CPAC

Good day, ladies and gentlemen. Welcome to Pacasmayo first quarter 2026 earnings conference call. At this time, all participants are in 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. I would now like to introduce your host for today's call, Mrs. Claudia Bustamante, Investor Relations Managing Director. Mrs. Bustamante, you may begin.

Thank you, Rafael. Good morning, everyone. Joining me on the call today is Mr. Humberto Nadal, our Chief Executive Officer, and Miss Ely Hayashi, our Chief Financial Officer. Mr. Nadal will begin our call with an overview of the quarter, focusing primarily on our strategic outlook for the short and medium term. Miss Hayashi 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 this risk are set forth in the company's regulatory filings. With that, I'd now like to turn the call over to Mr. Humberto Nadal.

Thank you, Claudia. Welcome everyone to today's conference call, and thank you for joining us today. As we discussed last quarter, our company has entered a transcendental new chapter in its almost 70-year history. On March 30, 2026, a significant milestone was finalized with the completion of the acquisition of Inversiones ASPI by Holcim Ltd, which now holds a 50.01% controlling interest in Cementos Pacasmayo. This change of control marks a powerful new stage in our evolution, opening global opportunities for our teams and promoting responsible, sustainable construction on a much wider scale. While we look forward to collaborating with a global leader like Holcim, I want to express my deepest and sincere gratitude to the Hochschild Group for the decades of vision and leadership that built the strong foundations upon which we stand today.

Our essence, values, and commitment to the development of Peru remain absolutely intact. I would like now to move on to an overview of our results for the first quarter of 2026. During this period, we achieved significant growth and demonstrated remarkable resilience. We saw strong momentum in sales volume with an 11.7% increase year-over-year, driven primarily by higher demand for cement and concrete. Our solid operational performance was further reflected in our profitability. Consolidated EBITDA reached PEN 177.9 million, an outstanding 32.1% increase compared to the first quarter of 2025. We achieved a significant expansion in our EBITDA margin, which reached 32%, up from 27% in first quarter of 2025. This was driven by disciplined cost control and gross margin expansion in our core businesses due to operational efficiencies.

Driven by our commitment to leading the industry responsibly, we reached historic achievements in sustainability this quarter. For the sixth consecutive year, we secured a position in the S&P Global Sustainability Yearbook 2026. Most notably, we have now entered the global top 10% of the construction materials industry, validating the continuous evolution of our ESG management. In terms of social impact, we recently formalized a strategic partnership with the Inter-American Cement Federation, FICEM, and Habitat for Humanity. This alliance integrates our local Sueños en Concreto program into the 100,000 Floors to Play On initiative, aiming to replace dirt floors with concrete to improve the health and quality of life for thousands of families in northern Peru. As we mentioned, we are very happy with the beginning of this year, and we hope this year will continue in a similar manner.

I will now turn the call over to Ely to go into a more detailed financial analysis.

Thank you, Humberto. Good morning, everyone. For the first quarter of 2026, our revenue growth was very encouraging. Total revenues reached PEN 555.7 million, representing an 11.3% increase compared to the first quarter of 2025. This growth was primarily driven by a robust 11.7% increase in total sales volumes across cement, concrete, and precast. Specifically, cement volumes show strong resilience, particularly in the bag cement segment, which continues to be our primary driver in the self-construction market in the north of Peru. Additionally, we saw a pickup in concrete sales as infrastructure projects in the region began to regain momentum. Gross profits for the quarter increased significantly, supported by higher volumes and improved operational efficiency. We are seeing the continued benefits of our optimized production at the Pacasmayo plant.

Turning now to OpEx. Administrative expenses for the first quarter decreased slightly by 0.7% compared to the first quarter of 2025, mainly due to lower personal expenses, primarily reflecting a lower collective bargaining bonus than in the first quarter of 2025. Selling expenses increased 33.5% in the first quarter of 2026 compared to the first quarter of 2025, mainly due to higher advertising and promotion expenses related to marketing and loyalty programs from affiliated retailers, as well as an increase in provision for doubtful payments.

Moving to profitability, our consolidated EBITDA reached PEN 179.9 million, a remarkable 32.1% increase compared to the first quarter of 2025. This was driven by the combination of higher revenues and moderate price adjustment in the cement segment, as well as a significant reduction in unit costs across our cement and concrete business lines. Along this same line, our EBITDA margin expanded to 32%, a 5 percentage-point improvement over the first quarter of 2025. This level of profitability reflects our focus on operational excellence and disciplined expense management. Moving on to the different segments, cement revenues grew 16% to PEN 466.4 million, representing 86.5% of our total sales of the quarter. This performance was primarily driven by higher sales volumes of bag cement for the self-construction segment.

The gross margins on cement expanded to 48.2%, up 1.5 percentage points from first quarter 2025. This improvement was driven by higher volumes, a slight improvement in average prices, and lower unit cost resulting from reduced downtime of our kilns. For the concrete, pavement, and mortar segment, revenues decreased 15.2% to PEN 66 million. This decline was mainly due to a higher comparative base in the first quarter of 2025, which included significant volume from the Piura Airport project. Despite lower volumes, the gross margin saw a remarkable expansion of 18.3 percentage points, reaching 16.1%. This increase in profitability was mainly driven by sales to the Yanacocha project, which required more specialized higher-margin concrete solutions compared to a lower-margin airport work.

Precast sales increased 4.8% to PEN 6.6 million this quarter when compared to the same period of last year. This growth was supported by increased demand from the public sector. Gross margins for precast reached 9.1%, a significant improvement of 7.5 percentage points over the previous year. This was primarily achieved through higher sales volumes, which allow for better dilution of fixed costs. Consolidated net income for the quarter was PEN 81.9 million, a remarkable 55.4% increase year-over-year. This growth is a direct result of higher operating profits and a decrease in financial expenses, and we continue to successfully reduce our leverage. Our net debt-to-EBITDA ratio stood at 2.6x.

