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1/ In accordance with the criteria established in IFRS 5, net income from continuing operations includes Cementos Pacasmayo S.A.A. and its subsidiaries, except Fosfatos del Pacifico operations, which are included in net income from discontinued operations.
2/ Corresponds to EBITDA excluding the Salmueras Sudamericanas project which is not linked to the cement business and is currently in pre-operating stages, therefore it is not generating revenues.
Management Comments
Cementos Pacasmayo’s results for the first quarter of 2017 again underscore the strength of our operations; our focus on cost reduction and optimized efficiency throughout the organization again supported our performance this quarter despite uniquely challenging circumstances. Our Piura plant is now showing some of its benefits, with increased capacity, lower cost and logistical flexibility favorably impacting gross margins as compared to the same period in 2016, when we were also required to use costly and volatile imported clinker. Furthermore, despite the heavy rains, the plant passed the test with flying colors and did not stop production at any point. While we did experience a decrease in volumes during the quarter, Pacasmayo was nevertheless able to maintain positive EBITDA margins despite the acutely adverse effects of one of the most severe natural disasters that we’ve seen in 20 years.
As most of you know, in recent months Peru has experienced intense torrential rains caused by what scientists call a “coastal El Niño”, with unusually warm waters just off Peru’s Pacific coast that have triggered rains resulting in devastating floods that have overwhelmed the surrounding towns concentrated in Peru’s northern region. Downtown areas of several cities have been under water for days with floods that have destroyed homes, crops and have killed an estimated 113 people as of the last report. Cementos Pacasmayo has taken an active role in relief assistance, mobilizing manpower and machinery to clear roadways and drain flooding. We have also provided urgent support through humanitarian aid, including a donation of 120 tons of food, water, supplies and equipment. Pacasmayo employees have formed a “Pacasmayo Brigade”, to assist their neighbors. I myself have been closely involved in our Company’s participation, and was unfortunately unable to attend our Pacasmayo Investor Day last month due to related responsibilities.
The effects of this disaster will unfortunately impact the economy of our country in the year ahead. The damage has had an impact across sectors, which will lead to spillover effects throughout as well as on other critical infrastructure, as resources will need to be reallocated to reconstruction efforts. So while the economic ramifications of the disaster cannot yet be accurately quantified, Peru’s economy will be affected by the natural disaster, as already suggested by the decline in both consumer and business confidence in March. However, amid the gloom, Peru’s relatively healthy fiscal situation provides one of the few silver linings: a public contingency fund helped to soften the immediate aftermath of the floods, and the government is likely to unlock further funds for reconstruction in the coming years. Peru is also better positioned to withstand the economic and financial cost than in the past, with benefit of the commodities boom and unprecedented resources and lines of credit to finance reconstruction.
Looking ahead, while February and March were particularly challenging months for Pacasmayo in terms of weather-related impacts, we are expecting some improvement during 2Q17. The high-efficiency Piura plant, which has been an important component to our ability to increase scale and strengthen margins, will also play a key role in Peru’s recovery. Piura’s increased capacity will be critical to address the additional demand associated with Peru’s important reconstruction efforts. Separately, Pacasmayo’s long term projects remain on track. We therefore expect our volumes to recover in the second half, with margins that should continue to improve.
Economic Overview for 1Q17:
During 1Q17, Peru has experienced one of the most severe natural disasters of the past 20 years. Since mid-February, landslides, flooding and intense rainfall have affected the country, particularly the North of Peru. This phenomenon has been named “Coastal El Niño”, since it differs from the well-known El Niño phenomenon. This was impossible to predict, and as recently as January experts believed the likelihood of a mild El Niño was less than 30%.
This phenomenon has resulted in significant destruction of infrastructure and homes. As of April 18, 113 people have died, 178,701 directly damaged and 237,906 homes affected. Apoyo Consultoría has estimated the damages to infrastructure at over US$ 3.3 billion, detailed below. However, these numbers are preliminary estimates and do not include roads, sidewalks, sewage, that have not been officially quantified yet.
|
Assets
|
Number
|
Total Cost
(US$ million)
|
|
Highways (km)
|
1,700
|
1,479
|
|
Bridges
|
100
|
1,331
|
|
Irrigation Channels (km)
|
1,100
|
237
|
|
Schools
|
145
|
178
|
|
Homes
|
17,000
|
104
|
|
Hospitals
|
38
|
10
|
|
Total
|
Over 3.3 billion
|
|
Source: Apoyo Consultoría
|
|
The need for reconstruction is urgent, the funding is available, however, what could be lacking is execution capacity.
