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2/7/2025
Good day, ladies and gentlemen. Welcome to Pacasmaio's fourth quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode, and please note that this call is being recorded. At the conclusion of our prepared remarks, we will conduct a question and answer session. I would now like to introduce your host for today's call, Mrs. Claudia Bustamante, investor relations manager. Mrs. Bustamante, you may begin.
Thank you, Luis. Good morning, everyone. Joining me on the call today is Mr. Humberto Nadal, our Chief Executive Officer, Mr. Manuel Ferreiros, our Chief Financial Officer, and Eli Hayashi, our Finance Managing Director. Mr. Nadal will begin our call with an overview of the quarter, focusing primarily on our strategic outlook for the short and medium term. Mr. Ferreiros 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 findings. With that, I'd now like to turn the call over to .
Thank you, Claudia. Welcome everyone to today's conference call and thank you for joining us today. Before beginning the analysis of this quarter's results, I would like to take a few minutes to talk about the recent announcement of Manuel Ferreira's retirement as CFO. As most of you already know, at the end of last year we announced that Manuel will be stepping down as CFO effective March 31st after an impeccable career that led him to be considered several times as one of the best CFOs in our industry in Latin America. Succession plan carefully drawn up more than three years ago. In April 2025, a new chapter will begin for the company under the leadership of Ms. Ellie Hayashi, who will maintain Manuel's legacy and learnings leading Pacasmayo to be better every day. Now moving on to our results, this quarter we saw a reversal of the negative trend in sales volume, resulting in an increase of 2.6% year-over-year. This increase was mainly due to increased sales to the public sector and concrete and pavement for the Pura Airport project. For all year 2024, revenues increased 1.4 percent, despite a slight decrease in sales volumes, mainly due to sales mix and our dynamic pricing strategy. Moreover, consolidated EBITDA reached a record 549.3 million with an EBITDA margin of 27.8 percent. These results, considering our challenging demand environment, are outstanding. and give us the confidence to believe that with a stronger demand scenario in 2025, we will be able to deliver even better results. I would now like to highlight the progress of some key elements of our strategy. As we are all aware, the world is transforming fast. The understanding and use of new technologies such as AI and machine learning and immense power of data are accelerating the pace of change. As a company, We are focusing on both developing and adapting digital tools and reinforcing the culture to adopt them. Throughout 2024, we made significant strides in digital transformation, aligning technology with our strategic objectives to enhance efficiency and innovation. We developed initiatives focused on the digitalization of operations, introduced a user-centered service model to improve customer interactions, and AI-driven solutions played a growing role in the company's evolution. Additionally, data management and automation played an increasingly crucial role in optimizing supply chain efficiency, modernizing logistic processes, streamlining operations, and reinforcing our commitment to continuous improvement. However, all of this technology adoption and data reliance brings its own challenges. Cybersecurity is paramount in the process of digital transformation. During 2024, we focused our efforts on strengthening the protection of operational technologies by increasing the maturity of the industrial network. We also consolidated an information security committee composed of representatives from various management positions to ensure a comprehensive approach to digital risk management. These efforts culminated in a major milestone as we became the first Peruvian cement company to obtain an ISO 27001 certification, the international standard for safeguarding the confidentiality and integrity of information. Another important pillar of our strategy is to continue to develop and strengthen our building solutions. During 2024, we have two significant projects towards this goal. First, we designed an innovative solution for riverbank protection that are traditionally done with steel and rocks. But if there are parts of the North where rocks are not readily available, we designed a new solution using mainly cement, local materials, and mortar that is both more cost-effective and more durable. Secondly, we executed the reconstruction of the two runways and the perimeter fence of the Pura Airport, not only as a concrete and pavement provider, but directly involved in the construction as part of the consortium. The way in which we approach this project is different from other airport improvement projects we have provided concrete for in the past. Since in this case, we actively participated in every step, beginning with prospection and ending with actual delivery of the finished infrastructure project. This involvement in every step of the process has brought invaluable insights and learning opportunities, albeit at some additional cost. We remain really confident that value-added building solutions are a rock forward for our company, and we will continue learning, adjusting, and improving in this journey. Finally, I would like to briefly mention some advancements and recommendations in terms of sustainability. We are extremely pleased to be the first Peruvian cement company to obtain an environmental product decoration from the Global EPD Program for three of our cement plants, representing an estimated 75% of our current portfolio. Verified by INR, this international certification provides full transparency on the environmental impact of our products throughout their life cycle, reaffirming once more our leadership in sustainability and our commitment to responsible construction. In addition, we are honored to have been included for the fifth consecutive year in the Sustainability Yearbook by S&P, and we have maintained our position as industry leaders in the Merkle Responsibility ESG ranking for the ninth year in a row. This evaluation, which considers environmental impact, social responsibility, ethics, and corporate governance, places us in the top 10 most responsible companies in the country. These recognitions reinforce our dedication to sustainability and drive us to continue embedding embedding it at the core of our business strategy. I will now turn the call over to Manuel to go into the financial analysis. Thank you, Humberto.
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