Business Context and Reporting Period
Company: CEMENTOS PACASMAYO S.A.A. (Pacasmayo Cement Corporation)
Filing Type: Form 6-K (Report of Foreign Issuer)
Reporting Period: Monthly update as of September 30, 2017, filed on October 16, 2017.
Jurisdiction: Republic of Peru
Subject: Disclosure of the monthly position of financial derivatives.
Key Financial Metrics
The filing focuses exclusively on financial derivative instruments and does not provide consolidated revenue, profit, cash flow, or general liquidity metrics.
| Metric | Value (PEN) | Notes |
|---|---|---|
| Cross Currency Swaps Notional Amount | USD 300 Million | Used to cover corporate bond liability. |
| Fair Value (Current Month) | 9,836,000 | As of September 30, 2017. |
| Fair Value (Previous Month) | 40,206,000 | As of August 31, 2017. |
| Cumulative Profit/Loss (YTD) | -42,184,000 | Total accumulated loss for 2017. |
Material Changes and Components of Loss
The cumulative loss of PEN 42,184,000 for the year ended September 30, 2017, is composed of the following specific items:
- Decline in Fair Value: PEN 60,076,000 loss (includes PEN 2,825,000 attributed to counterparty risk).
- Unrealized Exchange Rate Gain: PEN 27,900,000 gain from holding U.S. dollar-denominated bonds.
- Deferred Income Tax: PEN 9,492,000 benefit.
- Accrued Commissions: PEN 19,500,000 expense recorded as interest expense.
Accounting Treatment: The fair value decline, exchange rate gain, and deferred tax are recorded in equity accounts (Other Comprehensive Income), except for the counterparty risk which is recorded in financial income. Commissions are recorded in the profit and loss account.
Management Commentary and Risks
Valuation Methodology: Fair values for Cross Currency Swaps are estimated internally using International Financial Reporting Standards (IFRS) and market data-based valuation techniques.
Contingency: The reported amounts are preliminary and subject to change.
Risk Factors: The filing explicitly notes a counterparty risk component of PEN 2,825,000 within the fair value decline.
Investor Verification Checklist
- Verify the preliminary nature of the fair value estimates and potential for future adjustments.
- Confirm the impact of the PEN 19,500,000 commission expense on the current period's interest expense and net income.
- Review the counterparty risk exposure of PEN 2,825,000 and the creditworthiness of the swap counterparties.
- Check subsequent filings for the finalization of the fair value calculations as of September 30, 2017.