NYSE:CPAC Cementos Pacasmayo S.A.A. Q2 2024 Earnings Report $5.58 -0.07 (-1.15%) As of 10:54 AM Eastern This is a fair market value price provided by Polygon.io. Learn more. Earnings HistoryForecast Cementos Pacasmayo S.A.A. EPS ResultsActual EPS$0.12Consensus EPS $0.13Beat/MissMissed by -$0.01One Year Ago EPSN/ACementos Pacasmayo S.A.A. Revenue ResultsActual Revenue$122.24 millionExpected Revenue$118.53 millionBeat/MissBeat by +$3.71 millionYoY Revenue GrowthN/ACementos Pacasmayo S.A.A. Announcement DetailsQuarterQ2 2024Date7/22/2024TimeN/AConference Call DateTuesday, July 23, 2024Conference Call Time10:30AM ETUpcoming EarningsCementos Pacasmayo S.A.A.'s Q1 2025 earnings is scheduled for Monday, May 5, 2025, with a conference call scheduled on Tuesday, April 29, 2025 at 10:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Cementos Pacasmayo S.A.A. Q2 2024 Earnings Call TranscriptProvided by QuartrJuly 23, 2024 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Good day, ladies and gentlemen. Welcome to Pacasmayo's Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. Please note that this call is being recorded. At the conclusion of our prepared remarks, we will conduct a question and answer session. Operator00:00:17I would now like to introduce your host for today's call, Ms. Claudia Bustamante, Sustainability and Investor Relations Manager. Ms. Bustamante, you may begin. Speaker 100:00:28Thank you, Tim. Good morning, everyone. Joining me on the call today is Mr. Humberto Nadal, our Chief Executive Officer and Mr. Manuel Ferreiro, our Chief Financial Officer. Speaker 100:00:38Mr. Nadal will begin our call with an overview of the quarter, focusing primarily on our strategic outlook for the short and medium term. Mr. Ferreiro will then follow with additional commentary on our financial results. We'll then turn the call over to your questions. Speaker 100:00:53Please note that this call will include certain forward looking statements. 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. Speaker 100:01:16Humberto Nazzo. Speaker 200:01:19Thank you, Claudia. Welcome everyone to our quarterly results conference call, and thank you so much for joining us today. This quarter revenues increased 3.4% year over year, showing a reversal of a negative trend that started almost 2 years ago. The increase in revenues were mainly driven by concrete and pavement sales related to the Pura Airport project, which almost in this quarter as compared to the Q2 of 2023. Furthermore, we're able to achieve a 6% increase in consolidated EBITDA, mainly due to operational efficiencies derived from our new Ken in Pacasmayo as well as favorable raw material prices. Speaker 200:01:59We are confident that the efficiencies achieved will be sustainable over time, and top line growth should sustain by the continued delivery of concrete and pavement for airport project and increased participation on public investment projects. These factors certainly make for a more promising second half of the year. Despite this increasing infrastructure rated demand, the housing sector in Peru is still by far the biggest driver of demand. According to a study conducted by Grady, a private research center in Peru, there is a requirement of 142,000 new homes every single year. Social housing programs only cover 30% of this requirement, leaving the remaining 70% up to self construction. Speaker 200:02:42On average, we have to mention that self construction process takes an appalling 16 years from the acquisition or occupation of the property to the completion of the home. During this time, families spend about 8 years in a completely precarious home and an additional 8 years in a home under construction. Dead floors are known to harbor parasites and bacteria that can cause serious illnesses, including respiratory illnesses and anemia among many others. To tackle this extremely harsh reality, we are working on a variety of different fronts. 1st, to decrease anemia and illnesses as part of our corporate social responsibility efforts, we are changing dirt floors and replacing them by concrete starting in our areas of influence. Speaker 200:03:31By the end of July, 255 floors will be completed, and our target is to build 1,000 for the North by the end of this year. Additionally, if we want to go one step beyond and ensure improvement in their overall health, this program will also provide health counseling to help our beneficiary families understand how to make and sustain those healthy lifestyle changes. As you probably already know, the self construction segment represents over 70% of our sales. As mentioned before, self construction process takes on an average 16 years. It is unacceptable for a family to have to wait this long for