Business Context and Reporting Period
Cementos Pacasmayo S.A.A. (Pacasmayo Cement Corporation), a Peruvian cement manufacturer, filed this Form 6-K on April 19, 2017. The report covers the month of April 2017 and provides specific financial data regarding derivative instruments as of March 31, 2017.
Key Financial Metrics
The filing focuses exclusively on the position of financial derivatives and does not provide consolidated revenue, profit, cash flow, or general liquidity metrics for the period.
- Derivative Instrument: Cross Currency Swaps.
- Notional Amount: USD 300 million.
- Purpose: Coverage for a corporate bond liability.
- Underlying Liability: Corporate bond denominated in Peruvian Soles (PEN).
- Fair Value (Current Month): PEN 46,158,000 (Liability).
- Fair Value (Previous Month): PEN 62,513,000 (Liability).
- Accumulated Profit/Loss (Year-to-Date): PEN 496,000 (Net gain).
Material Changes
The fair value of the Cross Currency Swaps liability decreased from PEN 62,513,000 in the previous month to PEN 46,158,000 as of March 31, 2017. This reduction in liability fair value reflects a net positive movement in the derivative position for the period.
Management Commentary and Unusual Items
The filing details the components of the cumulative profit/loss for derivative financial instruments as of March 31, 2017:
- Decline in Fair Value: PEN 23,754,000 loss (includes PEN 1,123,000 attributed to counterparty risk).
- Unrealized Exchange Rate Gain: PEN 33,300,000 gain from holding dollar-denominated bonds.
- Deferred Income Tax: PEN 2,816,000 expense.
- Commissions: PEN 6,234,000 expense recorded as interest expense in the profit and loss account.
Management notes that the first three items are recorded in equity accounts, while commissions are recorded in the profit and loss statement. Valuations are estimated internally using IFRS and market data and are subject to change.
Investor Verification Checklist
- Verify the impact of the PEN 6,234,000 commission expense on the company's reported interest costs and net income.
- Confirm the counterparty risk exposure of PEN 1,123,000 and its treatment in financial income.
- Review the full 20-F annual report for consolidated revenue, EBITDA, and total debt figures, as this 6-K filing does not contain them.
- Monitor the volatility of the PEN/USD exchange rate, which drives the unrealized gains/losses on the USD 300 million hedged position.