The Government has recently announced aggressive measures to boost economic growth through a recovery package in the total amount of S/ 5.5 billion (0.8% of GDP), the most significant of these being the boost to public investment. This is the most aggressive package since that which was instituted in 2009-2010.
Peruvian Cement Industry Overview
:
Cement demand in Peru is mainly supplied by Cementos Pacasmayo, UNACEM and Cementos Yura. Cementos Pacasmayo primarily supplies the northern region of Peru, while UNACEM supplies the central region and Cementos Yura the southern region.
The northern region of Peru, according to the Instituto Nacional de Estadística e Informática (INEI) and Apoyo Consultoría, represents approximately 23% of the country’s population and 13% of national Gross Domestic Product (“GDP”). Despite sustained growth in the country over the last 10 years, Peru continues to have a significant housing deficit estimated at 1.9 million households throughout the country as per the Ministry of Housing, Construction and Sanitation.
In Peru, the majority of cement is sold to a highly fragmented consumer base of individuals that tend to gradually buy bags of cement to build or to improve their homes, a segment the industry refers to as “self-construction”.
Main Infrastructure Projects in the Area of Influence:
Although the anticipated increase in Peru’s infrastructure spending has been delayed, this remains a priority for 2017-2018. Aside from the projects shown below, there will also be significant spending for reconstruction works related to
coastal El Niño
which we cannot yet estimate as the damages are ongoing.
Specifically in the northern region of Peru, where Cementos Pacasmayo is the leading provider of cement, the two larger projects in the execution phase are:
|
·
|
Talara Refinery – Cementos Pacasmayo has been contracted to provide cement, concrete and piles for this project. The Company estimates that as of March 31, 2017, approximately 91% of the total cement needed has been shipped.
|
|
·
|
Longitudinal de la Sierra Highway – Cementos Pacasmayo has been contracted to provide cement and concrete for this project. As of March 31, 2017, the Company estimates that approximately 57% of the total demand for the project has been shipped. Execution has been slow due to rains but we expect it to pick up in the coming months
|
Chavimochic is currently on hold, until the bidding process is again opened for the project’s conclusion.
In addition to these projects, 3 new projects are near the execution phase: The new city of Olmos, Alto Piura and the Huacrachuco-Sausacocha road.
Operating Results:
Production:
Cement Production Volume
(thousands of metric tons
)
|
|
Production
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Planta Pacasmayo
|
267.9
|
365.0
|
-26.6%
|
|
Planta Rioja
|
71.4
|
77.0
|
-7.3%
|
|
Planta Piura
|
186.0
|
120.9
|
53.8%
|
|
Total
|
525.3
|
562.9
|
-6.7%
|
Cement production volume at the Pacasmayo plant decreased 26.6% in 1Q17 compared to 1Q16, mainly due to the beginning of cement production in the Piura plant and to decreased demand.
Cement production volume at the Rioja Plant decreased 7.3% in 1Q17 compared to 1Q16, mainly due to the beginning of cement production in the Piura plant.
Cement production volume at the Piura Plant increased 53.8% in 1Q17 compared to 1Q16, since the plant was still in the ramp up process in 1Q16.
Total cement production volumes decreased 6.7% in 1Q17 compared to 1Q16, mainly as a consequence of decreased sales volume due to heavy rains and flooding in the North coast of Peru.
Clinker Production Volume
(thousands of metric tons)
|
|
Production
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Planta Pacasmayo
|
173.5
|
153.2
|
13.3%
|
|
Planta Rioja
|
51.5
|
60.8
|
-15.3%
|
|
Planta Piura
|
193.2
|
80.7
|
139.4%
|
|
Total
|
418.2
|
294.7
|
41.9%
|
Clinker production volume at the Pacasmayo plant increased 13.3% in 1Q17 when compared to 1Q16, mainly due to maintenance of our main kiln in 1Q16 as well as to the end of imported clinker use.