a proper home. Speaker 200:04:12These families are our consumers and we know that when they buy a bag of cement, what they really want is a dream home. Therefore, we are committed and working on solutions aimed at easing this unnecessary long journey. We are developing a temporary housing service that will help low income families to live in a better quality temporary homes. This temporary solution can be transferred without additional expenses to their permanent home, avoiding precarious situations and enabling its transformation for future use. On the financing side, a tremendous challenge at this point. Speaker 200:04:47We have IU, our solution designed as an intelligent purchasing method so that people are able to define their project and buy the materials that they need month by month until they have all of the materials needed to carry out their chosen project. All of these programs are absolutely aligned with our purpose of building together the future of UTMF. Finally, I would like to mention that we are very pleased with the performance of our building solutions this quarter. Concrete, mortar and pavement sales increased 91% this quarter when compared to the same period last year. Concurria pavement sales were mainly related to the Pura Airport, as I mentioned before. Speaker 200:05:26This quarter, we finished Phase 1 of the project, which included the construction of a temporary runway. Phase 2 of the project will tackle the reconstruction of the main Runway was begun at the end of this quarter and should be completed by December of this year. Precast sales this quarter also increased 46% year over year, positively affected by the acceleration of public sector projects. We expect this trend to continue as public work continues execution and new projects start coming in line in the upcoming months. I will now turn the call over to Manuel, going to more details in national markets. Speaker 200:05:58Manuel? Speaker 300:06:01Thank you, Humberto. Good morning, everyone. Our Q2 2024 revenues were $457,100,000 a 3.4% increase when compared to the same period of last year, mainly due to increased sales of concrete, mortar, pavement and precast, as Humberto mentioned before. Gross profit increased 5.9%, achieving €161,600,000 mainly due to lower production costs as we discontinued the use of imported clinker and maximize the use of our new and more efficient kiln in Pacasmayo as well as lower cost of raw material, mainly the coal. Consolidated EBITDA increased 6.1% this quarter compared to the same period of last year, mainly due to these efficiencies as well as to increase revenues. Speaker 300:06:57For the 1st 6 months of the year, revenues increased 1.3% when compared to the same period of 2023. Gross profit for the 1st 6 months of the year increased 7.1% when compared to the same period of previous year, mainly due to efficiencies derived from the our optimization capacity as well as lower cost of raw material. Likewise, EBITDA increased 8.1% and EBITDA margin increased 1.7 percentage points for the 1st 6 months of the year when compared to the same period of last year. Turning to operating expenses and administrative expenses increased 6% in the Q2 2024 and 2.1% in the 6 months 2024 compared to the same period of last year, mainly due to a slight increase in personnel expenses and property taxes. Selling expenses increased 11.5% and 10.2% in the Q2 2024 and the 6 months of 2024 compared to the same period of last year, mainly due to increased software and licenses, 3rd party services and personnel expenses. Speaker 300:08:15Moving on to the different segments. Sales of cement decreased 3.6% in the Q2 of 2024 and 4.1% during the 1st 6 months of the year compared to the same period of last year, respectively, mainly due to a decreased demand from the self construction segment. However, gross margin increased 3.7 percentage points during the Q2 of this year and 4.4 percentage points during the 1st 6 months of the year when compared to the Q2 of 2023 and the 1st 6 months of last year, respectively, mainly due to the cost optimization related to our optimized clinker capacity and more favorable raw material costs, as mentioned before. During this quarter, we are glad to report that sales of concrete, pavement and mortar increased 91.1 percent during the Q2 of this year and 82% during the 1st 6 months of the year when compared to the Q2 of 2023 and the 1st 6 months of 2023, mainly due to increased sales of concrete and pavement to the Pura Airport project. Gross profit or gross margin in the Q2 of 2024 was in line with the same period of last year. Speaker 300:09:42Sales of precast materials also increased 68.2% this quarter and 46.2% during the 1st 6 months of the year compared to