To summarize, we continue to deliver solid financial results this quarter by capitalizing on favorable market conditions while diligently managing costs to achieve sustained profitability. Operator, can we now open the call for questions?

Thank you. Thank you very much for the presentation. We will now move to the question-and-answer section. If you would like to ask a question, please press star two on your phone and wait to be prompted. If you are dialed in by the web, you can type your question in the box provided or request to ask a voice question. We'll just wait a moment or two for the questions to come in. Once again, if you are connected via the phone and you would like to ask a voice question, please press star two on your phone keypad and wait for your name to be prompted. If you are connected via the web, you can also request to ask a voice question or send your question as a text.

Okay. Looks like there are no questions from the audience, so I'm gonna pass the line back to the team for their closing remarks.

In closing, our remarkable results this quarter reflect both the resilience of the northern Peruvian market and our team's exceptional execution. While our double-digit revenue growth highlights the strength of our region, it is our disciplined management that delivered such a 32% EBITDA margin, one of the highest we have achieved in recent years. This peak in profitability is matched by historic sustainability milestones, not only our entry into the top 10% of S&P Global Sustainability Yearbook, and our tangible social impact through the 100,000 Floors initiative. Ultimately, these results and our finalized partnership with Holcim serve as a powerful endorsement of our strategy and our unwavering belief in the long-term potential of Peru as we focus on driving the sustainability. The sustainable progress of our country. We have one question from Integra.

Yes. Maybe I will quickly read that question from [Gerard Ford].

Yes, please.

From Integra. Congratulations on the strong Q1 2026 results. Margins and profitability clearly exceeded expectations. I have two questions. Gross margins expanded materially and exceeded expectations. How much of the improvement in cement unit costs do you consider structural, operational efficiencies, energy bagging, versus more cyclical factors such as volume and mix? Selling expenses increased meaningfully this quarter, driven by marketing and higher credit provisions. How much of this increase should we view as recurring versus one-off or timing related?

Yes. Thank you. In terms of your question, I mean, these are not really cyclical factors. As you know, I mean, our cement sales in the past is very little of cyclical in the second semester of the year. Usually, the first quarter is the weakest one, but not by a long shot. I think in terms of selling expenses, we are. We keep investing in positioning our brand. We keep investing in securing our dealers and our distributors are very happy. I think, I mean, our plans now is to maintain the current margin in terms of EBITDA profitability. To add in terms of the marketing, I mean, to be just absolutely precise. I mean, in the second semester, they may be a little more in defense of how we are doing the provisions.

Thank you. We also got a voice question from Gabriel from Scotiabank. Gabriel, please go ahead. Your line is now open.

Hi. Thank you. Congrats on the results. Just a quick follow-up question. Now that Holcim has completed the acquisition and the controlling stake, can you elaborate on any changes that we should expect on capital allocation, strategic priorities, perhaps dividends? Thank you.

Thank you for your question. I mean, I think, so far, we'll have to wait to see what they decide as new shareholders. For the time being, we keep the course steady.

Okay. Thank you very much.

Okay. Thank you. Thank you very much. Maybe just a quick final reminder is for the rest of the participants, if you would like to ask a voice question, and you are connected via the phone, please press star two on your phone keypad and wait for your name to be prompted. If you are connected via the web, you can also request to ask a voice question or send your question as a text. Okay. We are seeing no further questions. Maybe I will pass the line back to the management team in order to finalize the call.

Like I said before, I mean, we've had a very exciting beginning of the quarter. I think, I mean, it's all a reflection of an incredible team always pushing forward. It's also an enormous reflection on the potential and the durability and the resilience of a country and specifically of a region that has shown always good attitude forward. We are very convinced of the future, and the best is still to come. Thank you, everybody, for joining us today. Should you have any further questions, you know where to find us. Thank you.

Thank you. This concludes our call for the day. We are now closing all the lines. Goodbye.

Good day, ladies and gentlemen. Welcome to Pacasmayo's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note that this call is being recorded. I would now like to introduce you to your host for today's call, Ms. Claudia Bustamante, Investor Relations Managing Director. Mr. Bustamante, you may begin.

Thank you, Louis. Good morning, everyone. Joining me on the call today is Mr. Humberto Nadal, our Chief Executive Officer; and Ms. Ely Hayashi, our Chief Financial Officer. Mr. Nadal will begin our call with an overview of the quarter focusing primarily on our strategic outlook for the short and medium term. Ms. Hayashi 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.

