UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15b-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of October 2024

 

Commission File Number 001-35401

 

CEMENTOS PACASMAYO S.A.A.

(Exact name of registrant as specified in its charter)

 

PACASMAYO CEMENT CORPORATION

(Translation of registrant’s name into English)

 

Republic of Peru

(Jurisdiction of incorporation or organization)

 

Calle La Colonia 150, Urbanización El Vivero

Surco, Lima

Peru

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F       Form 40-F

 

 

 

 

 

 

CEMENTOS PACASMAYO S.A.A.

 

The following exhibit is attached:

 

EXHIBIT NO.   DESCRIPTION
99.1     Unaudited interim condensed consolidated financial statements as of September 30, 2024 and for the three and nine-month periods then ended

 

1

 

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

CEMENTOS PACASMAYO S.A.A.

 

By: /s/ CARLOS JOSE MOLINELLI MATEO  
Name:  Carlos Jose Molinelli Mateo  
Title: Stock Market Representative  
     
Date: October 29, 2024  

 

 

2

 

 

Exhibit 99.1

 

 

 

Cementos Pacasmayo S.A.A. and Subsidiaries

 

Unaudited interim condensed consolidated financial statements
as of September 30, 2024 and for the three and nine-month periods then ended

 

 

 

 

 

 

 

Cementos Pacasmayo S.A.A. and Subsidiaries

 

Unaudited interim condensed consolidated financial statements as of September 30, 2024 and for the three and nine-month periods then ended

 

Content

 

Report on review of interim condensed consolidated unaudited financial statements   F-2
Interim condensed consolidated unaudited financial statements    
Interim condensed consolidated unaudited statements of financial position   F-3
Interim condensed consolidated unaudited statements of profit or loss   F-4
Interim condensed consolidated unaudited statements of other comprehensive income   F-5
Interim condensed consolidated unaudited statements of changes in equity   F-6
Interim condensed consolidated unaudited statements of cash flows   F-7
Notes to the interim condensed consolidated unaudited financial statements   F-9

 

F-1

 

 

Report on review of interim condensed consolidated unaudited financial statements

 

To the Board of Directors and Shareholders of Cementos Pacasmayo S.A.A.

 

Introduction

 

We have reviewed the accompanying interim condensed consolidated unaudited statement of financial position of Cementos Pacasmayo S.A.A. (a Peruvian company) and its Subsidiaries (together the “Group”) as of September 30, 2024, and the related interim condensed consolidated unaudited statements of profit or loss, other comprehensive income, changes in equity and cash flows for the three and nine-month periods then ended, and explanatory notes. Management is responsible for the preparation and presentation of these interim condensed consolidated unaudited financial statements in accordance with IAS 34 Interim Financial Reporting (IAS 34). Our responsibility is to express a conclusion on these interim condensed consolidated unaudited financial statements based on our review.

 

Scope of review

 

We conducted our review in accordance with International Auditing Standard on Review Engagements (ISRE) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of the persons responsible for financial and accounting matters and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated unaudited financial statements are not prepared, in all material respects, in accordance with IAS 34.

 

Lima, Peru

October 28, 2024

 

Countersigned by:

 

/s/ Manuel Arribas Zevallos  
Manuel Arribas Zevallos  
C.P.C. Register No. 45987  

 

F-2

 

 

Cementos Pacasmayo S.A.A. and Subsidiaries

 

Interim condensed consolidated unaudited statements of financial position

As of September 30, 2024 (unaudited) and December 31, 2023 (audited)

 

   Note  As of
September 30, 2024
   As of
December,
2023
 
      S/(000)   S/(000) 
Assets           
Current assets           
Cash and cash equivalents  3   139,536    90,193 
Time deposits with maturities greater than ninety days  3   32,782    - 
Trade and other receivables  4   129,733    99,688 
Income tax prepayments      5,766    4,485 
Inventories  5   786,941    791,074 
Prepayments      26,266    6,809 
Total current asset      1,121,024    992,249 
Non-current assets             
Trade and other receivables  4   42,930    43,397 
Financial instruments designated at fair value through other comprehensive income  14   332    249 
Property, plant and equipment  6   2,034,679    2,099,351 
Intangible assets      62,798    62,920 
Goodwill      4,459    4,459 
Deferred income tax assets      13,662    11,428 
Right of use asset      9,443    7,609 
Other assets      53    73 
Total non-current assets      2,168,356    2,229,486 
Total assets      3,289,380    3,221,735 
Liability and equity             
Current liabilities             
Trade and other payables  7   262,054    231,511 
Financial obligations  8 and 14   420,346    383,146 
Lease liabilities      3,458    3,999 
Income tax payable      6,655    14,222 
Provisions  9   24,366    56,510 
Total current liabilities      716,879    689,388 
              
Non-current liabilities             
Financial obligations  8 and 14   1,073,601    1,189,880 
Lease liabilities      6,324    4,130 
Non-current provisions  9   31,514    27,453 
Deferred income tax liabilities      122,455    120,876 
Total non-current liabilities      1,233,894    1,342,339 
Total liability      1,950,773    2,031,727 
Equity             
Capital stock      423,868    423,868 
Investment shares      40,279    40,279 
Investment shares held in treasury      (121,258)   (121,258)
Additional paid-in capital      432,779    432,779 
Legal reserve      168,636    168,636 
Other accumulated comprehensive loss      (16,486)   (16,290)
Retained earnings      410,789    261,994 
Total equity      1,338,607    1,190,008 
Total liability and equity      3,289,380    3,221,735 

 

The accompanying notes are an integral part of the interim condensed consolidated unaudited financial statements.

