Peru's Cementos Pacasmayo saw its second quarter profit drop 29% as sales costs, revenues and production all rose.

Net income was 31.3mn soles (US$9.5mn) compared with 44.3mn soles a year earlier, while sales climbed 9% to 302mn soles from 276mn, the NYSE-traded cement company said in a corporate filing with local securities regulator SMV.

Pacasmayo's sales costs rose 15.4% in the quarter to 144mn soles. The company, which took out US$300mn in cross currency swaps to lessen currency devaluation risk, had 125mn soles in cash and 987mn soles in debt through June 30.

Cement production rose 11.2% to 570,400t as demand from public works accelerated, the company said. Clinker production jumped by half to 456,200t, while quicklime output rose 59% to 48,000t.

Capex totaled 78.1mn soles through the first half, mostly on the company's US$386mn Piura cement plant and its US$500mn Fospac phosphates project.

Pacasmayo, which in 2012 raised US$230mn from an ADR sale and issued US$300mn in bonds in 2013 to help finance its projects, started up production in September at the Piura plant, which will boost the company's capacity by 70% as it gears up to handle growing demand from infrastructure projects.

The 1.6Mt/y plant on Peru's north coast, which adds to its Pacasmayo and Rioja operations, also has capacity for 1Mt/y of clinker. The company said the plant was operating at 57.3% of installed cement capacity and 65.6% of clinker capacity in the quarter.

Pacasmayo, which competes with Cementos Yura and Unacem, had its outlook raised to positive from stable by US ratings agency Standard & Poor's in February.

The company is counting on rising demand from an estimated US$23bn in investment projects in northern Peru over the next five years, including the US$3.5bn Talara refinery expansion, the Chavimochic III irrigation project and the longitudinal highway.

President-elect Pedro Pablo Kuczynski, who is to take office July 28 after winning last month's elections, has pledged to fast track US$25bn in delayed infrastructure projects.

 

Source: BNamericas

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