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 Date: December 13, 2018
Subject: Monthly Position of Financial Derivatives as of November 30, 2018.
Key Financial Metrics
This filing focuses exclusively on financial derivative instruments and does not provide consolidated revenue, profit, cash flow, or general liquidity metrics for the company.
| Metric | Value (PEN) | Notes |
|---|---|---|
| Cross Currency Swap Notional Amount | USD 300,000,000 | Total coverage for corporate bond liability. |
| Fair Value (Current Month) | 34,369,000 | As of November 30, 2018. |
| Fair Value (Previous Month) | 29,610,000 | As of October 31, 2018. |
| Cumulative Profit/Loss (2018 YTD) | -29,636,000 | Total loss due to derivative financial instruments. |
Material Changes and Components
The cumulative loss of PEN 29,636,000 for the year ended November 30, 2018, is derived from the following components:
- Unrealized Exchange Rate Loss: PEN 41,100,000 loss due to holding bonds in U.S. dollars.
- Fair Value Increase: PEN 33,880,000 increase in fair value of derivative instruments (includes PEN 1,823,000 due to counterparty risk).
- Deferred Income Tax: PEN 2,130,000 benefit.
- Accrued Commissions: PEN 24,546,000 expense from Cross Currency Swap contracts.
Accounting Treatment: The fair value increase, exchange rate loss, and deferred tax are recorded in equity accounts (except counterparty risk, recorded in financial cost). Commissions are recorded as interest expense in the profit and loss account.
Outlook, Risks, and Unusual Items
Valuation Methodology: Fair value amounts for Cross Currency Swaps are estimated internally using International Financial Reporting Standards (IFRS) and market data. The filing explicitly states these figures are preliminary and subject to change.
Risk Factors: The filing highlights exposure to currency fluctuations (USD/PEN) and counterparty risk associated with the derivative instruments.
Guidance: The filing text does not provide forward-looking guidance or management commentary regarding future operational performance.
Investor Verification Checklist
- Verify the final audited figures for the 2018 fiscal year, as the derivative fair values in this filing are preliminary.
- Confirm the impact of the PEN 24,546,000 in accrued commissions on the company's reported interest expense and net income.
- Review the full 20-F annual report for consolidated revenue, EBITDA, and total debt levels, which are not included in this 6-K.
- Assess the company's hedging strategy effectiveness given the PEN 41,100,000 unrealized exchange rate loss.