 

F-3

 

 

Cementos Pacasmayo S.A.A. and Subsidiaries

 

Interim condensed consolidated unaudited statements of profit or loss

For the three and nine-month periods ended September 30, 2024 and 2023 (unaudited)

 

      For the three-month
period ended
September 30,
   For the nine-month
period ended
September 30,
 
   Note  2024   2023   2024   2023 
      S/(000)   S/(000)   S/(000)   S/(000) 
                    
Sales of goods  11   517,754    516,664    1,451,399    1,438,698 
Cost of sales      (321,998)   (342,025)   (920,223)   (950,886)
Gross profit      195,756    174,639    531,176    487,812 
                        
Operating expense                       
Administrative expenses      (63,634)   (55,099)   (182,672)   (171,155)
Selling and distribution expenses      (19,587)   (17,689)   (56,236)   (50,897)
Other operating expense, net      3,938    (10,290)   (426)   (8,814)
Total operating expenses, net      (79,283)   (83,078)   (239,334)   (230,866)
Operating profit      116,473    91,561    291,842    256,946 
                        
                        
Other income (expenses)                       
Finance income      1,650    2,063    4,225    4,273 
Finance costs      (25,015)   (26,907)   (75,890)   (76,784)
(Loss) gain from exchange difference, net      138    376    (1,247)   5,717 
Total other expenses, net      (23,227)   (24,468)   (72,912)   (66,794)
Profit before income tax      93,246    67,093    218,930    190,152 
                        
Income tax expense  10   (30,707)   (20,978)   (70,135)   (57,111)
                        
Profit for the period      62,539    46,115    148,795    133,041 
                        
Earnings per share                       
Basic profit for the period attributable to equity holders of common shares and investment shares of the parent (S/ per share)  13   0.15    0.11    0.35    0.31 

 

The accompanying notes are an integral part of the interim condensed consolidated unaudited financial statements.

 

F-4

 

 

Cementos Pacasmayo S.A.A. and Subsidiaries

 

Interim condensed consolidated unaudited statements of other comprehensive income

For the three and nine-month periods ended September 30, 2024 and 2023 (unaudited)

 

      For the three-month
period ended
September 30,
   For the nine-month
period ended
September 30,
 
   Note  2024   2023   2024   2023 
      S/(000)   S/(000)   S/(000)   S/(000) 
                    
Net Profit      62,539    46,115    148,795    133,041 
                        
Other comprehensive income                       
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:                       
Update in the fair value of financial instruments at fair value with changes in others comprehensive income      (183)   -    (278)   - 
Deferred income tax  10   54    -    82    - 
Other comprehensive income to be reclassified to profit or loss in subsequent periods:                       
Net gain on cash flow hedging instruments  14(a)   -    -    -    2,154 
Deferred income tax  10   -    -    -    (634)
Other comprehensive income for the period, net of income tax      (129)   -    (196)   1,520 
                        
Total comprehensive income for the period, net of income tax      62,410    46,115    148,599    134,561 

 

The accompanying notes are an integral part of the interim condensed consolidated unaudited financial statements.

 

F-5

 

 

Cementos Pacasmayo S.A.A. and Subsidiaries

 

Interim condensed consolidated unaudited statements of changes in equity

For the nine-month period ended September 30, 2024 and 2023 (unaudited)

 

   Capital
stock
   Investment
shares
   Investments shares held in treasury   Additional
paid-in
capital
   Legal
reserve
   Unrealized
loss on
financial
instruments designated at fair value
   Unrealized gain (loss) on
cash flow hedge
   Retained
earnings
   Total
equity
 
   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000) 
                                     
Balance as of January 1, 2023   423,868    40,279    (121,258)  432,779    168,636    (16,267)   (1,520)   268,618    1,195,135 
Net Profit   -    -    -    -    -    -    -    133,041    133,041 
Other comprehensive income for the period   -    -    -    -    -    -    1,520    -    1,520 
Others   -    -    -    -    -    (5)   -    -    (5)
Total comprehensive income   -    -    -    -    -    (5)   1,520    133,041    134,556 
                                              
Balance as of September 30, 2023   423,868    40,279    (121,258)   432,779    168,636    (16,272)   -    401,659    1,329,691 
                                              
Balance as of January 1, 2024   423,868    40,279    (121,258)   432,779    168,636    (16,290)   -    261,994    1,190,008 
Net Profit   -    -    -    -    -    -    -    148,795    148,795 
Other comprehensive income for the period   -    -    -    -    -    (196)   -    -    (196)
Total comprehensive income   -    -    -    -    -    (196)   -    148,795    148,599 
                                              
Balance as of September 30, 2024   423,868    40,279    (121,258)   432,779    168,636    (16,486)   -    410,789    1,338,607 

 

The accompanying notes are an integral part of the interim condensed consolidated unaudited financial statements.