Thank you, Claudia. Welcome, everyone, to today's conference, and thank you for joining us today. As I'm sure most, if not all of you, already know by now, on December 16, a significant milestone was achieved with the announcement of an agreement for Holcim to acquire Inversiones Aspi which owns 50.01% controlling stake in Cementos Pacasmayo. The agreed upon valuation of PEN 5.1 billion represents a strong multiple of 9x record EBITDA calculated based on the last 12 months ending July 2025. This transaction is pending regulatory approvals and is expected to close in the upcoming months. However, much more relevant than this final evaluation is the fact that Holcim's decision serves as a powerful endorsement of Pacasmayo's long-term strategy, its operational excellence and the consistent hard work delivered by generations of employees over nearly 7 decades. This milestone underscores the strength of our team, our commitment to our values and our dedication to building a profitable, ethical world-class company with a clear sales of purpose. We are immensely proud of a global leader like Holcim, which we have admired so long has placed it's trust in Pacasmayo and in Peru. Looking forward we'll collaborate to promote sustainable development, create new opportunities and contribute to the growth of both the country and the wider region. That being said, I would like now to move on to a quick overview of our results for the quarter and for the full year 2025. We continue to see very strong momentum in sales volumes with an 8.2% decrease this quarter compared to the same period of last year and a very solid 7.2% increase from full year 2025 relative to 2024. This growth was driven mainly by stronger demand for infrastructure projects and a very consistent performance in the always reliable self-construction segment. Our excellent financial performance this quarter was driven by disciplined execution and a relentless focus on cost efficiencies. Excluding the one-off expenses related to the share purchase agreement signed with Holcim, EBITDA reached $158.7 million, an 11.4% increase compared to the same period last year. This growth confirms the success of our efforts to permanently enhance profitability across our market. This strong quarter capped off a record-breaking year once again, as we have done in 2024. We achieved an all-time high EBITDA of PEN 594.2 million for the full year, marking a 6.4% year-over-year increase when excluding one-off expenses. Given our commitment to operational excellence and climate action, we are continuously making progress in decarbonizing operations. We are proud to have announced that we have achieved 3 star recognition from Peru's Minister of Environment, MINAM through the Peru carbon footprint [indiscernible]. This recognition is awarded for demonstrating consecutive years of reduced greenhouse gas emissions, and it followed a collaborative effort with MINAM, including the submission of verified data for 2022-2024 period. Specifically, our Rioja plant recently earned its [indiscernible] start for 2024 emission reductions, building upon the recognition previously secured by both our Pacasmayo and Piura plants for our 2023 performance. In [ the same spirit ], we are very pleased to highlight our continued leadership in the Merco ESG responsibility ranking. For a tenth consecutive year, we are recognized as an industry leader in this evaluation, which assesses the three dimensions of sustainability: environment, society and customers, and ethics and corporate governance. Furthermore, we maintained a top-tier position in the general ranking of the most responsible companies in Peru, placing ninth overall this year, which is a tremendous achievement for a regional company like ours. This recognition strongly reinforced our commitment on sustainability strategy, which remains central to our core business operations. We are confident that these positive results are only the beginning that the momentum we've built will continue to strengthen in the future. At the same time, the confidence placed in us by such a prestigious global cement player reinforces our focus on operational excellence, profitability, disciplined execution and always people at the center of every strategy. We're confident that the momentum we have built is there and we remain motivated to keep improving our performance while continuing to serve our clients, support our communities and most of all, always continue the development of our country. I will now turn the call over to Ely, our CFO, to go into a more detailed financial analysis. Ely?

Thank you, Humberto, and good morning, everyone. For the first quarter of 2025, revenues increased by 6.2% year-over-year, reaching PEN 559.5 million. This growth was primarily driven by higher sales of [indiscernible] cement along with increased sales of concrete and [ pigment ] for infrastructure [ prior ]. We delivered strong profitability this quarter with gross profit increased 11.4% year-over-year. This improvement was mainly due to a lower cost of raw material, greater consumption of our own clinker and operational efficiencies due resulting from our maintenance and production plans. Consolidated EBITDA excluding transactional expenses also rose by 11.4 percentage to PEN 158.7 million. Looking at the full year 2025, revenues grew by 7 percentage compared to 2024. Gross profit increased by 10.8% driven by the same factors as the quarter, lower raw material costs, higher use of our own clinker and operational efficiencies from our production plan. Full year EBITDA after excluding the one-off transactional expenses, increased by 6.4 percentage over 2024. Turning now to operating expenses. Administrative expenses for the first quarter 2025 increased by 5.7 percentage and by 50% for the full year -- corresponding period in 2024. This was mainly contributable to higher personnel expenses resulting from collective [indiscernible] negotiation from our labor union. Selling expenses decreased by 8.3% in the fourth quarter compared to the previous year, primarily due to lower depreciation and reduced advertising and promotion expense. However, for the full year 2025, selling expenses increased by 40% driven by higher advertising and promotion expenses during the first 9 months of the year as well as the union models mentioned before. In the first quarter of 2025, cement sales saw a notable increase of 30.6 percentage. This growth was primarily fueled by robust demand for fast cement within the third construction sector. Likewise, for the full year 2025, cement sales increased 8.7% when compared to 2024. This elevated in demand is linked to the continued strength of the agro, industrial and fishing sector which are key income drivers in the North. Regarding profitability, the gross margin increased by 0.4 percentage points in the fourth quarter of 2025 compared to the fourth quarter of 2024. Over the full year, gross margin increased by 1.9 percentage points versus 2024. These margin improvements are mainly attributable to a reduction in raw material costs and lower consumption of imported clinkers. During this quarter, concrete, pavement and mortar sales decreased by 25.1% year-over-year. This decline was mainly due to lower sales volume as the Motupe riverbank defense project was put on standby. We note, however, that this project has been prioritized to restart in the near future. Conversely, for the full year 2025, sales increased by 6.3%, mainly due to higher volume of mortar and concrete for infrastructure projects. Gross margin decreased by 7.8 percentage points in the fourth quarter of 2025 and 3.2 percentage points for the full year. This contraction was primarily due to the execution of the Piura airport project and lower [ fixed ] cost dilution reported from the hold of the Motupe project. During 2025, sales of concrete, pavement and mortar increased 6.3%, mainly due to higher sales volumes of mortar and concrete for infrastructure projects. Gross margin decreased 7.8 percentage points in the fourth quarter of '25 compared to [indiscernible] in 2024 and 3.3 percentage points in compared to 2024. This decrease was mainly due to the execution of the Piura airport project as well as lower dilution of the stock from the [ hault ] of the Motupe project as mentioned before. Regarding precast materials, sales decreased by 16% in the fourth quarter compared to the fourth quarter of 2024, mainly due to lower sales volume and a high comparative base in the fourth quarter '24 from a road improvement project. However, full year 2025 sales increased by 3% driven by higher demand for the public sector. Gross margin improved by 5.4 percentage points in the fourth quarter of 2025 and 1 percentage points in 2025, lately due to relative pricing and higher dilution of fixed costs. Consolidated net income for the quarter was negative due to the transactional expenses mentioned before. Excluding this one-off expenses, [ net income ] would have been PEN 59.8 million, making a 19.6% increase over the same period last year. Similarly, for full year 2025 net income, including the expenses would have been PEN 231.8 million, an increase of 16.5% compared to 2024. Our net debt to EBITDA ratio grew at 2.8x. We continue to lower our debt to amortization payments, although it was partially offset by a lower EBITDA figure. To summarize, we continue to deliver solid financial results this quarter by capitalizing on favorable market positions while significantly managing cost to achieve sustained profitability. Operator, can we now open the call for questions?