Clinker production volume at the Rioja plant decreased 15.3% in 1Q17 compared to 1Q16, mainly due to consumption of inventories and maintenance of one of our kilns during 1Q17, as well as the beginning of production in the Piura plant.
Clinker production volume at the Piura plant increased 139.4% in 1Q17 compared to 1Q16, since in 1Q16 the plant was still in the ramp up process.
Quicklime Production Volume
(thousands of metric tons)
|
|
Production
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Pacasmayo Plant
|
41.6
|
24.2
|
71.9%
|
Quicklime production volume increased 71.9% in 1Q17 compared to 1Q16, in line with increased demand.
Installed Capacity:
Installed Cement and Clinker Capacity
Annual installed cement capacity at the Pacasmayo, Piura and Rioja plants remained stable at 2.9 million MT. 1.6 million MT and 440,000 MT, respectively.
The annual installed clinker capacity at the Pacasmayo, Piura and Rioja plants remained stable at 1.5 million MT, 1.0 million MT and 280,000 MT, respectively.
Utilization Rate
1
:
Pacasmayo Plant Utilization Rate
|
|
Utilization Rate
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Cement
|
37.0%
|
50.3%
|
-13.3 pp.
|
|
Clinker
|
46.3%
|
40.9%
|
5.4 pp.
|
|
Quicklime
|
69.3%
|
40.3%
|
29.0 pp.
|
The utilization rate of cement production at the Pacasmayo plant decreased 13.3 percentage points in 1Q17 compared to 1Q16, in line with the beginning of production at the Piura plant and decreased demand.
The utilization rate of clinker production in 1Q17 increased 5.4 percentage points compared to 1Q16, mainly due to maintenance of our main kiln in 1Q16 and the end of imported clinker use.
Additionally, the utilization rate of quicklime production increased 29.0 percentage points during 1Q17, compared with 1Q16, in line with increased demand.
1
The utilization rates are calculated by dividing production in a given period over nominal installed capacity. The utilization rate implies annualized production, which is calculated by multiplying real production for each quarter by 4.
Rioja Plant Utilization Rate
|
|
Utilization Rate
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Cement
|
64.9%
|
70.0%
|
-5.1 pp.
|
|
Clinker
|
73.6%
|
86.8%
|
-13.2 pp.
|
The utilization rate of cement production at the Rioja plant was 64.9% in 1Q17; 5.1 percentage points lower than in 1Q16.
The utilization rate of clinker production at the Rioja plant was 73.6% in 1Q17; 13.3 percentage points lower than 1Q16, due to consumption of inventories and maintenance of one of our kilns during 1Q17 as well as beginning of clinker production in the Piura plant.
Piura Plant Utilization Rate
|
|
Utilization Rate
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Cement
|
46.5%
|
30.2%
|
16.3 pp.
|
|
Clinker
|
77.3%
|
32.3%
|
45.0 pp.
|
The utilization rate of cement production at the Piura plant was 46.5% in 1Q17; 16.3 percentage points higher than in 1Q16, since the plant was in its ramp up period in 1Q16 and is now fully operational.
Likewise, the utilization rate of clinker production at the Piura plant was 77.3% in 1Q17; 45 percentage points higher than in 1Q16. During 1Q17 there was some clinker production for inventory purpose.
Consolidated Utilization Rate
|
|
Utilization Rate
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Cement
|
42.5%
|
45.6%
|
-3.1 pp.
|
|
Clinker
|
60.2%
|
42.4%
|
17.8 pp.
|
The consolidated utilization rate of cement production was 42.5% 1Q17; 3.1 percentage points lower than in 1Q16 due to decreased demand.
The consolidated utilization rate of clinker production was 60.2% in 1Q17; 17.8 percentage points higher than in 1Q16 since the Piura plant was in its ramp up period in 1Q16 and is now fully operational.