 

F-6

 

 

Cementos Pacasmayo S.A.A. and Subsidiaries

 

Interim condensed consolidated unaudited statements of cash flows

For the three and nine-month period ended September 30, 2024 and September 30, 2023 (unaudited)

 

      For the three-month
period ended
September 30
   For the nine-month
period ended
September 30
 
   Note  2024   2023   2024   2023 
      S/(000)   S/(000)   S/(000)   S/(000) 
                    
Operating activities                   
Profit before income tax      93,246    67,093    218,930    190,152 
Non-cash adjustments to reconcile profit before income tax to net cash flows :                       
Depreciation and amortization      38,103    37,377    114,894    105,283 
Finance costs      25,015    26,907    75,890    76,784 
Long-term incentive plan  12   1,791    1,854    5,373    5,775 
Estimate expected credit loss  4   432    231    2,044    1,746 
Unrealized exchange difference related to monetary transactions      168    (725)   499    (545)
Net gain on disposal of property, plant and equipment      (3,465)   (308)   (3,558)   (695)
Finance income      (1,650)   (2,063)   (4,225)   (4,254)
Other operating, net      (1,023)   1,100    2,165    2,921 
                        
Working capital adjustments                       
(Increase) decrease in trade and other receivables      (692)   (5,401)   (31,500)   1,866 
Decrease (increase) in prepayments      10,524    4,783    (18,734)   (580)
Decrease (increase) in inventories      (16,892)   111,814    1,867    65,669 
Increase in trade and other payables      47,003    59,916    7,359    4,322 
                        
       192,560    302,578    371,004    448,444 
                        
Interests received      1,692    2,133    4,187    4,194 
Interests paid      (29,666)   (31,642)   (81,862)   (77,768)
Income tax paid      (27,338)   (25,212)   (80,489)   (78,938)
Net cash flows provided (used in) by  operating activities      137,248    247,857    212,840    295,932 

 

The accompanying notes are an integral part of the interim condensed consolidated unaudited financial statements.

 

F-7

 

 

Cementos Pacasmayo S.A.A. and Subsidiaries

 

Interim condensed consolidated statements of cash flows (continued)

 

      For the three-month
period ended
September 30,
   For the nine-month
period ended
September 30,
 
   Note  2024   2023   2024   2023 
      S/(000)   S/(000)   S/(000)   S/(000) 
                    
Investing activities                   
Purchase of property, plant and equipment      (11,356)   (94,885)   (39,821)   (243,598)
Opening of term deposits with original maturity greater than 90 days      (32,782)   (8,500)   (32,782)   (18,500)
Purchase of intangible assets      (4,382)   (3,577)   (10,756)   (10,940)
Purchase of investments available for sale      -    -    (361)   - 
Loans to third parties      -    (702)   (97)   (1,202)
Proceeds from sale of property, plant and equipment      4,221    536    4,400    1,221 
Collection of loan to third parties      -    -    115    150 
Redemption of term deposits with original maturity greater than 90 days      -    10,000    -    10,000 
Net cash flows used in investing activities      (44,299)   (97,128)   (79,302)   (262,869)
Financing activities                       
Loan paid  8   (39,091)   (39,091)   (231,273)   (546,429)
Payment of lease liabilities      (1,328)   (935)   (3,457)   (2,322)
Dividends paid      (141)   (127)   (426)   (583)
Loan received  8   -    -    151,200    525,000 
Dividends returned      -    163    297    462 
Bank overdraft paid      -    -    -    (85,333)
Payment of hedge finance cost      -    -    -    (7,708)
Income from settlement of derivative financial instrument      -    -    -    93,323 
Bank overdraft      -    -    -    85,333 
Net cash flows (used in) provided by financing activities      (40,560)   (39,990)   (83,659)   61,743 
Net increase (decrease) in cash and cash equivalents      52,389    110,739    49,879    94,806 
Net foreign exchange difference      (166)   725    (536)   545 
Cash and cash equivalents at the beginning of the period      87,313    65,660    90,193    81,773 
Cash and cash equivalents at the end of the period  3   139,536    177,124    139,536    177,124 
Transactions with no effect in cash flows:                       
Unrealized exchange difference related to monetary transactions      168    (725)   499    (545)
Outstanding accounts payable related to acquisition of property, plant and equipment as of September 30  6   270    1,104    8,302    12,140 

 

The accompanying notes are an integral part of the interim condensed consolidated unaudited financial statements.

 

F-8

 

 

Cementos Pacasmayo S.A.A. and Subsidiaries

 

Notes to interim condensed consolidated unaudited financial statements

As of September 30, 2024 and 2023, and December 31, 2023

 

1.Economic activity

 

(a)Economic activity -

 

Cementos Pacasmayo S.A.A. (hereinafter “the Company”) was incorporated in 1957 and, in accordance with the Law of Peruvian Companies, is an open stock corporation, its shares are listed in the Lima and New York Stock Exchange. The Company is a subsidiary of Inversiones ASPI S.A., which holds 50.01 percent of the Company’s common shares as of September 30, 2024, December 31, 2023 and September 30, 2023.

 

The address registered by the Company is Calle La Colonia No.150, Urbanización El Vivero, Santiago de Surco, Lima, Peru.

 

The main activity of the Company is the production and commercialization of cement, precast, concrete and quicklime in the northern region of Peru.

 

The interim condensed consolidated unaudited financial statements of the Company and its subsidiaries (hereinafter the “Group”) as of September 30, 2024 and for the nine-month period then ended, were approved for issuance by the Company’s Management on October 28, 2024. The consolidated audited financial statements as of December 31, 2023 have been approved by the General Meeting of Shareholders, on March 21, 2024.

 

2.Basis of preparation and changes to the Group’s accounting policies

 

2.1Basis of preparation -

 

The interim condensed consolidated unaudited financial statements of the Group have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) and have been prepared on a historical cost basis, except for financial instruments designated at fair value through other comprehensive income (OCI) and derivatives financial instruments that have been measured at fair value. The interim condensed consolidated unaudited financial statements are presented in soles and all values are rounded to the nearest thousand (S/000), except when otherwise indicated. The Group has prepared the financial statements on the basis that it will continue to operate as a going concern. The Management consider that there are no material uncertainties that may cast doubt significant doubt over this assumption. They have formed a judgement that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, and not less than 12 months from the end of the reporting period.

 

The interim condensed consolidated unaudited financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with Group’s annual consolidated financial statements as of December 31, 2023.

