Business Context and Reporting Period
Cementos Pacasmayo S.A.A. (Pacasmayo Cement Corporation), a Peruvian issuer, filed this Form 6-K on January 15, 2018, covering the month of December 2017. The filing serves as a report on the monthly position of financial derivatives as of December 31, 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's core operations.
- Derivative Instrument: Cross Currency Swaps.
- Notional Amount: USD 300 million (total).
- Purpose: Coverage for corporate bond liability.
- Current Month Fair Value: PEN 489,000 (Liability).
- Previous Month Fair Value: PEN -5,002,000.
- Total Cumulative Profit/Loss (2017): PEN -50,760,000.
Material Changes and Composition of Loss
The total cumulative loss of PEN 50,760,000 for 2017 is derived from the following components:
- Decline in Fair Value: PEN 69,423,000 (includes PEN 3,307,000 attributed to counterparty risk).
- Unrealized Exchange Rate Gain: PEN 34,500,000 (due to holding USD-denominated bonds).
- Deferred Income Tax: PEN 10,302,000.
- Accrued Commissions: PEN 26,139,000 (recorded as interest expense).
Accounting treatment varies: the fair value decline, exchange gain, and tax items are recorded in equity accounts (except counterparty risk, which is in financial income), while commissions are recorded in the profit and loss account.
Outlook, Risks, and Unusual Items
The filing notes that fair value amounts for the Cross Currency Swaps are estimated internally using IFRS and market data. These figures are preliminary and subject to change. The filing does not contain management commentary on future business outlook, general risk factors, or guidance beyond the derivative valuation specifics.
Investor Verification Checklist
- Verify the impact of the PEN 26,139,000 in accrued commissions on the company's reported interest expense and net income for 2017.
- Confirm the final audited fair value of the derivatives, as the filing states current figures are preliminary estimates.
- Review the full 2017 annual report (Form 20-F) to understand how the PEN 50,760,000 cumulative loss affects total equity and comprehensive income.
- Assess the counterparty risk exposure of PEN 3,307,000 included in the fair value decline.