[Operator Instructions] So our first question is from Johan Clavijo from Sagil Capital. Thank you for the call. Could you please provide more details about the transaction with Holcim? Which steps are planning to close the transaction? Is there any risk we should be aware of? And how do you feel about the regulatory approvals for the deal?

Thank you. Like I explained in the transaction, [indiscernible] Holcim has acquired Inversiones Aspi who controls 50.01% of the common shares of Pacasmayo. We are waiting for [ in the copy ] approval. The process is running smooth, and we expect it to be approved in the coming months. That's why we can't comment at this point, but we don't see anything coming up.

Thank you. Our next question is from Mariane Tadeo from CreditCorp. Thanks for the presentation. Please, could you explain why your acquisition-related expenses are assumed by Pacasmayo and why are they so high?

Yes. We -- I mean, -- most of the agreed transaction expenses are related to change of control issues that were -- I mean, contracts that were in the company for a very long time. Part of these transaction expenses will be all seen by Holcim [indiscernible] all of it was approved by our Board, and we consider that, I mean, given the price achieved by the -- for the sales of the company. This was very reasonable and had to do with contractual obligations [indiscernible]. And like I said, part of these expenses will be assumed by -- will be the next [indiscernible] price.

Our next question is from Gerald Fort from AFP Integra. Could you help us understand why Pacasmayo had to recognize the PEN 77 billion to PEN 80 million in expenses related to the Holcim transaction, considering that Holcim is acquiring Aspi's majority stake not the company itself. And the deal is still pending approval depending on the [indiscernible] approval. What about the obligations required Pacasmayo to incur these costs?

Like I said, this was discussed in the Board [indiscernible] decided to be done like this. We don't foresee any impediments by the authority. I mean we're very respectful of all the legal framework and we think this will be approved. And this was a decision that I can say, this has to do with contracts that are already in place for many, many years that had to do with the change of control. And if I may add, and we have -- please realize, I mean, as we are all aware, after this transaction of buying [indiscernible] Holcim is required by law to launch an [indiscernible] for part of the remaining shares. So we consider -- the board considers that this transaction that will benefit all shareholders, and only the controlling shareholder. And the price has to be at least the price that was paid by -- for the controlling shares.

We have a question from Gabriel Ramos from Kallpa. Given the pause of the Motupe River Bank protection project and its impact on volumes and margins in the fourth quarter of 2025. Should we expect similar project-related disruptions or margin pressures in the coming quarters? Additionally, how could this affect concrete pavements and mortar performance and overall margins looking into 2026?

I think margins -- I mean every concrete project has in particular reality margins. Looking forward, we think EBITDA margins should remain at the levels we have achieved on the -- over the last year, maybe a little bit higher. We have some energy-saving projects coming in the second semester of this year as we enhance margin. So have very positive outlook in what's going to happen in the coming -- in this year with the margins. And also, we have to -- we hope that the [indiscernible] traditionally start spending slow at the beginning of the year. We have election coming up in two months, I mean, this should probably pick up after the second, third quarter of this year.

We have a follow-up from Gerard Fort from AFP Integra. Could you provide any guidance on revenue growth and EBITDA margins expected for 2026?

Well, we can't say. I mean, we achieved a record EBITDA year on 2025, and we persist that this year should be stronger than the last one in terms of volumes. We also think price will remain in a very competitive space as they have been giving us very good margin. So the results coming -- going forward, we're optimistic about the volume growth for the year, and we are also very optimistic that the EBITDA margins will remain stable by pointing towards an increase due to some efficiencies like I mentioned, [ energy ] among them in the second semester of this year.

Thank you very much. We would like to thank everyone for the questions and the participation. I'll now hand it to Humberto for the closing remarks.

We are indeed deeply proud that global leaders such as Holcim has placed its trust in Pacasmayo and more importantly, in Peru. This investment is a very strong validation of what we have long believed and consistently communicated that Peru's long-term growth potential remains solid and that the country offers meaningful opportunities for sustainable development and value creation. I think as CEO, this consequence of the effort displayed by thousands of employees over the years, and we are all extremely proud of this transaction. And I'm sure this will bring only good news for all stakeholders, the shareholders, the employees, our communities and the country. Thank you, everybody, for today and always thank you for your renewed interest in our company. Have a very nice day.

We'll now be closing out the lines. Thank you, and have a nice day.

Good day, ladies and gentlemen. Welcome to Pacasmayo Third Quarter 2025 Earnings Conference Call. [Operator Instructions] 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, Investor Relations Managing Director. Ms. Bustamante, you may begin.

Thank you, Rafael. Good morning, everyone. Joining me on the call today is Mr. Humberto Nadal, our Chief Executive Officer; and Ms. Ely Hayashi, our Chief Financial Officer. Mr. Nadal will begin our call with an overview of the quarter, focusing primarily on our strategic outlook for the short and medium term. Ms. Hayashi 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.