 

F-9

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

New standards, interpretations and amendments

 

The accounting policies adopted in the preparation of the interim condensed consolidated unaudited financial statements are consistent with the policies considered in the preparation of the consolidated financial statements of the Group at December 31, 2023, except for the adoption of new standards effective as of 1 January 2024. The standards and interpretations relevant to the Group, that are effective since January 1, 2024 are disclosed below.

 

Supplier Finance Arrangements- Amendments to IAS 7 and IFRS 7

 

In May 2023, the IASB issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Statement Instruments: Disclosures to clarify the characteristics of supplier financing arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to help users of financial statements understand the effects of financing arrangements on an entity’s liabilities, cash flows, and liquidity risk exposure.

 

The transition rules clarify that an entity is not required to provide disclosures in any interim periods in the year of initial application of the amendments.

 

The amendments had no impact on the Group’s interim condensed consolidated unaudited financial statements.

 

Lease Liability in a Sale and Leaseback - Amendments to IFRS 16

 

In September 2022, the IASB issued amendments to IFRS 16 to specify the requirements that the seller-lessee must meet when measuring the lease liability arising in a sale and leaseback transaction, to ensure that the seller-lessee does not recognize any amount of profit or loss that relates to the right of use that it retains.

 

The amendments had no impact on the Group’s interim condensed consolidated unaudited financial statements.

 

Classification of Liabilities as Current or Non-current – Amendments to IAS 1

 

In January 2020 and October 2022, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

 

What is meant by the right to postpone liquidation?

 

That there must be a right of deferral at the end of the reporting period

 

That classification is not affected by the probability that an entity will exercise its right to defer.

 

That only if a derivative embedded in a convertible liability is itself an equity instrument, the terms of a liability do not affect its classification.

 

In addition, a requirement has been introduced whereby an entity must disclose when a liability arising from a loan agreement is classified as non-current and the entity’s right to defer settlement is contingent on meeting future obligations within twelve months.

 

The amendments had no impact on the Group’s interim condensed consolidated financial statements.

 

F-10

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

2.2

Basis of consolidation -

 

The interim condensed consolidated unaudited financial statements comprise the financial statements of the Company and its subsidiaries as of September 30, 2024 (unaudited) and December 31, 2023, and for the three and nine-month period ended September 30, 2024 and 2023 (unaudited).

 

For the three and nine-month period ended September 30,2024 and 2023, there was no changes in the participation of the common shares that the Company’s had in its subsidiaries; the main activities and information about subsidiaries are revealed on the consolidated financial statements as of December 31, 2023.

 

2.3

Seasonality of operations -

 

Seasonality is not relevant to the Group’s activities.

 

3.Cash and cash equivalents

 

(a)This caption consists of the following:

 

   As of
September 30,
2024
   As of
December 31,
2023
 
   S/(000)   S/(000) 
         
Cash on hand   177    182 
Cash at banks (b)   41,659    46,611 
Short-term deposits (c)   97,700    43,400 
Cash balance included in cash flow   139,536    90,193 
Long-term deposits (d)   32,782    - 
    172,318    90,193 

 

(b)Cash at banks is denominated in local and foreign currencies, is deposited in domestic and foreign banks and is freely available. These accounts generate market interest based on daily rates for deposits in banks.

 

(c)The short-term deposits held in domestic banks were freely available and earned interest at the respective short-term market rates and original maturity less than three months.

 

(d)Long-term deposits are deposited in local banks, are freely available and generate interest according to the respective term deposit rates and have an original maturity greater than three months.

 

F-11

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

4.Trade and other receivables

 

As of September 30, 2024 and December 31, 2023 this caption mainly includes trade receivables, value-added tax credit (VAT), interest receivables and accounts receivables from related parties. At those dates, approximately 56% and 60% of trade receivables were guaranteed by bank guarantees and mortgages amounting to S/50,031,000 and S/50,120,000, respectively. The increase in trade receivables as of September 30, 2024 compared to December 31, 2023 is mainly due to Consortium activities (see note 15) for S/-27,751,000.

 

On March 22, 2021, the Company received Tax Court Resolution N° 00905-4-21 that declares the calculation of Mining Royalty should be based on gross sale of the final product (cement) for the years 2008 and 2009. This is an opposite position to what is established by the Constitutional Court in the STC Exp. N° 1043-2013-PA/TC that declares founded the writ of protection presented by the Company and its right to calculate the Mining Royalty exclusively based on the value of the mining component, without considering in any way the value of the final products derived from industrial and manufacturing processes.

 

The Company has made, under protest, partial payments of the debts arbitrarily placed in collection. These payments as of September 30, 2024 and December 31, 2023 amount to approximately S/29,559,000, and are presented in the caption “Trade and other receivables” as non-current assets. To date, the Company has already initiated the corresponding legal actions to recover said payments and in the opinion of Management and its external legal advisors, it has a high probability of obtaining a favorable result.

 

For the nine-month period ended September 30, 2024 and 2023, the Group recorded S/2,044,000 and S/1,746,000, respectively, related to the provision for expected credit losses for trade receivables, which are presented in the caption “Selling and distribution expenses” of the interim condensed consolidated unaudited statement profit or loss and; corresponds to the best estimate of Management considering the current situation. The Group’s Management will continue evaluating the conditions of its client portfolio and, if deemed necessary, the corresponding provisions will be made.