the Q2 and the 6 months of last year, respectively, mainly due to increased public sector investments. Gross margin increased 21.3 19.9 percentage points in the 2nd quarter and the 1st 6 months of the year compared to the same period of last year, mainly due to higher dilution of fixed costs as volume increased. And profit decreased 15.4% this quarter compared to the same period last year, mainly due to a one off exchange rate gain in the Q2 of 2023 due to the completion of our Pacasmayo plant project as the equipment was paid in euros During the 1st 6 months of the year, net profit remained in line with the same period of last year. In terms of debt, our net debt to EBITDA ratio was 3.1x, which is a level we expect to sustain and progressively decrease as EBITDA increases, we currently do not plan to incur any additional debts. To summarize, this quarter's results show the benefits of our continued focus on cost management and operational efficiencies, and efficiencies allow us to capitalize on profitability beyond top line growth. Speaker 300:11:23We are confident that we will continue delivering positive results during the following quarters. Operator, can we please now open the line for questions? Operator00:11:38Yes. Thank you very much. So we will now move to the question and answer section. So we have a voice question from Peter Nelson at Max Solutions. Please go ahead. Operator00:12:11Perhaps we can come back to Peter. We have a question from Marcelo at Itau. Please go ahead. Your line is open. Speaker 400:12:19Yes. Hi, everyone. Good morning. Can you hear me? Operator00:12:22Yes, we can. Speaker 400:12:25Okay. Thank you. So my question is related to cement volumes for the second half of the year. I mean, you guys mentioned that volumes from precast and concrete for the better given the Piura Airport project and also higher public investments and so on. But on the low light here, we had this still weak bagged cement and Seavus volume. Speaker 400:12:45So could you please give a little bit more color regarding in terms of what can you expect in terms of the bagged cement volume for the second half as we also know could expect a better macro trend and so on if this could help to support higher bag of cement for the second half. So this is my first question. And the second question is related to capital allocation as the company doesn't have any major growth projects underway. If you could explain or give more color about what is the management feels for capital allocation going forward? So these are my two questions. Speaker 400:13:18Thank you. Speaker 200:13:20Yes, Marcel, thank you for the question. Like I mentioned in my brief speech, I mean, we are optimistic about the 2nd semester in terms of volumes. Usually, I mean, if you take the history, the 2nd semester usually comes better. And we are seeing quite a few public projects getting traction over the last weeks. So I think the volumes on the 2nd semester for sure will be higher than the volumes on the 1st semester. Speaker 200:13:49And regarding capital allocation, I think like Manuel said, I mean, we are in a comfortable debt level at this point. We have a club deal that we have to honor over the last 6 years and we intend to do strictly with that and we have no need for any further debt or capital at this moment. Speaker 400:14:09Okay. Thank you, guys. Operator00:14:12Thank you. Our next question comes from Natalia Leao at JPMorgan. Your line is open. Please go ahead. Speaker 500:14:19Thank you. Good morning, everyone. Thank you for taking my question. I just wanted to understand a bit better the dynamics for concrete and if you expect this volume of sales for this amount of sales to continue in the second half and maybe in 20 25? And also what can you tell us about the margins on concrete as well that we saw a bit low in the Q2? Speaker 500:14:45Thank you. Speaker 200:14:47Yes. I mean to complement my answer to Marcelo, one of also besides the fact that I mentioned the Vale investment is getting a lot of traction, we have to understand that I mean feed efficiency has been extremely good this past month and that will translate on the coming months on higher demand for cement and concrete. The same applies to agriculture. As you know both fishing and agriculture are crucial to our business because they employ thousands of people and these people usually what they do with their exceeding income is invested in improving or starting to build a home. So besides the public investment, which I think will come stronger, we're going to see a higher pool in terms of self construction, in terms of people that are employed and are having higher salaries. Speaker 200:15:34Regarding the markets, concrete and cement also, I mean, are