Financial Results:
Income Statement:
The following table shows a summary of the Consolidated Financial Results:
Consolidated Financial Results
(in millions of Soles S/)
|
|
Income Statement
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Sales of goods
|
280.1
|
308.8
|
-9.3%
|
|
Gross Profit
|
112.9
|
114.2
|
-1.1%
|
|
Total operating expenses, net
|
-61.2
|
-50.9
|
20.2%
|
|
Operating Profit
|
51.8
|
63.3
|
-18.2%
|
|
Total other expenses, net
|
-17.3
|
-20.7
|
-16.4%
|
|
Profit before income tax
|
34.5
|
42.6
|
-19.0%
|
|
Income tax expense
|
-12.0
|
-13.1
|
-8.4%
|
|
Profit from Continuing Operations
|
22.4
|
29.5
|
-24.1%
|
|
Profit from Discontinued Operations
|
-0.8
|
-1.7
|
-52.9%
|
|
Profit for the period
|
21.7
|
27.7
|
-21.7%
|
Although revenues decreased 9.3%, gross profit decreased by only 1.1% due to efficiencies achieved from full production at the Piura plant. Profit from continuing operations decreased 24.1% mainly due to increased selling and distribution expenses and increased depreciation from the Piura plant.
Sales of Goods:
The following table shows the Sales of Goods and their respective margins by business segment:
Sales: cement, concrete and blocks
(in millions of Soles S/)
|
|
Cement, concrete and blocks
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Sales of goods
|
245.6
|
278.5
|
-11.8%
|
|
Cost of Sales
|
-137.1
|
-167.9
|
-18.3%
|
|
Gross Profit
|
108.5
|
110.6
|
-1.9%
|
|
Gross Margin
|
44.2%
|
39.7%
|
4.5 pp.
|
Sales of cement, concrete and blocks decreased 11.8% during 1Q17 compared to 1Q16, mainly as a consequence of decreased demand due to landslides, flooding and heavy rains in the North coast of Peru during February and March. However, gross margin increased 4.5 percentage points during 1Q17 compared to 1Q16, mainly due to efficiencies achieved from full production at the Piura plant.
Sales of cement represented 88.8% of cement, concrete and block sales during 1Q17.
|
|
Cement
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Sales of goods
|
218.0
|
236.9
|
-8.0%
|
|
Cost of Sales
|
-114.2
|
-136.8
|
-16.5%
|
|
Gross Profit
|
103.8
|
100.1
|
3.7%
|
|
Gross Margin
|
47.6%
|
42.3%
|
5.3 pp.
|
Sales of cement decreased 8.0% in 1Q17 compared to 1Q16, reflecting the decrease in cement demand in the northern market. Nonetheless, gross margin increased 5.3 percentage points in 1Q17 compared to 1Q16 due to efficiencies achieved with the production of the Piura plant.
Sales of concrete represented 9.4% of cement, concrete and block sales during 1Q17.
|
|
Concrete
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Sales of goods
|
23.0
|
33.6
|
-31.5%
|
|
Cost of Sales
|
-18.8
|
-25.2
|
-25.4%
|
|
Gross Profit
|
4.2
|
8.4
|
-50.0%
|
|
Gross Margin
|
18.3%
|
25.0%
|
-6.7 pp.
|
Sales of concrete decreased 31.5% during 1Q17 compared to 1Q16, mainly as a consequence of decreased infrastructure spending, due to rains and to some large project delays. Gross margin decreased 6.7 percentage points in 1Q17 compared to 1Q16, mainly due to lower dilution of fixed costs.
Sales of blocks represented 1.8% of cement, concrete and block sales during 1Q17.
|
|
Blocks, bricks and pavers
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Sales of goods
|
4.6
|
8.0
|
-42.5%
|
|
Cost of Sales
|
-4.1
|
-5.9
|
-30.5%
|
|
Gross Profit
|
0.5
|
2.1
|
-76.2%
|
|
Gross Margin
|
10.9%
|
26.3%
|
-15.4 pp.
|
During 1Q17, blocks, bricks and pavers sales decreased 42.5% and gross margin decreased 15.4 percentage points compared to 1Q16 mainly due to the conclusion of infrastructure projects which had boosted demand and margins in 1Q16.
Sales: Quicklime
(in millions of Soles S/)
|
|
Quicklime
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Sales of goods
|
21.6
|
14.6
|
47.9%
|
|
Cost of Sales
|
-17.6
|
-11.2
|
57.1%
|
|
Gross Profit
|
4.0
|
3.5
|
14.3%
|
|
Gross Margin
|
18.5%
|
24.0%
|
-5.5 pp.
|
Quicklime sales increased 47.9% in 1Q17 compared to 1Q16, mainly due to an increase in demand. However, gross margin decreased 5.5 percentage points, mainly due to higher raw materials costs and exchange rate effects since the Company sells quicklime in dollars.
