Business Context and Reporting Period
Cementos Pacasmayo S.A.A. (CPAC) is a Peruvian cement manufacturer and the sole producer serving the northern region of Peru. The company operates three production facilities (Pacasmayo, Piura, and Rioja) with a total installed cement capacity of approximately 4.9 million metric tons. The reporting period covers the fiscal year ended December 31, 2025. The filing was submitted to the SEC on April 27, 2026.
A material event occurred subsequent to the reporting period: On March 30, 2026, Holcim Ltd completed the acquisition of 99.99% of Inversiones ASPI S.A., the company's controlling shareholder, resulting in a change of control. Holcim now indirectly owns 50.01% of Cementos Pacasmayo.
Key Financial Metrics (Year Ended December 31, 2025)
| Metric | 2025 (S/ millions) | 2024 (S/ millions) | Variance |
|---|---|---|---|
| Net Sales | 2,116.9 | 1,978.1 | +7.0% |
| Gross Profit | 806.9 | 728.5 | +10.8% |
| Gross Margin | 38.1% | 36.8% | +1.3 pp |
| EBITDA | 506.6 | 549.3 | -7.8% |
| EBITDA Margin | 23.9% | 27.8% | -3.9 pp |
| Net Profit | 154.2 | 198.9 | -22.5% |
| Net Profit Margin | 7.3% | 10.1% | -2.8 pp |
| Operating Cash Flow | 360.6 | 321.1 | +12.3% |
| Total Debt | 1,412.2 | 1,493.2 | -5.4% |
Note: All figures are in Peruvian Soles (S/). Exchange rate used for USD conversion in filing: S/3.363 = US$1.00.
Material Changes vs. Prior Period
- Revenue Growth: Sales increased 7.0% driven by an 8.3% rise in cement, concrete, and precast sales. This was fueled by a 7.7% volume increase and a 1.0% price increase. Conversely, construction supplies sales dropped 26.7% due to lower steel rebar sales.
- Profitability Decline: Despite a 1.3 percentage point improvement in gross margin (driven by lower raw material costs and reduced imported clinker usage), Net Profit fell 22.5%. This was primarily caused by a significant increase in "Other operating expenses" (S/75.5 million in 2025 vs. S/2.7 million in 2024), which included one-off expenses related to the Holcim acquisition (S/77.6 million).
- Cost Structure: Personnel expenses rose due to collective bargaining agreements. Administrative expenses increased 15.0% and Selling/Distribution expenses increased 14.0%.
- Debt Reduction: Total outstanding debt decreased to S/1,412.2 million as the company continued to amortize principal on its "Club Deal" loan and local bonds.
Guidance, Outlook, and Risks
Management Commentary and Outlook
Management expects to spend approximately S/100 million annually on recurring capital expenditures. The company is focused on maintaining market share in Northern Peru, optimizing logistics, and expanding its distribution network. The company has achieved top 10% status in S&P Global's Corporate Sustainability Assessment for 2026.
Change of Control and Delisting Intent
Following Holcim's acquisition of control in March 2026, Holcim filed a Schedule 13D stating its intention to launch a mandatory tender offer for remaining shares. Upon completion of this offer, Holcim intends to delist the company's American Depositary Shares (ADSs) from the New York Stock Exchange and deregister them under the Exchange Act.
Key Risks and Contingencies
- Regulatory Inquiry: The Peruvian Securities Commission (SMV) has requested information regarding the S/77.6 million in "Expenses associated with the Holcim acquisition" recorded in 2025. While management asserts these are valid obligations, there is a risk of administrative sanctions or shareholder disputes.
- Geopolitical and Energy Costs: Global conflicts (Russia-Ukraine, Middle East) have driven up energy prices. Approximately 18.3% of the company's costs are denominated in or indexed to the U.S. Dollar, creating exposure to Sol depreciation and global energy price spikes.
- Political Instability: Peru is entering a 2026 General Election cycle, characterized by political volatility and potential shifts in fiscal policy that could impact public infrastructure spending and the construction sector.
- Climate and Natural Disasters: Operations in Northern Peru are exposed to El Niño phenomena, which can cause flooding and disrupt logistics. There is a 61% probability of an El Niño transition emerging in mid-2026.
Important Facts for Investor Verification
- Delisting Status: Verify the timeline and terms of the mandatory tender offer and the subsequent delisting of ADSs from the NYSE, as this will impact liquidity for U.S. investors.
- Acquisition Expenses: Monitor the outcome of the SMV's inquiry into the S/77.6 million acquisition-related expenses to assess potential financial penalties or restatements.
- Debt Covenants: Confirm continued compliance with financial covenants on the "Club Deal" loan (Debt/EBITDA <= 3.50x) and Senior Notes, especially given the recent change in control.
- Energy Price Exposure: Track the impact of global oil and coal prices on operating margins, given that energy accounts for ~31% of production costs (17.1% coal, 13.8% electricity) and is partially USD-indexed.
- Market Share: Verify the company's ability to maintain its dominant position in Northern Peru against potential expansion by competitors (e.g., Caliza Inca) or increased imports via the new Chancay Port.