Peru's Pacasmayo, Unacem see sales decline
Peruvian cement producers Cementos Pacasmayo and Unacem posted lower sales in the third quarter as the government struggles to accelerate infrastructure projects.
Pacasmayo posted a 33.4mn-sol (US$10mn) profit in the quarter compared with 38.6mn soles a year earlier as sales fell 4.4% to 319mn soles from 334mn soles, the Lima-based company said in a corporate filing sent to securities regulator SMV.
The company registered an 8.6% increase in sales costs as prices of coal and other raw materials rose, it said.
Pacasmayo, which took out US$300mn in cross currency swaps to lessen currency depreciation risk, had 85.5mn soles in cash and 1.114bn soles in debt as of September 30.
Cement production slid 0.1% to 606,800t in Q3 from a year ago, while clinker output rose 12.4% to 432,000t and quicklime plunged by half to 27,200t. Cement production was dented by falling output at its Piura plant, which offset gains at its Pacasmayo and Rioja plants.
Pacasmayo aims to boost sales by 5% next year as spending increases on infrastructure projects on the north coast such as Petroperú's Talara oil refinery expansion, the port of Salaverry and the Chiclayo and Piura airport modernization projects.
Cement producers are counting on cement sales to rise as work accelerates on a 26bn-sol (US$8bn) reconstruction program after record flooding and landslides sparked by the El Niño phenomenon last year left 163 dead and 291,000 homeless and destroyed roads, bridges and railway lines.
President Martín Vizcarra, who replaced Pedro Pablo Kuczynski in March, has vowed to make the reconstruction program a priority. Reconstruction will demand an additional 1Mt of cement, according to Pacasmayo.
Still, political infighting and corruption scandals that have weakened Vizcarra's government remain a concern for the business sector.
"It's been a very rocky year for many circumstances, so we'd rather be on the conservative side," CEO Humberto Nadal said in a conference call to discuss financial results. "President Vizcarra has a more efficient approach to reconstruction, but I'd rather be cautious about the political scenario."
UNACEM
Fellow cement producer Unacem posted a 49mn-sol profit in Q3 compared with 35.5mn soles a year earlier as revenue fell to 498mn soles from 502mn soles, the company said in a corporate filing.
Unacem, which said it received a 97mn-sol sol dividend from its Ecuadoran subsidiary compared with 247mn soles a year earlier, reduced financial expenses, sales and administration costs. The company also posted a 14mn-sol FX loss compared with an 8.3mn-sol FX gain a year earlier.
The company's cement production slid 0.3% to 1.29Mt in the period. Cement sales dropped 0.4% to 1.28Mt, it said, and exports increased to 454,000t from 333,000t.
Capex through the first three quarters totaled 61mn soles including investments at its Atocongo plant, it said.
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