very affected by the level of activity. As concrete recuperates, I mean, the margins will also see better numbers. Speaker 500:15:48Okay. Thank you. Operator00:15:53Thank you. So we'll just give it another moment or so. Okay. We have a text question from Gerard Forte at Integra. He asks, what explains the lower gross margins in Concrete and Pavements, considering revenue increased 91%, but we saw a decrease on margins year on year? Speaker 300:16:29Yes. Hello. Good morning. Basically, the it's basically the mix of the products that we sell in concrete. The bigger the infrastructure project is the lower margin gap. Speaker 300:16:44So the big advantage of that is that you can dilute fixed costs better. Operator00:16:55Okay. Thank you. We have one more text question. So we have a text question from Marco Mejia at CALPA who asks, do you see a recovery of cement dispatches for the 2nd semester? You mentioned new projects for the next quarters. Operator00:17:17Do you think that this will maintain the concrete demand at these levels? Speaker 200:17:21Thank you for the question, Marco. Like I mentioned in the previous questions, I see a much stronger second semester than the first one, absolutely. And I think the fact that public works are going to come into place, yes, concrete, I think, will be a very good second semester also. Operator00:17:41Great. Thank you. We have a question from Steven Matos. Please go ahead. Your line is open. Speaker 600:17:49You are paying dividends? Speaker 200:17:53That's the question? Yes. Yes. Well, the dividend policy is something that is a decision of the Board. The only thing I can say, I mean, we've been pretty consistent over the last years on our dividend policy. Speaker 200:18:08And I think I see no reason why that should change this year. But like I said, I mean, that's a decision that has to be made by the Board. Speaker 400:18:16Okay. Operator00:18:20What does this company do? Speaker 200:18:26Sorry. Can you repeat the question? Speaker 300:18:28I said Speaker 600:18:29yes, what does this company do? Speaker 200:18:33What do you mean by what does this company do? I'm confused by the question. Speaker 600:18:39Like what kind of business Operator00:18:41is the company in? Speaker 200:18:44Well, I would think that if you join the call, we are fundamentally a cement and building solutions company. Operator00:18:53Okay. So moving on, we have a question from Francisco Suarez at Scotiabank. Your line is open. Please go ahead. Hi, Francisco. Operator00:19:14Can you hear us? I think you're muted. Yes. So I'm not seeing any more questions. I'll just give it one more prompt. Operator00:19:33So if you do have a question, last chance, please press star to, otherwise perhaps we can move to closing remarks. We'll just give it another 10 seconds or so. Okay, so I'm not seeing any more questions. So perhaps we can pass the line back over to Humberto for closing remarks. Speaker 200:19:59Thank you so much. Well, I'm still surprised by last question, but this quarter we started seeing some signs of recovery in demand, which hope can be sustained in the upcoming quarters. The effect that even a moderate increase in public and private investment can happen on our revenues has been evident this quarter. We foresee this positive strength to continue and are very confident that our focus on innovation and overall business sustainability provides us with a tool to take advantage of this positive scenario. Overall, we also have a very promising second semester. Speaker 200:20:31Thank you everybody for joining this call. And as always, if you should have any further questions, you you can always contact us. Thank you and have a very nice day. Operator00:20:42That concludes the call for today. Thank you and have a nice day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallCementos Pacasmayo S.A.A. Q2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K) Cementos Pacasmayo S.A.A. Earnings HeadlinesCementos Pacasmayo S.A.A. American Depositary Shares (Each representing five Common Shares) (CPAC)April 11, 2025 | nasdaq.comCementos Pacasmayo May Offer An Adjusted 13% Earnings Yield, But Is Fairly ValuedFebruary 18, 2025 | seekingalpha.comBiggest AI gains still ahead…? (Major announcement coming)You’ve seen the headlines about Nvidia. Now Tim Sykes is sounding the alarm — because what CEO Jensen Huang is about to announce could change the AI market once again. Experts already predict the total addressable market could climb past $20 trillion. But Sykes believes most investors have missed what’s coming next. He’s tracking a new shift — and says the biggest gains are still ahead.April 22, 2025 | Timothy Sykes (Ad)Cementos Pacasmayo price target lowered to $6 from $6.50 at JPMorganFebruary 17, 2025 | markets.businessinsider.comCEMENTOS PACASMAYO S.A.A. R.U.C. N° 20419387658: Notice of Mandatory Annual Shareholders' MeetingFebruary 14, 2025 | finance.yahoo.comCementos Pacasmayo projects sustained EBITDA margins at 27% in 2025 amid volume growthFebruary 14, 2025 | msn.comSee More Cementos Pacasmayo S.A.A. Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Cementos Pacasmayo S.A.A.? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Cementos Pacasmayo S.A.A. and other key companies, straight to your email. Email Address About Cementos Pacasmayo S.A.A.Cementos Pacasmayo S.A.A. (NYSE:CPAC), a cement company, produces, distributes, and sells cement and cement-related materials in Peru. It operates through three segments: Cement, Concrete, Mortar and Precast; Quicklime; and Sales of Construction Supplies. The company's cement and concrete products are used in residential and commercial construction, and civil engineering; ready-mix concrete used in construction sites; concrete precast, such as paving units or paver stones for pedestrian walkways, as well as other bricks for partition walls and concrete precast for structural and non-structural uses; and cement-based products. It also produces and distributes quicklime for use in steel, food, fishing, and chemical industries. In addition, the company sells and distributes other construction materials manufactured by third parties, such as steel rebar, plastic pipes, and electrical wires. It offers its products directly to other retailers, private construction companies, and government entities through a network of independent retailers and hardware stores. The company was incorporated in 1949 and is headquartered in Lima, Peru. Cementos Pacasmayo S.A.A. is a subsidiary of Inversiones ASPI S.A.View Cementos Pacasmayo S.A.A. 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There are 7 speakers on the call. Operator00:00:00Good day, ladies and gentlemen. Welcome to Pacasmayo's Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. Please note that this call is being recorded. At the conclusion of our prepared remarks, we will conduct a question and answer session. Operator00:00:17I would now like to introduce your host for today's call, Ms. Claudia Bustamante, Sustainability and Investor Relations Manager. Ms. Bustamante, you may begin. Speaker 100:00:28Thank you, Tim. Good morning, everyone. Joining me on the call today is Mr. Humberto Nadal, our Chief Executive Officer and Mr. Manuel Ferreiro, our Chief Financial Officer. Speaker 100:00:38Mr. Nadal will begin our call with an overview of the quarter, focusing primarily on our strategic outlook for the short and medium term. Mr. Ferreiro will then follow with additional commentary on our financial results. We'll then turn the call over to your questions. Speaker 100:00:53Please note that this call will include certain forward looking statements. 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. Speaker 100:01:16Humberto Nazzo. Speaker 200:01:19Thank you, Claudia. Welcome everyone to our quarterly results conference call, and thank you so much for joining us today. This quarter revenues increased 3.4% year over year, showing a reversal of a negative trend that started almost 2 years ago. The increase in revenues were mainly driven by concrete and pavement sales related to the Pura Airport project, which almost in this quarter as compared to the Q2 of 2023. Furthermore, we're able to achieve a 6% increase in consolidated EBITDA, mainly due to operational efficiencies derived from our new Ken in Pacasmayo as well as favorable raw material prices. Speaker 200:01:59We are confident that the efficiencies achieved will be sustainable over time, and top line growth should sustain by the continued delivery of concrete and pavement for airport project and increased participation on public investment projects. These factors certainly make for a more promising second half of the year. Despite this increasing infrastructure rated demand, the housing sector in Peru is still by far the biggest driver of demand. According to a study conducted by Grady, a private research center in Peru, there is a requirement of 142,000 new homes every single year. Social housing programs only cover 30% of this requirement, leaving the remaining 70% up to self construction. Speaker 200:02:42On average, we have to mention that self construction process takes an appalling 16 years from the acquisition or occupation of the property to the completion of the home. During this time, families spend about 8 years in a completely precarious home and an additional 8 years in a home under construction. Dead floors are known to harbor parasites and bacteria that can cause serious illnesses, including respiratory illnesses and anemia among many others. To tackle this extremely harsh reality, we are working on a variety of different fronts. 