Sales: Construction Supplies
1
(in millions of Soles S/)
During 1Q17, sales of construction supplies decreased 11.0% compared to 1Q16, mainly due to lower demand, in line with the rest of the construction sector, and increased competition which resulted in lower prices. Gross margin during 1Q17 was 4.6%.
2
Construction supplies include the following products: steel rebars, wires, nails, corrugated iron, electric conductors, plastic tubes and accessories, among others
.
Operating Expenses:
Administrative Expenses
(in millions of Soles S/)
|
|
Administrative expenses
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Personnel expenses
|
26.7
|
25.0
|
6.8%
|
|
Third-party services
|
13.3
|
13.9
|
-4.3%
|
|
Board of directors compensation
|
1.6
|
1.5
|
6.7%
|
|
Depreciation and amortization
|
3.7
|
2.7
|
37.0%
|
|
Other
|
3.1
|
3.2
|
-3.1%
|
|
Total
|
48.4
|
46.3
|
4.5%
|
During 1Q17, administrative expenses increased 4.5% compared to 1Q16, primarily due to increased personnel expenses and depreciation associated with the start of operations at the Piura plant.
Selling Expenses
(in millions of Soles S/)
|
|
Selling and distribution expenses
|
|
|
1Q17
|
1Q16
|
% Var.
|
|
Personnel expenses
|
4.9
|
4.1
|
19.5%
|
|
Advertising and promotion
|
5.2
|
3.4
|
52.9%
|
|
Other
|
2.0
|
1.6
|
25.0%
|
|
Total
|
12.1
|
9.1
|
33.0%
|
During 1Q17 selling expenses increased 33.0% compared to 1Q16, in line with an increase in the advertising and promotion expenses budget to successfully defend the Company’s market share in light of decreased volumes.
EBITDA Reconciliation:
Consolidated EBITDA
(in millions of Soles S/)
|
|
Consolidated EBITDA
|
|
|
1Q17
|
1Q16
|
Var %.
|
|
Net Income from continuing operations
|
22.4
|
29.5
|
-24.1%
|
|
+ Income tax expense
|
12.0
|
13.1
|
-8.4%
|
|
- Finance income
|
-1.5
|
-0.2
|
N/R
|
|
+ Finance costs
|
17.7
|
16.8
|
5.4%
|
|
+/- Net (loss) gain from exchange rate
|
1.1
|
4.1
|
-73.2%
|
|
+ Depreciation and Amortization
|
30.7
|
23.4
|
31.2%
|
|
Consolidated adjusted EBITDA
|
82.4
|
86.7
|
-5.0%
|
|
EBITDA from Salsud *
|
1.4
|
0.1
|
N/R
|
|
Cement EBITDA
|
83.8
|
86.8
|
-3.5%
|
* Corresponds to EBITDA excluding the Salmueras Sudamericanas project which is not linked to the cement business and is currently in pre-operating stages, therefore it is not generating revenues.
During 1Q17, consolidated EBITDA decreased 5% to S/ 82.4 million compared to S/ 86.7 million in 1Q16, mainly as a result of lower operating profit as a consequence of lower sales volume, increased selling and administrative expenses, and an a one-off operating income booked in 1Q16 due to a provision for 2015 which was not executed and reverted in 1Q16.
Cash and Debt Position:
Cash:
Consolidated Cash
(in millions of Soles S/)
As of March 31, 2017, the Company’s cash position was S/ 18.5 million (US$ 5.7 million). This balance includes certificates of deposit for S/ 5 million (US$ 1.5 million), distributed as follows:
Certificates of deposits in Soles
|
Bank
|
Amount (S/)
|
Interest rate
|
Initial Date
|
Maturity Date
|
|
|
|
|
|
|
|
Banco de Crédito del Perú
|
S/ 4.0
|
4.10%
|
March 31,2017
|
April 3, 2017
|
|
Banco de Crédito del Perú
|
S/ 1.0
|
4.10%
|
March 31,2017
|
April 3, 2017
|
|
|
|
|
|
|
|
|
S/ 5.0
|
|
|
|
The remaining balance of S/ 13.5 million (US$ 4.1 million) is held mainly in the Company’s bank accounts, of which US$ 0.8 million are denominated in US dollars and the remainder in Soles.