 

The movement of the allowance for expected credit losses on trade and others receivable for the nine-month period ended as of September 30, 2024 and 2023 is as follows:

 

   2024   2023 
   S/(000)   S/(000) 
         
Opening balance   18,048    16,467 
Additions   2,044    1,746 
Recoveries and others   (127)   (69)
           
Ending balance   19,965    18,144 

 

5.Inventories

 

As of September 30, 2024 and December 31, 2023 includes goods and finished products, work in progress, raw materials and other supplies to be used in the production process.

 

F-12

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

6.Property, plant and equipment, net

 

During the three-and nine-month periods ended September 30, 2024 the Group’s additions amounted approximately to S/ 11,086,000 and S/ 38,744,000, respectively (S/95,989,000 and S/241,178,000 during the three- and nine-month periods ended September 30, 2023, respectively).

 

Assets with a net book value of S/757,000 were sold during the nine-month period ended September 30, 2024 (S/423,000 for the nine-month period ended September 30, 2023), resulting in a net gain on disposal of S/3,557,000 (S/695,000 for the nine-month period ended September 30, 2023).

 

As of September 30, 2024, the Group maintains accounts payable related to the acquisition of property, plant and equipment for S/ 8,302,000 (S/9,379,000 as of December 31, 2023).

 

7.Trade and other payables

 

As of September 30, 2024, and December 31, 2023, this caption includes trade payables, account payables to related parties, interest payable, dividends payable among other minor payables.

 

As of September 30, 2024, dividends payable amounted to S/10,193,000 (S/10,322,000 as of December 31, 2023).

 

8.Financial Obligations

 

(a)This caption is made up as follows:

 

   Currency  Nominal interest rate   Maturity  2024   2023 
             S/(000)   S/(000) 
                   
Short -term promissory notes                  
Banco de Crédito del Perú  S/   9.44%  January 22, 2024   -    38,000 
BBVA Perú  S/   9.78%  January 19, 2024   -    38,000 
BBVA Perú  S/   8.83%  March 15, 2024   -    38,000 
BBVA Perú  S/   6.98%  December 12, 2024   76,000    76,000 
BBVA Perú  S/   7.32%  November 22, 2024   38,000    38,000 
Banco de Crédito del Perú  S/   6.51%  January 13, 2025   38,000    - 
Banco de Crédito del Perú  S/   6.51%  January 16, 2025   38,000    - 
Banco de Crédito del Perú  S/   6.35%  February 21, 2025   38,000    - 
Scotiabank  S/   5.94%  March 10, 2025   37,200    - 
               265,200    228,000 
Senior Notes (b)                     
Principal, net of issuance costs  S/   6.69%  February 1, 2029   259,271    259,686 
Principal, net of issuance costs  S/   6.84%  February 1, 2034   310,004    309,506 
               569,275    569,192 
Short and long-term Corporate Loan under “Club deal” (d)                     
Banco de Crédito del Perú  S/   5.82%  December 1,2028   329,736    387,917 
Scotiabank  S/   5.82%  December 1,2028   329,736    387,917 
               659,472    775,834 
               1,493,947    1,573,026 
Maturity                     
Current              420,346    383,146 
Non-current              1,073,601    1,189,880 
               1,493,947    1,573,026 

 

F-13

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

(b)Corporate bonds

 

On January 31, 2019, corporate bonds were issued in soles for S/260,000,000 at a rate of 6.688 percent per year and maturity of 10 years and; 15-year bonds for S/310,000,000 at a rate of 6.844 percent per year.

 

For the nine-month period ended September 30, 2024 and 2023, the corporate bonds generated interests that have been recognized in the interim condensed consolidated unaudited financial statement of profit or loss for S/28,952,000 and S/29,039,000, respectively.

 

(c)Financial covenants –

 

The contracts for corporate bonds issued in soles have the following covenants to limit incurring indebtedness for the Company and its guarantor subsidiaries, which are measured prior to the following transactions: issuance of debt or equity instruments, merger with another company or disposal or rental of significant assets. The covenants are the following:

 

-The debt service coverage ratio (includes amortization plus interest) must be at least 2.5 to 1.

 

-The financial debt to Ebitda ratio may not be greater than 3.5 to 1.

 

(d)Medium-term Corporate Loan under “Club deal” modality -

 

On August 6, 2021, the Company established the conditions of a medium-term corporate loan under “Club Deal” modality with Banco de Crédito del Perú S.A. and Scotiabank Perú S.A.A. The loan amounts to S/ 860,000,000 that allowed the payment of all the financial obligations that the Company maintained with maturity until February 2023. The loan conditions include a grace/availability period of 18 months from August 6 and a payment term of 7 years from the last disbursement, which was in February 2023. Since that date, the loan will be paid in 22 equal quarterly installments and has an annual interest rate of 5.82 percent.

 

As part of the loan conditions, the Company would assume the following obligations:

 

I.Comply with the following financial safeguards:

 

(a).Debt Ratio (Financial Debt / EBITDA) <= 3.50x

 

(b).Debt Service Coverage Ratio (FCSD / SD) > = 1.15x

 

(c).Debt Service Coverage Ratio (EBITDA / SD) >= 1.50x

 

These financial safeguards will be calculated and verified at the end of each calendar quarter, considering the information of consolidated financial statements of the Company for the last 12 months, prepared in accordance with International Financial Reporting Standards - IFRS.

 

As of September 30, 2024 and 31 December, 2023, the Company complies with the ratios contained in the conditions of the Club Deal and corporate bonds and has certain do’s and don’ts obligations that it has been complying with to date.

 

F-14

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

9.Provisions

 

As of September 30, 2024 and December 31, 2023, the item mainly includes employee profit sharing, provision for litigation, provision for long-term incentives and provision for mine closure.

 

10.Income tax

 

The Group calculates income tax expense of the period using the tax rate that would be applicable to the expected total annual earnings.