Thank you, Claudia. Welcome, everyone, to today's conference call, and thank you for joining us today. I would like to start with a quick overview of our results for the quarter. We continue to see solid momentum in sales volume with a 9% increase compared to the same period of last year. This growth was driven mainly by stronger demand from infrastructure projects and a consistent performance in the Self-construction segment. Gross profit increased by 14.4%, reflecting the impact of our ongoing efforts to improve cost efficiency and strengthen profitability. These efficiencies transferred into bottom line growth as net income also increased 14.4% this quarter, reaching PEN 71.5 million this quarter and a very solid accumulated growth of 15.6% for the first [indiscernible] months of this year. Moving on to the progress of our strategy. We continue to be at the forefront when it comes to advancing innovative building solutions, developing those that promote more efficient, safe and sustainable construction. A prime example of this is an industrial langard that integrates prefabrication and B-methodology, technologies identified by the World Economic Forum as having the greatest transformative potential for our industry. This strong combination allows us to significantly reduce execution times, ensure operational continuity, enhance quality, minimize waste and strengthen the safety of our teams. In the same spirit of innovation and collaboration, we are working closely with Newmont and Bechtel Corporation in the construction of our water treatment plant at the Yanacocha operation. Treating acidic water in mining is essential for environmental sustainability, helping maintain a balance between economic development and responsible use of natural resources. By ensuring proper water management, we not only reduce environmental impact, but also preserve resources for future generations. Both of these projects are clear examples of how we are adapting our products and services to meet current and future demand, always, and I stress always with a client-centric view and aligned with our purpose. Our reputation is not built on words, but on actions. And this year, we once again demonstrated our consistency and purpose truly make a difference. For the third consecutive year, we proudly ranked among the top 10 companies in the American corporate reputation ranking, a recognition that affirms our commitment to responsible, transparent and always ethical management. Reputation after all is simply the result of what we do every day. We're confident that these positive results are only the beginning and the momentum we've built, we will continue to strengthen in the coming quarters because ultimately, our long-term success stems from a simple conviction doing what's right for our clients, our communities, especially for our country. I will now turn the call over to Ely to get into more detailed financial highlights.

Thank you, Humberto, and good morning, everyone. This quarter's revenues increased 10.9% compared to the third quarter of 2024, mainly due to the increase in sales of concrete and pavement for infrastructure projects as well as bagged cement, reaching PEN 574.1 million. During the same period, gross profit increased 14.4% when compared to the same period of the previous year, mainly due to a decrease in cost of raw material on the above mentioned higher revenues. Consolidated EBITDA was PEN 160.6 million this quarter, a 3.9 percentage increase when compared to the same period of 2024, mainly due to the previously mentioned increased operating income. For the first 9 months of the year, revenues increased 7.3 percentage when compared to the same period of 2024. Gross profit during this same period also increased 10.5 percentage when compared to the same period of 2024, mainly due to lower cost of raw material, higher consumption of our own clinker as well as the operational efficiencies derived from our maintenance and production plan. Likewise, EBITDA increased 4.6 percentage when compared to the same period in 2024. Turning on to operating expenses. Administrative expenses for the third quarter of 2025 increased 20.2% when compared to the third quarter of 2024. Likewise, administrative expenses for the first 9 months of the year increased 18.7% when compared to the same period of the previous year. This increase was mainly due to higher personnel expenses because of the union bonus. Selling expenses increased 25.5 percentage during the third quarter of 2025 and 24% during the first 9 months of the year when compared to the same period of 2024, respectively. This increase was mainly due to higher advertising and promotion expenses, as part of our commercial strategy focusing on our product attributes as well as the union bonus mentioned before. Moving on to the different segments. Sales of cement increased 10.4 percentage this quarter when compared to the same period of last year, mainly due to increased demand. Gross margin increased 1.6 percentage points during the same period when compared to the third quarter of 2024, mainly due to lower cost of coal and energy. For the first 9 months of the year, results were similar with sales increasing 7 percentage and gross margin increasing 2.5 percentage when compared to the same period last year. During this quarter, concrete, pavement and mortar sales increased 26.3 percentage when compared to the same period in 2024, mainly due to increased sales of concrete for infrastructure projects such as the Tarata Bridge and the Yanacocha water treatment plant. Gross margin increased 2.6 percentage points this quarter when compared to the same period of 2024, mainly due to higher dilution of fixed costs. For the first 9 months of this year, sales of concrete, pavement and mortar increased 19.5 percentage, mainly due to increased demand for infrastructure projects. However, gross margin decreased 2.3 percentage points during the first 9 months of the year when compared to the same period of last year. Regarding precast materials, sales increased 23% this quarter when compared to the third quarter of last year and 11.6% during the first 9 months when compared to the same period of 2024, mainly due to a strong increase in sales of [indiscernible], the most profitable product within the precast line. Gross margin this quarter and during the first 9 months of the year was higher by 5.6 and 1.3 percentage points, respectively, compared to the same period of 2024. Moving on to our consolidated results. Net income for the period increased 14.4 percentage this quarter when compared to the third quarter of 2024 and 15.6 percentage during the first 9 months of the year when compared to the same period of 2024, primarily due to higher operating income, lower interest payments due to debt amortization and a favorable foreign exchange rate effect. Finally, in terms of debt, our net debt-to-EBITDA ratio was 2.5x as we continue to delever because of both higher EBITDA and debt amortization payments. To summarize this quarter, we continue delivering solid financial results, making the most of our favorable market conditions while managing costs in order to achieve profitability. Operator, can we now open the call for questions.

[Operator Instructions] We have our first voice question coming from Marcelo Furlan from Itaú BBA.

I have two questions. The first regarding volumes and the second one regarding capital allocation. So for volumes, you guys mentioned in the release that you guys expected an accommodation at least until April 2026 ahead of the federal elections. So I'd like to understand what to expect in terms of cement volumes performance in the country and then also for the company? And also what we expect after that? Do you guys still have an expectation or maybe it's too early to say after the elections, so could cement volumes evolve? And my second question regarding capital allocation is, what has driven the CapEx deployments to date? And what could we expect for -- in terms of for 2026? And also in terms of dividends, could we see maybe similar dividends or yield levels as you saw -- announced in October around [indiscernible] expect similar levels for 2026? So these are my questions.