Debt Position:
Consolidated Debt
(in millions of Soles S/)
Below are the contractual obligations with payment deadlines related to the Company’s debt, including interest.
|
|
Payments due by period
|
|
|
Less than 1 year
|
1-3 Years
|
3-5 Years
|
More than 5 Years
|
Total
|
|
Debt adjusted by hedge
|
-
|
-
|
-
|
913.3
|
913.3
|
|
Future interest payments
|
43.8
|
87.7
|
87.7
|
43.8
|
263.0
|
|
Total
|
43.8
|
87.7
|
87.7
|
957.1
|
1,176.3
|
As of March 31, 2017, the Company’s total outstanding debt reached S/ 974.4 million (US$ 300.0 million), which correspond to the international bonds issued in February 2013. These bonds have a coupon rate of 4.50% with a 10-year bullet maturity.
As of March 31, 2017, the Company has entered into cross currency swap hedging agreements for US$300 million to manage foreign exchange risks related to US dollar-denominated debt. The adjusted debt by hedge is S/ 913.3 million (US$ 281.2 million).
Net Adjusted Debt/EBITDA ratio was 2.3x
Capex
Capex
(in millions of Soles S/)
As of March 31, 2017, the Company invested S/ 10.1 million (US$ 3.1 million), allocated to the following projects:
|
Projects
|
3M17
|
|
Pacasmayo Plant Projects
|
5.0
|
|
Concrete and aggregates equipment
|
4.7
|
|
Rioja Plant Projects
|
0.4
|
|
Other investing activities
|
-
|
|
Total
|
10.1
|
Projects
Salmueras Sudamericanas S.A.
In 2011, the Company signed an agreement with Quimica del Pacifico (Quimpac), a leading Peruvian chemical company, to establish Salmueras Sudamericanas S.A., in which the Company owns 74.9% of the outstanding shares, with Quimpac holding the remaining 25.1%.
The basic engineering study was conducted by K-Utec AG Salt Technologies, a German company with over 50 years of experience in the salt business. The report is currently being evaluated by both partners in order to determine how to move forward based on their respective investment priorities. The environmental impact study was approved in December 2014.
About Cementos Pacasmayo S.A.A.
Cementos Pacasmayo S.A.A. is a cement company, located in the Northern region of Peru. In February 2012, the Company’s shares were listed on The New York Stock Exchange - Euronext under the ticker symbol "CPAC". With more than 59 years of operating history, the Company produces, distributes and sells cement and cement-related materials, such as concrete blocks and ready-mix concrete. Cementos Pacasmayo’s products are primarily used in construction, which has been one of the fastest-growing segments of the Peruvian economy in recent years. The Company also produces and sells quicklime for use in mining operations.
For more information, please visit:
http://www.cementospacasmayo.com.pe/investors
Note:
The Company presented some figures converted from Soles to U.S. Dollars for comparison purposes. The exchange rate used to convert Soles to U.S. dollars was S/ 3.248 per US$ 1.00, which was the exchange rate, reported as of March 31, 2017 by the Superintendencia de Banca, Seguros y AFP’s (SBS). The information presented in U.S. dollars is for the convenience of the reader only. Certain figures included in this report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be arithmetic aggregations of the figures presented in previous quarters.
|
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management’s current view and estimates of future economic circumstances, industry conditions, Company performance and financial results. Also, certain reclassifications have been made to make figures comparable for the periods. The words “anticipates”, “believes”, “estimates”, “expects”, “plans” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.
