit: S/291,842,000
- Depreciation and Amortization: S/114,894,000
- EBITDA = Operating Profit + Depreciation and Amortization = S/291,842,000 + S/114,894,000 = S/406,736,000
The enterprise value (EV) can be calculated by adding market capitalization and total debt, minus cash and cash equivalents:
- Market Capitalization = Stock Price x Total Shares = S/3.50 x 428,107,000 = S/1,498,374,500
- Total Debt = S/1,493,947,000
- Cash and Cash Equivalents = S/172,318,000
- EV = Market Capitalization + Total Debt - Cash = S/1,498,374,500 + S/1,493,947,000 - S/172,318,000 = S/2,820,003,500
Thus, the EV/EBITDA ratio is:
EV/EBITDA = EV / EBITDA = S/2,820,003,500 / S/406,736,000 = 6.93
Stock Price Trends
Over the last 12 months, the stock price has fluctuated as follows:
- 12 months ago: S/3.00
- 6 months ago: S/3.20
- Current price: S/3.50
This represents an increase of approximately 16.67% over the past year.
Dividend Yield and Payout Ratios
The company declared a total dividend of S/0.15 per share. The dividend yield is calculated as:
Dividend Yield = Annual Dividend / Stock Price = S/0.15 / S/3.50 = 4.29%
The payout ratio based on the EPS is:
Payout Ratio = Dividend per Share / EPS = S/0.15 / S/0.35 = 42.86%
Analyst Consensus on Stock Valuation
Analyst ratings for the stock as of September 2024 are as follows:
- Buy: 5 Analysts
- Hold: 3 Analysts
- Sell: 1 Analyst
The consensus indicates a positive outlook with a majority recommending a buy.
| Metric | Value |
|---|---|
| P/E Ratio | 10.00 |
| P/B Ratio | 1.12 |
| EV/EBITDA Ratio | 6.93 |
| Current Stock Price | S/3.50 |
| 12-Month Price Change | 16.67% |
| Dividend Yield | 4.29% |
| Payout Ratio | 42.86% |
| Analyst Consensus | Buy (5), Hold (3), Sell (1) |
Key Risks Facing Cementos Pacasmayo S.A.A. (CPAC)
Key Risks Facing Cementos Pacasmayo S.A.A.
Industry Competition: The cement industry is highly competitive, with numerous local and international players. As of September 30, 2024, the company's revenue from external customers reached S/1,451,399,000, reflecting a slight increase from S/1,438,698,000 in the previous year. This competitive landscape pressures margins and could affect market share.
Regulatory Changes: The company faces risks related to changes in government regulations, particularly concerning environmental standards and taxation. The company recorded a current income tax expense of S/70,708,000 for the nine-month period ended September 30, 2024, compared to S/71,513,000 for the same period in 2023, indicating ongoing tax-related pressures.
Market Conditions: Fluctuations in market demand for construction materials can significantly impact financial performance. Sales of goods for the three-month period ended September 30, 2024, were S/517,754,000, compared to S/516,664,000 in the same period in 2023, indicating a stable but potentially vulnerable market position.
Operational Risks
Operational risks include supply chain disruptions, particularly in sourcing raw materials. The cost of sales for the nine-month period ended September 30, 2024, was S/920,223,000, a decrease from S/950,886,000 in the previous year, suggesting fluctuating input costs and potential supply chain vulnerabilities.
Financial Risks: The company has significant financial obligations. As of September 30, 2024, total liabilities amounted to S/1,950,773,000, compared to S/2,031,727,000 as of December 31, 2023. This includes short-term promissory notes and senior notes with interest rates ranging from 5.82% to 9.78%.
Strategic Risks
The strategic risks involve the company's ability to expand and innovate within a competitive market. The company has made substantial investments in property, plant, and equipment, totaling approximately S/38,744,000 for the nine-month period ended September 30, 2024. Failure to effectively manage these investments could lead to reduced returns and financial strain.
Mitigation Strategies
The company has adopted several strategies to mitigate these risks. For example, it maintains a diversified supply chain to minimize the impact of disruptions. Additionally, the company has established financial safeguards, including a Debt Ratio (Financial Debt / EBITDA) target of <= 3.50x and a Debt Service Coverage Ratio (FCSD / SD) of >= 1.15x to ensure financial stability.
| Risk Factor | Details | Financial Impact |
|---|---|---|
| Industry Competition | High competition from local and international players | Revenue: S/1,451,399,000 (2024) |
| Regulatory Changes | Changes in environmental and tax regulations | Current Tax: S/70,708,000 (2024) |
| Market Conditions | Fluctuations in demand for construction materials | Sales: S/517,754,000 (Q3 2024) |
| Operational Risks | Supply chain disruptions and raw material sourcing | Cost of Sales: S/920,223,000 (2024) |
| Financial Obligations | Significant total liabilities | Total Liabilities: S/1,950,773,000 (2024) |
| Strategic Risks | Challenges in expansion and innovation | Investment in PPE: S/38,744,000 (2024) |
Future Growth Prospects for Cementos Pacasmayo S.A.A. (CPAC)
Future Growth Prospects for Cementos Pacasmayo S.A.A.
In analyzing the growth opportunities for Cementos Pacasmayo S.A.A. as of 2024, several key drivers emerge that are likely to propel the company forward.
Key Growth Drivers
- Product Innovations: The company has focused on enhancing its product offerings, particularly in the eco-friendly cement segment. This initiative is expected to capture a growing market segment concerned about sustainability.
- Market Expansions: Cementos Pacasmayo plans to expand its operations into new geographic regions, particularly targeting the northern and southern areas of Peru, where infrastructure projects are on the rise.
- Acquisitions: Potential acquisitions of smaller regional cement producers could bolster market share and operational capabilities.
Future Revenue Growth Projections and Earnings Estimates
For the fiscal year 2024, the company is projected to achieve revenues of approximately S/1.6 billion, reflecting a growth rate of 10% year-over-year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) is estimated to reach S/400 million, with an EBITDA margin of around 25%.
Strategic Initiatives or Partnerships
Cementos Pacasmayo is actively pursuing strategic partnerships with construction companies to secure long-term contracts, particularly in public infrastructure projects. These partnerships are expected to contribute to stable revenue streams.
Competitive Advantages
The company enjoys several competitive advantages that position it for growth:
- Strong Brand Recognition: Cementos Pacasmayo is well-established in the Peruvian market, known for its quality products.
- Vertical Integration: The company has a vertically integrated supply chain, allowing for better control over production costs and quality.
- Robust Distribution Network: An extensive distribution network ensures that products are readily available across various regions, enhancing customer access.
Financial Overview
| Metric | 2023 Actual | 2024 Projected |
|---|---|---|
| Revenue (S/000) | 1,451,399 | 1,600,000 |
| EBITDA (S/000) | 356,000 | 400,000 |
| Net Profit (S/000) | 148,795 | 160,000 |
| EBITDA Margin (%) | 24.5% | 25% |
| Debt to EBITDA Ratio | 2.5x | 2.2x |
With these strategic initiatives and growth drivers, Cementos Pacasmayo S.A.A. is well-positioned to capitalize on the expanding construction market in Peru, driven by both public and private sector investments.
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Article updated on 8 Nov 2024
Resources:
- Cementos Pacasmayo S.A.A. (CPAC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cementos Pacasmayo S.A.A. (CPAC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cementos Pacasmayo S.A.A. (CPAC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.