Marcelo, thank you. I'm trying to answer your questions even though the line was kind of on and off. So I'm trying to figure out your questions. I'm going to try to answer. If I don't, please, you can try again to ask. In terms of volumes, this year has been very positive. I think the north is growing -- the north part of Peru is growing above the national average, which is pretty flat. But we think that the remaining quarter of this year should see the same level of activity. I mean, we mentioned Yanacocha, we mentioned Tarata, self-construction, they all seem to be pretty strong. When you -- and in general, there is a concern about the [indiscernible] coming next year, I think we've had 7 presidents over the last 8 years. We've had many elections going left, right, up, down, whatever. And it seems that 80% of the economy of Peru doesn't really care much about that. So we don't see really an impact of the election. We have a recently appointed President, he is pushing very strongly for the regional governments to spend the money they have left for the remaining part of the year. I read today that 50% is normal. At this point, being 9 months of the year, only 50% of the budget has been spent in regional government. So I don't see the electoral situation affecting too much, either self-construction or infrastructure projects. I don't really quite heard your second part, but I think it has to do with debt. I mean, if not, please correct me. And like Ely mentioned, I mean, we keep lowering our debt, both because we are paying the club deal that is -- we have 4, 5 years remaining and also because the EBITDA keeps being at a higher level. Like I said, communication was poor, if you want to rephrase the question, we can try that.

Yes. The first question was answered. The second was actually related to the CapEx deployment to date. So with the CapEx deployments and what we expect in terms of for '26? And the second part of the question is regarding dividends, we could see similar dividend expected for '26 as we saw now announced in October?

Once again, I know what's wrong with your [indiscernible], but to do with the CapEx, I mean, our sustaining CapEx has remained around PEN 100 million, which is roughly around PEN 30 million over the last 2, 3 years, except for 2021 when we did kiln number four in Pacasmayo, that level should remain pretty steady. And I don't know if your questions have to do with dividends. I mean, we just announced a dividend last week in line with previous years, even though probably net profit will be up in the double-digit field for the rest of the year. We remain -- we decided -- the Board decided to keep the dividend PEN 190 million. I think in line with what Ely was mentioning, keep lowering the debt at the level-1 and we think it's a reasonable dividend yield and keeps everybody pretty much happy and the company financially very solid.

So we are moving to the next question, which is a text question from Cesar [indiscernible]. Considering that electoral cycles often lead to a pause in private investment and shift in public spending priorities, how are you adjusting your commercial and operational strategy to sustain volumes and margins in an environment where project execution may temporarily slow down? Do you see opportunities to gain market share if other players reduce their activity?

Cesar, I mean, with all respect, I mean, I differ hear in your view of what happens in Peru in the electoral period. I think over the last periods, companies, private sector have learned that, I mean, we have to keep going. I just had a chance to write an article that will be published a week from now for a National [indiscernible] Association saying that private sector, and I mean the small entrepreneur all the way to a big corporation like us, we cannot stop. The country keeps going, the country keeps growing. We have elections every 5 years, but we change Presidents on average every 3 years. So we have to keep going. And I think this is part already on the decision-making process of companies. I mean, you see [indiscernible] going ahead. You see many announcements happening over the last 60, 90 days, and they're going all across election. So nobody is really waiting for the March elections because if you have a leading position, no matter what is your industry, if you decide not to invest, somebody else will do it. And in terms of opportunities to gain market share. I mean, we fight for our market share every single day, but it's election time and election time arrived is basically the same. As Ely mentioned, we have increased marketing expenses because we defend clearly our position in the market, but that is really independent of whether there's an election or not in the short term.

Our next text question comes from Giovanni Sánchez from Prima AFP. Could you explain the extraordinary increase in financial income to PEN 8.7 million in the third quarter -- next text question comes from Mariane Goñ from CrediCorp Capital.

So I'm going to take it here, and there's a question from Giovanni Sanchez saying, could you explain the extraordinary increase in financial income to PEN 8.7 million in 3Q '25. Any guidance -- okay. That increase has to do fundamentally because we want to try [indiscernible] over mining royalties. This lasted, I think, over 10 or 12 years. And that meant an extraordinary income for us, and that's why the financial income changed. Any guidance for the last part of the year, like I said, I think volumes should remain strong. Usually, seasonality helps us in the second part of the year. So we're doing that. And in terms of 2026, a little bit too soon to tell, but we're optimistic that we will be seeing another year of growth next year. And the next question, I think, from Mariane Goñi from CrediCorp Capital. I answer the first part. In terms of margins for 2026, there's 2 parts of the question. I think the margin should remain steady for the coming year, even though volumes are going to grow. And relating the SG&A, there's 2 things here. I mean, we're going to keep being very strong in terms of marketing expenses because there's increased competition, and we like to defend our solid market share. And like Ely mentioned before, I mean, in terms of administrative expenses this year because we signed the 3-year union contract, there's a higher impact of the bonus we give our workers on the signed agreement. In the coming years, there's still a little part of it, but the amount would be lower. And the last question from Integra. Looking ahead, do you plan to maintain this level of marketing and promotional spending for this year to the coming year? Like I said before, I mean, this is -- we'll see what is -- there's always a plan for us, but we always act depending on what the competition does. We'll have to see what is the impact of what we are doing. But yes, we are very happy with the levels of this year. We have to bear in mind that we have increased our marketing expenses and our net profit is up 15%. So that's the idea. I mean, it's not so much how much we spend in marketing, but it's really paying off our strategy. And as far as it pays off, we will probably keep along the same lines. We're going to give one more minute in case somebody else has any additional questions.