1st, to decrease anemia and illnesses as part of our corporate social responsibility efforts, we are changing dirt floors and replacing them by concrete starting in our areas of influence. Speaker 200:03:31By the end of July, 255 floors will be completed, and our target is to build 1,000 for the North by the end of this year. Additionally, if we want to go one step beyond and ensure improvement in their overall health, this program will also provide health counseling to help our beneficiary families understand how to make and sustain those healthy lifestyle changes. As you probably already know, the self construction segment represents over 70% of our sales. As mentioned before, self construction process takes on an average 16 years. It is unacceptable for a family to have to wait this long for a proper home. Speaker 200:04:12These families are our consumers and we know that when they buy a bag of cement, what they really want is a dream home. Therefore, we are committed and working on solutions aimed at easing this unnecessary long journey. We are developing a temporary housing service that will help low income families to live in a better quality temporary homes. This temporary solution can be transferred without additional expenses to their permanent home, avoiding precarious situations and enabling its transformation for future use. On the financing side, a tremendous challenge at this point. Speaker 200:04:47We have IU, our solution designed as an intelligent purchasing method so that people are able to define their project and buy the materials that they need month by month until they have all of the materials needed to carry out their chosen project. All of these programs are absolutely aligned with our purpose of building together the future of UTMF. Finally, I would like to mention that we are very pleased with the performance of our building solutions this quarter. Concrete, mortar and pavement sales increased 91% this quarter when compared to the same period last year. Concurria pavement sales were mainly related to the Pura Airport, as I mentioned before. Speaker 200:05:26This quarter, we finished Phase 1 of the project, which included the construction of a temporary runway. Phase 2 of the project will tackle the reconstruction of the main Runway was begun at the end of this quarter and should be completed by December of this year. Precast sales this quarter also increased 46% year over year, positively affected by the acceleration of public sector projects. We expect this trend to continue as public work continues execution and new projects start coming in line in the upcoming months. I will now turn the call over to Manuel, going to more details in national markets. Speaker 200:05:58Manuel? Speaker 300:06:01Thank you, Humberto. Good morning, everyone. Our Q2 2024 revenues were $457,100,000 a 3.4% increase when compared to the same period of last year, mainly due to increased sales of concrete, mortar, pavement and precast, as Humberto mentioned before. Gross profit increased 5.9%, achieving €161,600,000 mainly due to lower production costs as we discontinued the use of imported clinker and maximize the use of our new and more efficient kiln in Pacasmayo as well as lower cost of raw material, mainly the coal. Consolidated EBITDA increased 6.1% this quarter compared to the same period of last year, mainly due to these efficiencies as well as to increase revenues. Speaker 300:06:57For the 1st 6 months of the year, revenues increased 1.3% when compared to the same period of 2023. Gross profit for the 1st 6 months of the year increased 7.1% when compared to the same period of previous year, mainly due to efficiencies derived from the our optimization capacity as well as lower cost of raw material. Likewise, EBITDA increased 8.1% and EBITDA margin increased 1.7 percentage points for the 1st 6 months of the year when compared to the same period of last year. Turning to operating expenses and administrative expenses increased 6% in the Q2 2024 and 2.1% in the 6 months 2024 compared to the same period of last year, mainly due to a slight increase in personnel expenses and property taxes. Selling expenses increased 11.5% and 10.2% in the Q2 2024 and the 6 months of 2024 compared to the same period of last year, mainly due to increased software and licenses, 3rd party services and personnel expenses. Speaker 300:08:15Moving on to the different segments. Sales of cement decreased 3.6% in the Q2 of 2024 and 4.1% during the 1st 6 months of the year compared to the same period of last year, respectively, mainly due to a decreased demand from