Business Context and Reporting Period
Cementos Pacasmayo S.A.A., a Peruvian cement corporation, filed this Form 6-K on May 15, 2017. The report covers the month of May 2017 and provides specific financial derivative data as of April 30, 2017.
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 Instrument: Cross Currency Swaps.
- Notional Amount: USD 300 million (hedging corporate bond liability).
- Fair Value (April 30, 2017): PEN 52,993,000 (Current Month) vs. PEN 46,158,000 (Previous Month).
- Cumulative Profit/Loss (Year-to-Date): PEN 3,778,000 gain.
Material Changes and Derivative Valuation
The fair value of the Cross Currency Swaps increased by approximately PEN 6.8 million from the previous month to April 30, 2017. The year-to-date cumulative profit/loss of PEN 3,778,000 is derived from the following components:
- Decline in Fair Value: PEN 16,919,000 loss (includes PEN 2,168,000 due to counterparty risk).
- Unrealized Exchange Rate Gain: PEN 34,200,000 gain on dollar-denominated bonds.
- Deferred Income Tax: PEN 5,098,000 reduction.
- Commissions: PEN 8,405,000 expense recorded as interest expense.
Most valuation items are recorded in equity accounts, except for counterparty risk (financial income) and commissions (interest expense).
Outlook, Risks, and Contingencies
The filing notes that fair value amounts for Cross Currency Swaps are estimated internally using IFRS and market data. These figures are preliminary and subject to change. The company utilizes these derivatives specifically for hedging its USD 300 million corporate bond liability.
Investor Verification Checklist
- Verify the preliminary nature of the derivative fair value estimates and potential future adjustments.
- Confirm the impact of the PEN 8,405,000 commission expense on the company's interest costs.
- Review the full 20-F annual report for consolidated revenue, profit, and total debt figures, as this 6-K only details derivative positions.
- Assess the counterparty risk exposure of PEN 2,168,000 included in the fair value decline.