[Operator Instructions]

Thank you very much. We had some technical issues. On the first call we have done like a self-service, like a McDonald's Drive-Thru. And to close this, I would like to take a moment to thank you for your continued confidence and interest in our company. Peru faced many challenges and changes in the last decade. Progress is never a matter of chance, it's a matter of choice. It relies on the conviction of those who believe and continue to build even in difficult times, and we are among those. Cement embodies that conviction, turning belief into roads, homes and opportunities. Those of us who believe in the outstanding potential this country holds cannot step back, cannot be on standby. It is our responsibility to move forward, to invest, to innovate and to keep building its future. Thank you so much for your time today. And should you have any questions in the future, we will -- you know where to find us. Thank you, and have a nice day.

[Audio Gap] 2025 Earnings Conference Call. [Operator Instructions] 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 the host of today's call, Ms. Claudia Bustamante, Investor Relations Managing Director. Ms. Bustamante, you may now begin.

Thank you, Louis. Good morning, everyone. Joining me on the call today is Mr. Humberto Nadal, our Chief Executive Officer; and Ms. Ely Hayashi, our Chief Financial Officer. Mr. Nadal will begin our call with an overview of the quarter, focusing primarily on our strategic outlook for the short and medium term. Ms. Hayashi 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.

Thank you, Claudia. Welcome, everyone, to today's conference call, and thank you for joining us today. I would like to begin with a brief overview of this quarter's results. We saw an extremely solid recovery in sales volume, up 7.1% year-over-year as a result of stronger demand for cement as well as concrete, mostly for infrastructure-related projects. Consolidated EBITDA was $130.2 million this quarter, a 9% increase when compared to the same period of last year despite the increase in expenses related to our collective bargaining negotiations. The performance this quarter reflects our disciplined execution and alignment with our strategic objectives. Turning on to the progress of our strategy. I would like to focus on the steady growth in infrastructure projects this quarter and throughout the year. It is crucial to understand that despite more than 3 decades of sustained economic growth, Peru still faces a significant infrastructure and housing deficit. As a leading provider of building solutions, we are deeply aware of our role in addressing this challenge by delivering high-quality products and services, but more importantly, those that improve the quality of life and applicability of our clients, we are not only supporting infrastructure development, but we are mainly driving economic growth and social inclusion. Cement is more than just a building material. It's a synonym for progress. There is no sustainable economic or social development without infrastructure, and we all know that. People need proper [indiscernible] access to markets, education and health services. And all that begins with solid, resilient infrastructure. Obras por Impuestos or Works for Taxes program is an innovative Peruvian mechanism that enables private companies to finance public infrastructure projects in advance of the income tax payments, receiving in exchange tax certificates. This is an excellent mechanism to contribute to national development by executing those projects that have already been prioritized by local governments, but have not yet been carried out mainly due to limited execution capabilities. This has also proven to be one of the most effective platforms for showcasing the benefits of concrete and building solutions in our area of influence. The roads we built through Obras por Impuestos have already proven their resilience withstanding severe climate events such as El Nino and Cyclone Yaku. This underlines not only the technical advantage of concrete and proper building techniques, especially in areas prone to heavy rainfall, but also and mostly the long-term value of building resilient infrastructure. We are very proud to be among the top 5 contributors to this program. And this year alone, we are committed over $100 million through it. It's an extremely powerful example of how public-private collaboration can accelerate impact. While we demonstrate the quality, durability and efficiency of our concrete solutions, we also help improve connectivity and economic opportunities and support regional development. Of course, none, and I want to stress, none of these achievements would be possible without our people. For the seventh consecutive year, we're recognized as a top-ranked cement company in the MERCO Talent index and ranked 19th overall across all industries. Talent remains our greatest competitive advantage, our greatest challenge, and this recognition reflects our commitment to attracting and developing the best professionals in the market. We are confident that these positive results are just the beginning and that the momentum will continue to build in the coming quarters. We remain extremely optimistic about the future of our country and the future of our market. I will now turn the call over to Ely to go into more detailed financial analysis.

Thank you, Humberto. Good morning, everyone. This quarter's revenues increased 5.9% compared to the second quarter of 2024, mainly due to the increase in sales of bagged cement, concrete and pavement, reaching PEN 484.1 million. During this same period, gross profit increased 11.2% when compared to the same period of the previous year, mainly due to the increase in cost of raw materials on top of the above-mentioned higher revenue. Consolidated EBITDA was PEN 130.2 million this quarter, a 9% increase when compared to the same period of 2024, mainly due to the previously mentioned increased operating income. For the first 6 months of the year, revenues increased 5.3% when compared to the same period of 2024. Gross profit for the first 6 months of the year increased 8.2% when compared to the same period of the previous year, mainly due to the efficiencies derived from our annual maintenance plan as well as lower cost of raw materials. Likewise, EBITDA increased 5% and EBITDA margin remained in line for the first 6 months of the year when compared to the same period of 2024. Turning on to operating expenses. Administrative expenses for the second quarter of 2025 increased 13.8% when compared to the second quarter of 2024. Likewise, administrative expenses for the first 6 months of the year increased 17.9% compared to the same period of the previous year. This increase was mainly due to higher personnel expenses because of the union bonus. In an effort to optimize times and resources, collective bargaining with our labor unions is performed every 3 years. As an incentive to close this multiyear agreement, we offer a higher bonus for the first year, therefore, increasing expenses. Selling expenses increased 28% during the second quarter of 2025 and 23.2% during the first 6 months of the year when compared to the second quarter and first 6 months of 2024, respectively. This increase was mainly due to higher advertising and promotion expenses as well as the union bonus mentioned before. Moving on to different segments. Sales of cement increased 6.3% this quarter when compared to the same period of last year, mainly due to increased demand. Gross margin increased 3.2 percentage points during the same period when compared to the second quarter of 2024, mainly due to lower cost of cement [ tissue ] materials. For the first 6 months of the year, results were similar with sales increasing 5% and gross margin increasing 2.9 percentage points when compared to the same period last year. During this quarter, concrete, pavement and mortar sales increased 9.8% when compared to the same period in 2024, mainly due to increased sales of concrete and pavement for the Piura Airport project as well as to other infrastructure projects such as riverbank defenses, the Tarata Bridge and the Yanacocha project. However, gross margin decreased 3.2 percentage points in the second quarter of 2025 when compared to the same period of last year. This decrease was mainly due to the execution of the Piura Airport project. This is a difference in exchange gain rate between the rate projected in the contract versus the real rate exchange rate as well as increased costs related to the execution of the Piura Airport project as it extended over our planned execution period. We remain confident that developing Building Solutions is the right path for our company, even if it entails some short-term learning curve additional costs. Likewise, for the first 6 months of the year, concrete, pavement and mortar sales increased 16.1% and gross margin decreased 4.8 percentage points when compared to the same period last year. Regarding precast materials, sales increased 4.1% this quarter and 5.3% during the first 6 months of the year when compared to the second quarter and the first 6 months of 2024, respectively, mainly due to an increase in sales volumes to the public sector. However, gross margin this quarter and during the first 6 months of the year was lower by 1.5 and 1.6 percentage points, respectively, compared to the second quarter and first 6 months of 2024, respectively. Moving back to our consolidated results. Net profit increased 29.9% this quarter when compared to the same period of last year, mainly due to increased revenues and gross profit as well as a reduction in financing expenses as we decreased our debt levels and therefore, reduced our interest payments. During the first 6 months of the year, net income increased 16.5% when compared to the same period of last year. Finally, in terms of debt, our net debt-to-EBITDA ratio was 2.6x, a level we feel very comfortable with. To summarize, this quarter financial results show our ability to benefit from better market conditions while managing costs in order to achieve profitability. We are confident that we will continue delivering positive results during the rest of the year. Operator, can we now open the call for questions.

