Business Context and Reporting Period
Cementos Pacasmayo S.A.A. (Pacasmayo Cement Corporation), a Peruvian foreign issuer, filed Form 6-K on August 13, 2019. The filing serves as a monthly report to the Superintendency of Securities (SMV) regarding the position of financial derivatives as of July 31, 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 Loss (YTD 2019): PEN -14,819,000 (Total profit/loss due to derivative financial instruments).
- Cross Currency Swaps (Coverage): Notional amount of USD 132 million hedging corporate bond liabilities. Fair value as of July 31, 2019: PEN -4,523,943 (Liability).
- Cross Currency Swaps (Negotiation): Notional amount of USD 18 million hedging exchange rate risk. Fair value as of July 31, 2019: PEN -632,057 (Liability).
Material Changes Versus Prior Period
The fair value of derivative instruments shifted from a net asset position in June 2019 to a net liability position in July 2019.
- Coverage Swaps: Fair value decreased from an asset of PEN 2,376,913 in June to a liability of PEN -4,523,943 in July.
- Negotiation Swaps: Fair value decreased from an asset of PEN 332,087 in June to a liability of PEN -632,057 in July.
- YTD Impact: The cumulative loss for the year reached PEN -14,819,000 as of July 31, 2019.
Guidance, Outlook, and Risks
The filing contains no management guidance, outlook, or general risk factors beyond the specific disclosure of derivative valuations.
- 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: Cumulative profit/loss includes variations in fair value, exchange differences, deferred income, and accrued commissions 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 150 million total notional derivative portfolio, as the reported figures are preliminary.
- Confirm the impact of the PEN -14.8 million cumulative derivative loss on the company's full-year net income and other comprehensive income.
- Review the underlying corporate bond liabilities (USD 132 million) to assess the effectiveness of the hedging strategy given the shift to a liability position.
- Check subsequent filings for updated exchange rate movements affecting the PEN/USD cross-currency swaps.