the self construction segment. However, gross margin increased 3.7 percentage points during the Q2 of this year and 4.4 percentage points during the 1st 6 months of the year when compared to the Q2 of 2023 and the 1st 6 months of last year, respectively, mainly due to the cost optimization related to our optimized clinker capacity and more favorable raw material costs, as mentioned before. During this quarter, we are glad to report that sales of concrete, pavement and mortar increased 91.1 percent during the Q2 of this year and 82% during the 1st 6 months of the year when compared to the Q2 of 2023 and the 1st 6 months of 2023, mainly due to increased sales of concrete and pavement to the Pura Airport project. Gross profit or gross margin in the Q2 of 2024 was in line with the same period of last year. Speaker 300:09:42Sales of precast materials also increased 68.2% this quarter and 46.2% during the 1st 6 months of the year compared to the Q2 and the 6 months of last year, respectively, mainly due to increased public sector investments. Gross margin increased 21.3 19.9 percentage points in the 2nd quarter and the 1st 6 months of the year compared to the same period of last year, mainly due to higher dilution of fixed costs as volume increased. And profit decreased 15.4% this quarter compared to the same period last year, mainly due to a one off exchange rate gain in the Q2 of 2023 due to the completion of our Pacasmayo plant project as the equipment was paid in euros During the 1st 6 months of the year, net profit remained in line with the same period of last year. In terms of debt, our net debt to EBITDA ratio was 3.1x, which is a level we expect to sustain and progressively decrease as EBITDA increases, we currently do not plan to incur any additional debts. To summarize, this quarter's results show the benefits of our continued focus on cost management and operational efficiencies, and efficiencies allow us to capitalize on profitability beyond top line growth. Speaker 300:11:23We are confident that we will continue delivering positive results during the following quarters. Operator, can we please now open the line for questions? Operator00:11:38Yes. Thank you very much. So we will now move to the question and answer section. So we have a voice question from Peter Nelson at Max Solutions. Please go ahead. Operator00:12:11Perhaps we can come back to Peter. We have a question from Marcelo at Itau. Please go ahead. Your line is open. Speaker 400:12:19Yes. Hi, everyone. Good morning. Can you hear me? Operator00:12:22Yes, we can. Speaker 400:12:25Okay. Thank you. So my question is related to cement volumes for the second half of the year. I mean, you guys mentioned that volumes from precast and concrete for the better given the Piura Airport project and also higher public investments and so on. But on the low light here, we had this still weak bagged cement and Seavus volume. Speaker 400:12:45So could you please give a little bit more color regarding in terms of what can you expect in terms of the bagged cement volume for the second half as we also know could expect a better macro trend and so on if this could help to support higher bag of cement for the second half. So this is my first question. And the second question is related to capital allocation as the company doesn't have any major growth projects underway. If you could explain or give more color about what is the management feels for capital allocation going forward? So these are my two questions. Speaker 400:13:18Thank you. Speaker 200:13:20Yes, Marcel, thank you for the question. Like I mentioned in my brief speech, I mean, we are optimistic about the 2nd semester in terms of volumes. Usually, I mean, if you take the history, the 2nd semester usually comes better. And we are seeing quite a few public projects getting traction over the last weeks. So I think the volumes on the 2nd semester for sure will be higher than the volumes on the 1st semester. Speaker 200:13:49And regarding capital allocation, I think like Manuel said, I mean, we are in a comfortable debt level at this point. We have a club deal that we have to honor over the last 6 years and we intend to do strictly with that and we have no need for any further debt or capital at this moment. Speaker 400:14:09Okay. Thank you, guys. Operator00:14:12Thank you. Our next question comes from Natalia Leao at JPMorgan. Your line is open. Please go ahead. Speaker 500:14:19Thank you. Good morning, everyone. Thank you for taking my question. I just wanted to understand a bit better the dynamics for concrete and if you expect this volume of sales for this amount of sales to continue in the second half and maybe in 20 25? And also what can you tell us about the margins on concrete