[Operator Instructions] Okay. So our first question is from Marcelo from Itau.

So guys, I have 2 questions here. It's related to the second half. So what are your expectations for volumes going forward? So should we expect the same trend as seen in the first half with this from mid- to high single-digit increase in volumes for Pacasmayo? And my second question is related to the CapEx. We have seen the company disbursing this around PEN 300 million per quarter as CapEx. So I just would like to see what are your -- what is your expectation for CapEx for the second half of this year? And also if you could break this down between maintenance CapEx and growth CapEx to help as well. So these are my 2 questions.

Thank you, Marcelo. In terms of volumes, we think the trend will remain single high digits, I think, is going to be a trend for the second part of the year. It's going to depend greatly on how infrastructure projects unveil. And we have things like the Tarata, La Leche, Motupe. Sometimes you're supposed to start in August and they start 2 months later. But in general, I think it's very positive. I think the trend should remain. And in terms of the CapEx, we've been stating that at this point, we are not involved in any substantial increase of capacity. Our sustaining CapEx is around PEN 100 million every year that is dedicated to our 3 plants and all our ready-mix plants. And we have small initiatives of CapEx, maybe $2 million, $3 million, but nothing really substantial during this year or the coming years. We are -- I mean, in terms of capacity at 70-something percent, so we are ready to engage in increased demand without increasing CapEx.

Okay. If I just follow up here a little bit. In terms of -- as you guys are expecting this high single digit for volumes increase for the second half, how -- what could we expect for margins here? Maybe could we expect some EBITDA margin improvement versus the first half? Or do you believe maybe margins will be flattish versus the first half? And if I may, just one final question related to dividends. As you guys mentioned that you don't have any expectations of a huge growth projects going forward, so what are the company's expectations for dividend distribution maybe for 2025?

So in terms of EBITDA margin, it will remain between 28% and 29%. And in terms of dividends, I mean, this is a decision that's really made at the Board and the shareholder level. But I mean we've been, over the last years, very consistent on the dividend level. And this year, we see no reason to change. And if anything, I said in the past, the company policy has been always that the excess cash belongs to the shareholders. I think there's a higher chance of that dividend going higher than going lower. But for sure, I think it will remain at the same level as previous years.

Our next question is from Omar Avellaneda, from Vinci Compass.

I just have one question. We just recently saw CEMEX used Chancay ports to import cement. Does this infrastructure change competitive dynamics in the Peruvian market?

Thank you for the question. I think Chancay is a great port. It's a great news for the country. You have to bear in mind that Chancay is very close to Lima. I mean if you talk about dynamics in our market, I mean, we are much more influenced by any changes that will happen in the Salaverry port and Paita port. That being said, yes, every new port may change a little bit dynamic, but really associated to the areas close to the port. I mean if you ask me, I mean, is it going to influence the South? No, it's going to influence the North the Chancay port, maybe a little bit, but it's fundamentally focused into Lima. Chancay is an alternative to the [ Callao ] port. And if I got precise that one of the reasons they use Chancay in the CEMEX case was because for technical reasons, [ Callao ] was not available at the given point of the ship coming into the country. I don't know in the future, they will repeat the same point.

[Operator Instructions] Okay. It looks like we have no further questions. I will now hand it back to the Cementos team for the concluding remarks.

Thank you. This quarter's performance reflects the strength of our long-term strategy and our ability to execute with purpose. Cement is at the core of Peru's development. It underpins better housing, safer roads and more connected inclusive communities. We firmly believe that poverty is one of the greatest threats to the environment. Without access to economic opportunity and basic infrastructure, it is difficult for communities to invest in sustainability. That is why our work goes beyond building materials and focuses on enabling a more equitable, resilient and sustainable future for all. We have started in a great manner the first semester of this year, and we are convinced the second semester will follow, and we will post hopefully record results for this year. Thanks to everybody for the continued interest in our company. And as always, should you have any further questions, we'll always be here. Thank you.

This concludes the call. Thank you, and have a nice day.