 

The major components of the income tax expense in the interim condensed consolidated unaudited statement of profit or loss and interim condensed consolidated unaudited statement of other comprehensive income are:

 

   For the three-month
period ended
September 30,
   For the nine-month
period ended
September 30,
 
   2024   2023   2024   2023 
   S/(000)   S/(000)   S/(000)   S/(000) 
                 
Current income tax   (33,645)   (22,878)   (70,708)   (71,513)
Deferred income tax   2,938    1,900    573    14,402 
Income tax expense   (30,707)   (20,978)   (70,135)   (57,111)
                     
Deferred Income tax recognized in other comprehensive income   54    -    82    (634)
Total income tax   (30,653)   (20,978)   (70,053)   (57,745)

 

The movement of the Group’s deferred income tax assets and liabilities is shown below:

 

   For the three-month
period ended
September 30,
   For the nine-month
period ended
September 30,
 
   2024   2023   2024   2023 
   S/(000)   S/(000)   S/(000)   S/(000) 
                 
Increase of deferred income tax asset   799    347    2,234    2,215 
(Increase) decrease of deferred income tax liability   2,193    1,553    (1,579)   11,553 
                     
Total variation of deferred income tax   2,992    1,900    655    13,768 
                     
Deferred income tax benefit recognized in interim condensed consolidated unaudited statements of profit or loss   2,938    1,900    573    14,402 
Deferred income tax recognized in other comprehensive income   54    -    82    (634)
                     
Total variation of deferred income tax   2,992    1,900    655    13,768 

 

F-15

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

Following is the composition of deferred tax related to items recognized in interim condensed consolidated unaudited statements of other comprehensive income:

 

   For the three-month
period ended
September 30,
   For the nine-month
period ended
September 30,
 
   2024   2023   2024   2023 
   S/(000)   S/(000)   S/(000)   S/(000) 
                 
Unrealized gain (loss) on derivative financial instruments   54       -   82   (634)
                     
Total deferred income tax recognized in OCI   54              -    82    (634)

 

11.Sales of goods

 

This caption is made up as follows:

 

  

For the three-month period ended September 30:

 
   Cement, concrete, mortar and precast   Construction Supplies   Other   Total 
   S/(000)   S/(000)   S/(000)   S/(000) 
                 
Revenue from external customers of 2024   499,196    16,122    2,436    517,754 
                     
Revenue from external customers of 2023   497,008    16,377    3,279    516,664 

 

   For the nine-month period ended September 30: 
   Cement,
concrete,
mortar and
precast
   Construction
Supplies
   Other   Total 
   S/(000)   S/(000)   S/(000)   S/(000) 
                     
Revenue from external customers of 2024   1,395,407    44,099    11,893    1,451,399 
                     
Revenue from external customers of 2023   1,364,763    54,326    19,609    1,438,698 

 

F-16

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

12.Related party transactions

 

During the three and nine-months periods ended September 30, 2024 and 2023, the Group carried out the following main transactions with Inversiones ASPI S.A. and its related parties:

 

   For the three-month
period ended
September 30,
   For the nine-month
period ended
September 30,
 
   2024   2023   2024   2023 
   S/(000)   S/(000)   S/(000)   S/(000) 
                 
Income                
Parent                
Inversiones ASPI S.A.                
Fees for management and administrative services   22    22    66    66 
Fees from office lease   4    4    12    12 
                     
Other related parties                    
Compañía Minera Ares S.A.C. (Ares)                    
Fees from land rental services   309    284    915    860 
Fees from leasing of parking   94    64    263    194 
                     
Fosfatos del Pacífico S.A. (Fospac)                    
Fees for management and administrative services   36    36    108    107 
Fees from office lease   4    4    12    12 
                     
Fossal S.A.A.  (Fossal)                    
Fees for management and administrative services   11    11    33    33 
Fees from office lease   4    4    12    12 
                     
Asociación Sumac Tarpuy                    
Fees from office lease   4    4    12    12 
                     
Expenses                    
Other related parties                    
Security services provided by Compañía Minera Ares S.A.C.   (540)   (660)   (1,620)   (1,980)

 

F-17

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

As a result of these transactions, the Group had the following rights and obligations as of September 30, 2024, and December 31, 2023:

 

    September 30, 2024     December 31, 2023  
    Accounts
receivable
    Accounts
payable
    Accounts
 receivable
    Accounts
payable
 
    S/(000)     S/(000)     S/(000)     S/(000)  
Parent                        
Inversiones ASPI S.A.     83       -       89       -  
      83       -       89       -  
                                 
Other related parties                                
Fosfatos del Pacífico S.A.     1,371       476       1,413       305  
Compañía Minera Ares S.A.C.     185       1       315       211  
Fossal S.A.A.     98       -       52       -  
Other     114       -       104       -  
                                 
      1,768       477       1,884       516  
      1,851       477       1,973       516  

 

Terms and conditions of transactions with related parties -

 

Sales and purchases with related parties are made under market conditions equivalent to those applied to transactions between independent parties. The balances receivable and payable are free of guarantees given and received, free of interest and are paid in cash. As of September 30, 2024 and December 31, 2023, the Group has not recorded any provision for expected credit losses in relation to balances owed by related parties. This evaluation is carried out annually by examining the commercial position of the related party and the market in which it operates.

