UNACEM Corp (UNACEMC1) Q1 2024 earnings summary

Executive summary

• Revenue rose 13.9% YoY to PEN 1,605.4m; EBITDA increased 7.2% to PEN 419m, but was flat excluding non-recurring income.

• Net profit fell 34.9% to PEN 111.1m from PEN 170.6m, amid higher financing costs and an adverse FX swing.

• Operating cash flow improved to PEN 99.8m from an outflow of PEN 20.3m YoY.

Financial highlights

• Gross margin fell to 25.4% from 28.6%; COGS rose 19.1%, reflecting lower economies of scale in Peru and Ecuador, acquired operations and higher raw-material costs.

• Administrative expenses rose 32.2% YoY, reflecting donations, acquired businesses, insurance and consulting; selling expenses increased 4.2%.

• Financial expenses increased 74.2% to PEN 94.2m from PEN 54.1m; net FX result shifted to an PEN 18.4m loss from a PEN 15.2m gain.

• EBITDA margin was 26.1%, down from 27.7%; LTM EBITDA was PEN 1,533m, down 1.1%, with LTM margin at 23.2% versus 25.6%.

• Net debt was PEN 5.1bn, flat vs. year-end; net debt/EBITDA was 3.4x against a 3.0x target.

Outlook and guidance

• FY 2024 consolidated EBITDA is expected to grow at a mid-single-digit rate despite slowdowns in some geographies.

• U.S. operations aim to increase cement volumes 20% YoY; Q2 trends were described as steady toward that goal.

• Peru’s 2024 GDP growth estimate was revised to 3.0% from 2.6%; recovery was expected to be driven by private and public consumption.

• CALCEM plans to start construction of a quicklime and calcium carbonate plant in 1H24, with operations planned for 1H26 and initial quicklime capacity of 600 tons per day.