Cementos Pacasmayo S.A.A. (NYSE:CPAC) Q4 2023 Earnings Conference Call February 15, 2024 11:00 AM ET

Company Participants

Claudia Bustamante - Sustainability & IR Manager

Humberto Nadal - CEO

Manuel Ferreyros - CFO

Conference Call Participants

Natalia Leo - JPMorgan

Operator

Good day, ladies and gentlemen. Welcome to Pacasmayo's Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode and please note that this call is being recorded. At the conclusion of our prepared remarks, we will conduct a question-and-answer session.

I would now like to introduce your host for today's call, Mrs. Claudia Bustamante, Sustainability and Investor Relations Manager. Mrs. Bustamante, you may begin.

Claudia Bustamante

Thank you, Tim. Good morning, everyone. Joining me on the call today is Mr. Humberto Nadal, our Chief Executive Officer; and Mr. Manuel Ferreyros, our Chief Financial Officer. Mr. Nadal will begin our call with an overview of our quarter, focusing primarily on our strategic outlook for the short and medium-term. Mr. Ferreyros will then follow with additional commentary on our financial results. We'll then turn the call over to your questions.

Please note that this call will include certain forward-looking statements. These statements relate to expectations, beliefs, projections, trends and other matters that are not historical facts and are therefore subject to risks and uncertainties that might affect future events or results. Descriptions of these risks are set forth in the company's regulatory filings.

With that, I'd now like to turn the call over to Mr. Humberto Nadal.

Humberto Nadal

Thank you, Claudia. Welcome, everyone to our quarterly results conference call, and thank you so much for joining us today. This quarter, we continued to focus on our strategy which led us to deliver outstanding results in terms of profitability. We reached a gross profit margin of 39.4%, almost 9 percentage points higher than the same quarter of last year. This significant increase in margin was mainly due to the lower production cost of our new kiln in Pacasmayo, which also allowed us to replace imported clinker with our own clinker as well as to the decrease in the cost of coal.

Considering that we now have this additional capacity that is both efficient and more environmentally friendly, we decided to make an impairment to our vertical kilns. This non-cash effect affected EBITDA but our adjusted EBITDA increased 29% year-over-year this quarter, and adjusted EBITDA margin reached 30.5%, is outstanding, and I want to stress outstanding quarterly results have allowed us to reach a record adjusted EBITDA of PEN518.3 million in 2023, the highest in all the history of Pacasmayo.