 

Compensation of key management personnel of the Group –

 

The compensation paid to key management personnel includes expenses for profit-sharing, compensation and other concepts for members of the Board of Directors and the key management. The total short-term compensation expense amounted to S/7,846,000 and S/19,820,000 during the three and nine-month periods ended September 30, 2024, respectively (S/8,377,000 and S/20,486,000, during the three and nine-month periods ended September 30, 2023), and the total long-term compensations expense amounted to S/1,791,000 and S/5,373,000 during the three and nine-month periods ended September 30, 2024, respectively (S/1,854,000 and S/5,775,000 during the three and nine-month period ended September 30, 2023, respectively). The Group does not compensate Management with post-employment or contract termination benefits or share-based payments.

 

F-18

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

13.Earnings per share (EPS)

 

Basic earnings per share amounts are calculated by dividing net profit for the nine-month period ended September 30, 2024 and 2023 by the weighted average number of common and investment shares outstanding during those periods.

 

The Group has no dilutive potential common shares as of September 30, 2024 and 2023.

 

Calculation of the weighted average number of shares and the basic earnings per share is presented below:

 

   For the three-month period
ended September 30,
   For the nine-month period
ended September 30,
 
   2024   2023   2024   2023 
   S/(000)   S/(000)   S/(000)   S/(000) 
                 
Numerator                
Net profit attributable to ordinary equity holders of the Parent   62,539    46,115    148,795    133,041 
Denominator                    
Weighted average number of common and investment shares (thousands)   428,107    428,107    428,107    428,107 
Basic profit for common and investment shares   0.15    0.11    0.35    0.31 

 

There have been no other transactions involving common and investment shares between the reporting date and the date of completion of these interim condensed consolidated unaudited financial statements.

 

14.Financial assets and liabilities

 

Financial assets -

 

Except for the financial instruments designated at fair value through OCI and derivative financial instruments, all financial assets which included trade and other receivables are classified in the category of loans and receivables, which are non-derivative financial assets carried at amortized cost, held to maturity and generate a fixed or variable interest income for the Group. The carrying value may be affected by changes in the credit risk of the counterparties.

 

F-19

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

Financial liabilities -

 

Except for derivative financial instruments (see (a) below), all financial liabilities of the Group including trade and other payables and financial obligations are classified as loans and borrowings and are carried at amortized cost.

 

(a)Financial asset –

 

Derivatives assets of hedging –

 

Foreign currency risk –

 

In February 2023, as a result of the settlement of the hedging derivative financial instruments amounting to US$131,612,000 used for cash flow hedging, the Group has recorded an unrealized gain in the unaudited interim condensed consolidated statement of other comprehensive income of S/2,154,000 for the nine-month period ending September 30, 2023.

 

As of September 30, 2024, the Group does not have financial instruments to cover exchange rate risk given that it does not maintain significant assets or liabilities in foreign currency.

 

(b)Fair values and fair value accounting hierarchy –

 

Set out below is a comparison of the carrying amounts and fair values of financial instruments of the Group, as well as the fair value accounting hierarchy:

 

   Carrying amount   Fair value   Fair value hierarchy
   2024   2023   2024   2023   2024/2023
   S/(000)   S/(000)   S/(000)   S/(000)    
                    
Financial assets                   
Cash and cash equivalents   139,536    90,193    139,536    90,193   Level 1
Time deposits with maturities greater than ninety days   32,782    -    32,782    -   Level 1
Trade and other receivables   172,663    143,085    172,663    143,085   Level 2
Financial instruments at fair value through other comprehensive income   332    249    332    249   Level 2
Total financial assets   345,313    233,527    345,313    233,527    
                        
Financial liabilities                       
Trade and other payables   262,054    231,511    262,054    231,511   Level 2
Senior notes   569,275    569,192    541,480    532,987   Level 1
Fixed rate notes   924,672    1,003,834    914,426    931,014   Level 2
                        
Total financial liabilities   1,756,001    1,804,537    1,717,960    1,695,512    

 

All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole, as follows:

 

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

 

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

 

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

 

F-20

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

For assets and liabilities that are recognized at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy. As of September 30, 2024 and December 31, 2023, there were no transfers between the fair value hierarchies.

 

Management assesses that the fair value of cash and time deposits, trade and other receivables, and current liabilities approximates their carrying amount due to the maturities of these instruments being less than one year.

 

The following methods and assumptions were used to estimate the fair values:

 

-The fair value of the quoted senior notes is based on the current quotations value at the reporting date.

 

-The fair value of the promissory note is calculated using the results of cash flow discounted at the indebtedness market rates effective as of the date of estimation.

 

-The fair value of financial instruments designated at fair value through other comprehensive income has been determined using the percentage of shareholding of the Company on the equity of Fossal S.A.

 

15.Commitments and contingencies

 

Operating lease commitments – Group as lessor

 

As of September 30, 2024, the Group, as lessor, has a land lease with Compañía Minera Ares S.A.C., a related party of Inversiones ASPI S.A. This lease is annually renewable, and provided a rent for the nine-month period ended September 30, 2024 and 2023 for S/915,000 and S/860,000, respectively.

 

Consortium contract –

 

On December 19, 2022, Distribuidora Norte Pacasmayo S.R.L., subsidiary of the Group, has subscribed a collaboration contract with a third party, with the purpose to participate together in the project “Mejoramiento del Sistema de Pistas y Cerco Perimétrico del Aeropuerto de Piura”. The mentioned contract is valid for a maximum of 2 years and 11 months.

 

On this matter, the Company has communicated to the tax authority the subscription of the collaboration contract which will take independent accounting and Distribuidora Norte Pacasmayo S.R.L. will be the contracting party that will act as operator of the contract.

 

Capital commitments

 

As of September 30, 2024 and December 31, 2023, the Group had no significant capital commitments.

 

F-21

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

Environmental matters

 

The Group exploration and exploitation activities are subject to environmental protection standards. Such standards are the same as those disclosed on the consolidated financial statement as of December 31, 2023.

