Business Context and Reporting Period
Company: CEMENTOS PACASMAYO S.A.A. (Pacasmayo Cement Corporation)
Jurisdiction: Republic of Peru
Filing Type: Form 6-K (Report of Foreign Issuer)
Reporting Period: Monthly position as of December 31, 2018, filed on January 15, 2019.
Subject: Disclosure of the monthly position of financial derivatives, specifically Cross Currency Swaps (CCS).
Key Financial Metrics
The filing focuses exclusively on derivative instruments and does not provide consolidated revenue, profit, cash flow, or general liquidity metrics.
- Derivative Instrument: Cross Currency Swaps (CCS).
- Total Notional Amount (Current Month): USD 132 million (hedging corporate bond) + USD 18 million (negotiation/coverage) + USD 70 million (negotiation).
- Cumulative Gain/Loss (2018): PEN -37,238,000 (Loss).
- Fair Value (Current Month):
- USD 132 MM Hedge: PEN 9,474,000 (Liability).
- USD 18 MM Negotiation/Coverage: PEN 1,324,000.
- USD 70 MM Negotiation: PEN 1,469,865.
- Settlement Activity: USD 150 million of CCS hedging due in 2023 was settled during December 2018.
Material Changes vs. Prior Period
Significant activity occurred in December 2018 compared to the prior month:
- Settlement: A portion of the hedging portfolio (USD 150 million) was settled in December 2018, reducing the outstanding notional amount.
- Position Shift: The USD 18 million instrument shifted from a "Coverage" (hedge) classification in the previous month to "Negotiation" (trading) in the current month, with the underlying asset liquidated.
- Accumulated Loss: The company recorded a total cumulative loss of PEN 37,238,000 for the year 2018 related to all derivative financial instruments.
Guidance, Risks, and Unusual Items
Valuation Methodology: Fair values for Cross Currency Swaps are estimated internally using International Financial Reporting Standards (IFRS) and market data. The filing explicitly states these amounts are preliminary and subject to change.
Accounting Treatment: The cumulative profit/loss includes variations in fair value, exchange differences, deferred income, and accrued commissions. These are recorded in both the statement of profit and loss and other comprehensive income.
Risk Context: The derivatives are primarily used to hedge corporate bond liabilities (USD) against the Peruvian Sol (PEN), indicating exposure to currency exchange rate fluctuations.
Investor Verification Checklist
- Verify the final audited impact of the PEN 37.2 million derivative loss on the 2018 consolidated net income.
- Confirm the remaining notional exposure after the USD 150 million settlement in December 2018.
- Review the full 2018 Form 20-F for consolidated revenue, EBITDA, and total debt figures, as this 6-K only covers derivatives.
- Assess the sensitivity of future earnings to PEN/USD exchange rate movements given the active hedging program.