as well that we saw a bit low in the Q2? Speaker 500:14:45Thank you. Speaker 200:14:47Yes. I mean to complement my answer to Marcelo, one of also besides the fact that I mentioned the Vale investment is getting a lot of traction, we have to understand that I mean feed efficiency has been extremely good this past month and that will translate on the coming months on higher demand for cement and concrete. The same applies to agriculture. As you know both fishing and agriculture are crucial to our business because they employ thousands of people and these people usually what they do with their exceeding income is invested in improving or starting to build a home. So besides the public investment, which I think will come stronger, we're going to see a higher pool in terms of self construction, in terms of people that are employed and are having higher salaries. Speaker 200:15:34Regarding the markets, concrete and cement also, I mean, are very affected by the level of activity. As concrete recuperates, I mean, the margins will also see better numbers. Speaker 500:15:48Okay. Thank you. Operator00:15:53Thank you. So we'll just give it another moment or so. Okay. We have a text question from Gerard Forte at Integra. He asks, what explains the lower gross margins in Concrete and Pavements, considering revenue increased 91%, but we saw a decrease on margins year on year? Speaker 300:16:29Yes. Hello. Good morning. Basically, the it's basically the mix of the products that we sell in concrete. The bigger the infrastructure project is the lower margin gap. Speaker 300:16:44So the big advantage of that is that you can dilute fixed costs better. Operator00:16:55Okay. Thank you. We have one more text question. So we have a text question from Marco Mejia at CALPA who asks, do you see a recovery of cement dispatches for the 2nd semester? You mentioned new projects for the next quarters. Operator00:17:17Do you think that this will maintain the concrete demand at these levels? Speaker 200:17:21Thank you for the question, Marco. Like I mentioned in the previous questions, I see a much stronger second semester than the first one, absolutely. And I think the fact that public works are going to come into place, yes, concrete, I think, will be a very good second semester also. Operator00:17:41Great. Thank you. We have a question from Steven Matos. Please go ahead. Your line is open. Speaker 600:17:49You are paying dividends? Speaker 200:17:53That's the question? Yes. Yes. Well, the dividend policy is something that is a decision of the Board. The only thing I can say, I mean, we've been pretty consistent over the last years on our dividend policy. Speaker 200:18:08And I think I see no reason why that should change this year. But like I said, I mean, that's a decision that has to be made by the Board. Speaker 400:18:16Okay. Operator00:18:20What does this company do? Speaker 200:18:26Sorry. Can you repeat the question? Speaker 300:18:28I said Speaker 600:18:29yes, what does this company do? Speaker 200:18:33What do you mean by what does this company do? I'm confused by the question. Speaker 600:18:39Like what kind of business Operator00:18:41is the company in? Speaker 200:18:44Well, I would think that if you join the call, we are fundamentally a cement and building solutions company. Operator00:18:53Okay. So moving on, we have a question from Francisco Suarez at Scotiabank. Your line is open. Please go ahead. Hi, Francisco. Operator00:19:14Can you hear us? I think you're muted. Yes. So I'm not seeing any more questions. I'll just give it one more prompt. Operator00:19:33So if you do have a question, last chance, please press star to, otherwise perhaps we can move to closing remarks. We'll just give it another 10 seconds or so. Okay, so I'm not seeing any more questions. So perhaps we can pass the line back over to Humberto for closing remarks. Speaker 200:19:59Thank you so much. Well, I'm still surprised by last question, but this quarter we started seeing some signs of recovery in demand, which hope can be sustained in the upcoming quarters. The effect that even a moderate increase in public and private investment can happen on our revenues has been evident this quarter. We foresee this positive strength to continue and are very confident that our focus on innovation and overall business sustainability provides us with a tool to take advantage of this positive scenario. Overall, we also have a very promising second semester. Speaker 200:20:31Thank you everybody for joining this call. And as always, if you should have any further questions, you you can always contact us. Thank you and have a very nice day. Operator00:20:42That concludes the call for today. Thank you and have a nice day.Read morePowered by