Business Context and Reporting Period
Cementos Pacasmayo S.A.A. (Pacasmayo Cement Corporation), a Peruvian foreign issuer, filed this Form 6-K on July 17, 2019. The filing serves as an annex to the "Year of the Fight Against Corruption and Impunity" and specifically discloses the monthly position of financial derivatives as of June 30, 2019.
Key Financial Metrics
The filing focuses exclusively on financial derivative instruments and does not provide consolidated revenue, profit, cash flow, or debt figures for the company.
- Derivative Cumulative P&L: A total loss of PEN 3,007,000 for the year ended June 30, 2019.
- Cross Currency Swaps (Coverage): Notional amount of USD 132 million hedging corporate bond liabilities. Fair value liability was PEN 2,376,913 in the current month (June 2019) compared to PEN 13,530,591 in the previous month.
- Cross Currency Swaps (Negotiation): Notional amount of USD 18 million for exchange rate management. Fair value liability was PEN 332,087 in the current month compared to PEN 1,890,409 in the previous month.
Material Changes
Significant fluctuations in the fair value of derivative liabilities were observed between the previous month and June 2019:
- The fair value liability for coverage swaps decreased by approximately PEN 11.15 million.
- The fair value liability for negotiation swaps decreased by approximately PEN 1.56 million.
- The cumulative loss for the year stands at PEN 3.007 million, incorporating variations in fair value, exchange differences, deferred income, and accrued commissions.
Guidance, Risks, and Unusual Items
The filing contains no forward-looking guidance, management commentary on operations, or specific risk factors beyond the inherent nature of derivative trading.
- Valuation Methodology: Fair values are estimated internally using IFRS and market data. The filing explicitly states these amounts are preliminary and subject to change.
- Accounting Treatment: Derivative impacts are recorded in both the statement of profit and loss and other comprehensive income.
Investor Verification Checklist
- Verify the final audited fair value of the USD 132 million and USD 18 million swap contracts, as the reported figures are preliminary.
- Confirm the impact of the PEN 3,007,000 cumulative derivative loss on the company's overall net income for the period.
- Review the underlying corporate bond liabilities being hedged to assess the effectiveness of the coverage strategy.
- Check subsequent filings for updates on the "preliminary" valuation adjustments mentioned in the notes.