Cementos Pacasmayo S.A.A. Q4 Earnings Call Highlights

by · The Markets Daily

Cementos Pacasmayo S.A.A. (NYSE:CPAC) executives highlighted record full-year profitability, continued volume momentum and progress on sustainability initiatives during the company’s fourth-quarter 2025 earnings call, while also addressing the pending change-of-control transaction announced with Holcim.

Holcim agreement and regulatory process

CEO Humberto Nadal opened the call by emphasizing the December 16 announcement of an agreement for Holcim to acquire Inversiones ASPI, which management said holds a 50.01% controlling stake in Cementos Pacasmayo. Nadal said the agreed valuation was PEN 5.1 billion, representing a multiple of 9x “record EBITDA,” calculated based on the last twelve months ending July 2025. The transaction is pending regulatory approvals and is expected to close in the coming months.

In response to analyst questions, management said the company is awaiting approval from Peru’s competition authority, Indecopi, and described the process as running smoothly. Nadal said the company does not see issues arising in the approval process, though he noted that this was all the company could comment at this stage.

Executives also addressed questions about acquisition-related expenses recognized by the company in connection with the transaction. Management attributed most of these costs to change-of-control provisions and contractual obligations that have been in place for many years. Nadal said the matter was discussed and approved by the board, and that management considered the expenses reasonable given the price achieved for the shares. Management added that part of the transaction expenses would be assumed by the buyer, and indicated that some of the amounts would be derived from the price.

Additionally, the company noted that following the acquisition of ASPI, Holcim is required by law to launch an OPA (tender offer) for a portion of the remaining shares. Management said the board viewed the transaction as one that would benefit all shareholders, not only the controlling shareholder, and stated that the tender price must be at least the price paid for the controlling shares.

Volume growth and record full-year EBITDA

Nadal said the company continued to post “very strong momentum” in sales volumes, with an 8.2% increase in the quarter versus the prior-year period and a 7.2% increase for full-year 2025 relative to 2024. He attributed the growth primarily to stronger demand for infrastructure projects and “very consistent” performance in the self-construction segment.

Excluding one-off expenses related to the share purchase agreement with Holcim, the company reported quarterly EBITDA of PEN 158.7 million, up 11.4% year over year, which management said reflected disciplined execution and cost-efficiency efforts. For full-year 2025, Pacasmayo reported all-time high EBITDA of PEN 584.2 million, up 6.4% year over year when excluding one-off expenses.

Financial details: revenue, margins, and segment performance

CFO Ely Hayashi said revenue increased 6.2% year over year to PEN 559.5 million, driven by higher sales of bagged cement and increased sales of concrete and pavement for infrastructure projects. She said gross profit rose 11.4% year over year, primarily due to lower raw material costs, higher consumption of the company’s own clinker, and operational efficiencies tied to maintenance and production planning. Consolidated EBITDA (excluding transactional expenses) increased 11.4% to PEN 158.7 million.

For full-year 2025, Hayashi said revenue rose 7% versus 2024 and gross profit increased 10.8%, citing the same drivers: lower raw material costs, greater use of own clinker, and operational efficiency. Full-year EBITDA, excluding one-off transactional expenses, increased 6.4% year over year.

Operating expense trends were mixed. Hayashi said administrative expenses increased 5.7% and were up 50% for full-year 2025 compared to the corresponding period in 2024, mainly due to higher personnel expenses stemming from collective bargaining negotiations with the labor union. Selling expenses declined 8.3% in the fourth quarter year over year due to lower depreciation and reduced advertising and promotional spending, but increased 40% for full-year 2025, driven by higher advertising and promotion expenses during the first nine months of the year, as well as costs associated with the union-related items discussed on the call.

On product categories, the company reported the following trends:

  • Cement: Fourth-quarter cement sales increased 13.6%, driven by strong demand for bagged cement in self-construction. Full-year cement sales rose 8.7% compared to 2024, which management linked to continued strength in the agro-industrial and fishing sectors in northern Peru. Gross margin increased 0.4 percentage points in the quarter and 1.9 percentage points for the full year, attributed mainly to lower raw material costs and lower consumption of imported clinker.
  • Concrete, pavement, and mortar: Fourth-quarter sales declined 25.1% year over year due to lower sales volumes after the Motupe Riverbank Defense Project was put on standby, though management said the project has been prioritized to restart in the near future. Full-year sales increased 6.3% due to higher mortar and concrete volumes for infrastructure projects. Gross margin fell 7.8 percentage points in the quarter and 3.2–3.3 percentage points for the full year, attributed to execution of the Piura Airport project and lower fixed-cost dilution following the Motupe pause.
  • Precast: Fourth-quarter sales decreased 16% due to lower volumes and a difficult comparison to fourth-quarter 2024, when a road improvement project boosted results. Full-year precast sales increased 3% due to higher public-sector demand. Gross margin improved 5.4 percentage points in the quarter and 1.7 percentage points for the year, which management tied to pricing and improved fixed-cost dilution.

Hayashi said consolidated net income for the quarter was negative due to transactional expenses, but excluding those one-offs, net income would have been PEN 59.8 million, up 19.6% year over year. For full-year 2025, excluding one-offs, net income would have been PEN 231.8 million, an increase of 16.5% compared to 2024.

The company’s net debt to EBITDA ratio was 2.8x. Hayashi said Pacasmayo continued reducing debt through amortization payments, partially offset by lower EBITDA.

Outlook: margins, project cadence, and efficiencies

In Q&A, management was asked about the impact of the Motupe project pause and whether similar disruptions or margin pressure could persist. Nadal said each concrete project has its own dynamics, but added that the company expects EBITDA margins to remain around the levels achieved over the last year, “maybe a little bit higher.” He said energy-saving projects expected in the second quarter or second half of the year should support margins.

Management also pointed to typical seasonality in public spending, saying authorities often spend slowly at the beginning of the year, and noted elections in the near term, which management suggested could influence the timing of increased activity later in the year.

When asked about 2026 expectations, management did not provide specific numerical guidance but said it expects the year to be stronger than 2025 in terms of volumes, while maintaining a competitive pricing position that has supported margins. Nadal reiterated optimism that EBITDA margins would remain stable, with potential upside from efficiencies including energy initiatives expected in the second half of the year.

Sustainability recognition

Nadal also highlighted progress on decarbonization and sustainability rankings. He said the company earned three-star recognition from Peru’s Ministry of Environment (MINAM) through the Peru Carbon Footprint Platform, which he described as recognizing consecutive years of reduced greenhouse gas emissions based on verified data submitted for the 2022–2024 period. He said the Rioja plant earned its third star for 2024 emissions reductions, following prior recognition for Pacasmayo and Piura plants for 2023 performance.

The company also noted it was recognized for the 10th consecutive year as the industry leader in the Merco ESG Sustainability Ranking and placed ninth overall in Merco’s ranking of the most responsible companies in Peru.

In closing remarks, Nadal said Holcim’s investment was a validation of the company’s strategy and Peru’s long-term growth potential, and he expressed confidence the transaction would bring benefits for stakeholders including shareholders, employees, communities, and the country.

About Cementos Pacasmayo S.A.A. (NYSE:CPAC)

Cementos Pacasmayo SAA. is a Peru‐based cement and construction materials company engaged in the production, distribution and sale of cement and related products. The company’s core activities include manufacturing ordinary portland cement, hydrated lime and other industrial minerals. It serves the building and infrastructure sectors, offering tailored solutions for public works, residential and commercial construction projects.

Founded in 1949 in the coastal city of Pacasmayo, the company has grown into one of Peru’s leading cement producers.

Further Reading