|
|
Interim Condensed Consolidated Statements of Financial Position
|
|
|
|
As of March 31, 2017 (unaudited) and December 31, 2016 (audited)
|
|
|
|
|
|
|
|
Assets
|
As of mar-17
|
As of Dec-16
|
|
Current Assets
|
S/ (000)
|
S/ (000)
|
|
Cash and term deposits
|
18,544
|
80,215
|
|
Trade and other receivables
|
80,810
|
81,121
|
|
Income tax prepayments
|
40,336
|
46,546
|
|
Inventories
|
345,731
|
346,535
|
|
Prepayments
|
14,880
|
7,909
|
|
Total current assets
|
500,301
|
562,326
|
|
|
|
|
|
Assets held for distribution
|
-
|
338,411
|
|
|
|
|
|
|
As of mar-17
|
As of Dec-16
|
|
Non-current assets
|
S/ (000)
|
S/ (000)
|
|
Other receivables
|
24,439
|
25,120
|
|
Prepayments
|
937
|
1,222
|
|
Available-for-sale financial investments
|
21,873
|
657
|
|
Other financial instruments
|
46,158
|
69,912
|
|
Property, plant and equipment
|
2,244,757
|
2,273,048
|
|
Exploration and evaluation assets
|
44,726
|
43,028
|
|
Deferred income tax assets
|
6,781
|
6,350
|
|
Other assets
|
498
|
549
|
|
Total non-current assets
|
2,390,169
|
2,419,886
|
|
|
|
|
|
Total assets
|
500,799
|
562,875
|
|
|
|
|
|
Liabilities and equity
|
As of mar-17
|
As of Dec-16
|
|
Current liabilities
|
S/ (000)
|
S/ (000)
|
|
Trade and other payables
|
114,973
|
142,773
|
|
Income tax payable
|
2,803
|
3,464
|
|
Provisions
|
27,302
|
31,711
|
|
Total current liabilities
|
145,078
|
177,948
|
|
|
|
|
|
Liabilities directly related to assets held for distribution
|
-
|
2,704
|
|
|
|
|
|
|
As of mar-17
|
As of Dec-16
|
|
Non-current liabilities
|
S/ (000)
|
S/ (000)
|
|
Interest-bearing loans and borrowings
|
965,259
|
998,148
|
|
Other non-current provisions
|
22,042
|
22,042
|
|
Deferred income tax liabilities
|
134,793
|
139,752
|
|
Total non-current liabilities
|
1,122,094
|
1,159,942
|
|
|
|
|
|
Total liabilities
|
1,267,172
|
1,337,890
|
|
|
|
|
|
Equity
|
As of mar-17
|
As of Dec-16
|
|
|
S/ (000)
|
S/ (000)
|
|
Capital stock
|
423,868
|
531,461
|
|
Investment shares
|
40,279
|
50,503
|
|
Treasury shares
|
-119,005
|
-108,248
|
|
Additional paid-in capital
|
426,490
|
545,165
|
|
Legal reserve
|
153,349
|
188,075
|
|
Other reserves
|
-10,657
|
-16,602
|
|
Retained earnings
|
697,160
|
677,086
|
|
|
|
|
|
|
|
|
|
Equity attributable to equity holders of the parent
|
1,611,484
|
1,867,440
|
|
Non-controlling interests
|
11,814
|
112,589
|
|
|
|
|
|
Total equity
|
1,623,298
|
1,980,029
|
|
|
|
|
|
Total liabilities and equity
|
2,890,470
|
3,317,919
|
|
Interim condensed consolidated statements of profit or loss
|
|
|
|
For the three-month periods ended March 31, 2017 and 2016 (both unaudited)
|
|
|
|
|
|
|
1Q17
|
1Q16
|
|
|
S/ (000)
|
S/ (000)
|
|
Sales of goods
|
280,129
|
308,768
|
|
Cost of sales
|
-167,190
|
-194,540
|
|
Gross profit
|
112,939
|
114,228
|
|
|
|
|
|
Operating income (expenses)
|
|
|
|
Administrative expenses
|
-48,350
|
-46,401
|
|
Selling and distribution expenses
|
-12,139
|
-9,076
|
|
Other operating income (expenses), net
|
-694
|
4,548
|
|
Total operating expenses , net
|
-61,183
|
-50,929
|
|
|
|
|
|
Operating profit
|
51,756
|
63,299
|
|
|
|
|
|
Other income (expenses)
|
|
|
|
Finance income
|
1,530
|
266
|
|
Finance costs
|
-17,710
|
-16,839
|
|
Net (loss) gain from exchange difference
|
-1,110
|
-4,157
|
|
|
|
|
|
Total other expenses, net
|
-17,290
|
-20,730
|
|
|
|
|
|
Profit before income tax
|
34,466
|
42,569
|
|
|
|
|
|
Income tax expense
|
-12,021
|
-13,097
|
|
|
|
|
|
Profit for the year from continuing operations
|
22,445
|
29,472
|
|
Profit for the year from discontinued operations
|
-754
|
-1,731
|
|
Profit for the period
|
21,691
|
27,741
|
|
|
|
|
|
Attributable to:
|
|
|
|
Equity holders of the parent
|
23,305
|
28,459
|
|
Non-controlling interests
|
-614
|
-718
|
|
Net income
|
21,691
|
27,741
|
|
|
|
|
|
Earnings per share
|
|
|
|
Basic and diluted for continuing and discontinued operations attributable to equity holders of common
shares and investment shares of the parent (S/ per share)
|
0.04
|
0.06
|
|
Interim condensed consolidated statements of changes in equity
|
|
|
|
|
|
|
|
For the three month periods ended March 31, 2017 and 2016 (both unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to equity holders of the parent
|
|
|
|
|
Capital stock
S/ (000)
|
Investment shares
S/ (000)
|
Treasury shares
S/ (000)
|
Additional
paid-in capital
S/ (000)
|
Legal reserve
S/ (000)
|
Unrealized
gain (loss) on available-for-sale
investments
S/ (000)
|
Unrealized gain on cash flow hedge S/(000)
|
Retained earnings
S/ (000)
|
Total
S/ (000)
|
Non-
controlling interests
S/ (000)
|
Total equity
S/ (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2016
|
531,461
|
50,503
|
-108,248
|
553,466
|
176,458
|
-11
|
11,660
|
727,765
|
1,943,054
|
103,080
|
2,046,134
|
|
Profit for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
28,459
|
28,459
|
-718
|
27,741
|
|
Other comprehensive income
|
-
|
-
|
-
|
-
|
-
|
104
|
18,890
|
-
|
18,994
|
-
|
18,994
|
|
Total comprehensive income
|
-
|
-
|
-
|
-
|
-
|
104
|
18,890
|
28,459
|
47,453
|
-718
|
46,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appropriation of legal reserve
|
-
|
-
|
-
|
-
|
2,846
|
-
|
-
|
-2,846
|
-
|
-
|
-
|
|
Contribution of non-controlling interests
|
-
|
-
|
-
|
-
|
|
|
|
|
|
473
|
473
|
|
Other adjustments of non-controlling interests
|
-
|
-
|
-
|
-7,521
|
-
|
-
|
-
|
-
|
-7,521
|
7,521
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2016
|
531,461
|
50,503
|
-108,248
|
545,945
|
179,304
|
93
|
30,550
|
753,378
|
1,982,986
|
110,356
|
2,093,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2017
|
531,461
|
50,503
|
-108,248
|
545,165
|
188,075
|
145
|
-16,747
|
677,086
|
1,867,440
|
112,589
|
1,980,029
|
|
Profit for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
22,305
|
22,305
|
-614
|
21,691
|
|
Other comprehensive income
|
-
|
-
|
-
|
-
|
-
|
7
|
5,938
|
-
|
5,945
|
-
|
5,945
|
|
Total comprehensive income
|
-
|
-
|
-
|
-
|
-
|
7
|
5,938
|
22,305
|
28,250
|
-614
|
27,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appropriation of legal reserve
|
-
|
-
|
-
|
-
|
2,231
|
-
|
-
|
-2,231
|
-
|
-
|
-
|
|
Contribution of non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
90
|
90
|
|
Purchase of shares in treasury
|
-
|
-
|
-34,216
|
-
|
-
|
-
|
-
|
-
|
-34,216
|
-
|
-34,216
|
|
Splitting effects of equity
|
-107,593
|
-10,224
|
23,459
|
-118,569
|
-36,957
|
-
|
-
|
-
|
-249,884
|
-100,357
|
-350,241
|
|
Other adjustments of non-controlling interests
|
-
|
-
|
-
|
-106
|
-
|
-
|
-
|
-
|
-106
|
106
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2017
|
423,868
|
40,279
|
-119,005
|
426,490
|
153,349
|
152
|
-10,809
|
697,160
|
1,611,484
|
11,814
|
1,623,298
|
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.