 

Tax situation

 

The Company is subject to Peruvian tax law. As of September 30, 2024 and 2023, the income tax rate is 29.5 percent of the taxable profit after deducting employee participation, which is calculated at a rate of 8 to 10 percent of the taxable income.

 

For purposes of determining income tax, transfer pricing transactions with related companies and companies resident in territories with low or no taxation, must be supported with documentation and information on the valuation methods used and the criteria considered for determination. Based on the analysis of operations of the Group, Management and its legal advisors believe that as a result of the application of these standards will not result in significant contingencies for the Group as of September 30, 2024 and December 31, 2023.

 

The Tax Authority has the power to review and, if applicable, correct the income tax calculated by each individual company in the four years following the year of filing the tax return.

 

The income tax and value-added tax returns for the following years are open for review by the tax authority:

 

   Years open to review by
Tax Authorities
Entity  Income tax  Value-added tax
Cementos Pacasmayo S.A.A.  2020-2023  Dec.2019- Set.2024
Cementos Selva S.A.  2019-2023  Dec.2019- Set.2024
Distribuidora Norte Pacasmayo S.R.L.  2019-2023  Dec.2019- Set.2024
Empresa de Transmisión Guadalupe S.A.C.  2019-2023  Dec.2019- Set.2024
Salmueras Sudamericanas S.A.  2019-2023  Dec.2019- Set.2024
Soluciones Takay S.A.C.  2019-2023  Dec.2019- Set.2024
Corporación Materiales Piura S.A.C.  2023  Mar.2023- Set.2024

 

Due to possible interpretations that the tax authorities may give to legislation in effect, it is not possible to determine whether any of the tax audits that may be performed will result in increased liabilities for the Group. For that reason, tax or surcharge that could arise from future tax audits would be applied to the income during the period in which it is determined. However, in management’s opinion, any possible additional payment of taxes would not have a material effect on the interim condensed consolidated financial statements as of September 30, 2024 and the consolidated financial statements as of December 31, 2023.

 

Legal claim contingency

 

As of September 30, 2024, the Group has received claims from third parties in relation with its operations which in aggregate represent S/733,000 that corresponded to labor claims from former employees.

 

F-22

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

Management expects that these claims will be resolved within the next five years based on prior experience; however, the Group cannot assure that these claims will be resolved within this period because the authorities do not have a maximum term to resolve cases.

 

The Group has been advised by its legal counsel that it is only possible, but not probable, that these actions will succeed. Accordingly, no provision for any liability has been made in these interim condensed consolidated unaudited financial statements.

 

Mining royalty

 

The Group signed agreements with third parties and with Peruvian Government related to the use of concessions for extraction activities on process of cement production. The information of the payment of royalties are reveled on the consolidated audited financial statements of the Group as of December 31, 2023.

 

16.Segment information

 

For management purposes, the Group is organized into business units based on their products and activities, and have two reportable segments as follows:

 

-Production and marketing of cement, concrete, mortar and precast in the northern region of Peru.

 

-Sale of construction supplies in the northern region of Peru.

 

No operating segments have been aggregated to form the above reportable operating segments.

 

Management monitors the profit before income tax of each business units separately for the purpose of making decisions about resource allocation and performance assessment.

 

Transfer prices between operating segments are on an arm’s length basis in a similar manner to transactions with third parties.

 

   For the three-month period ended
September 30, 2024
   For the three-month period ended
September 30, 2023
 
   Cement,
concrete,
mortar and
precast
   Construction
supplies
   Other   Total
consolidated
   Cement,
concrete,
mortar and
precast
   Construction
supplies
   Other   Total
consolidated
 
   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000) 
                                 
Sales of goods   499,196    16,122    2,436    517,754    497,008    16,377    3,279    516,664 
Gross profit (loss)   196,054    502    (800)   195,756    174,570    281    (212)   174,639 
Administrative expenses   (62,412)   (730)   (492)   (63,634)   (54,041)   (632)   (426)   (55,099)
Selling and distribution expenses   (19,211)   (225)   (151)   (19,587)   (17,349)   (203)   (137)   (17,689)
Other operating income (expense), net   3,932    6    -    3,938    (10,285)   (5)   -    (10,290)
Finance income   1,629    7    14    1,650    2,039    3    21    2,063 
Finance cost   (25,015)   -    -    (25,015)   (26,906)   -    (1)   (26,907)
Gain (loss) from exchange difference, net   149    (9)   (2)   138    390    1    (15)   376 
Profit (loss) before income tax   95,126    (449)   (1,431)   93,246    68,418    (555)   (770)   67,093 
Income tax expense   (31,327)   149    471    (30,707)   (21,385)   178    229    (20,978)
                                         
Profit (loss) for the year   63,799    (300)   (960)   62,539    47,033    (377)   (541)   46,115 

 

F-23

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

   For the nine-month period ended
September 30, 2024
   For the nine-month period ended
September 30, 2023
 
   Cement,
concrete,
mortar and
precast
   Construction
supplies
   Other   Total consolidated   Cement,
concrete,
mortar and
precast
   Construction
supplies
   Other   Total consolidated 
   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000) 
                                 
Sales of goods   1,395,407    44,099    11,893    1,451,399    1,364,763    54,326    19,609    1,438,698 
Gross profit (loss)   531,214    1,480    (1,518)   531,176    486,340    297    1,175    487,812 
Administrative expenses   (179,164)   (2,095)   (1,413)   (182,672)   (167,868)   (1,963)   (1,324)   (171,155)
Selling and distribution expenses   (55,156)   (645)   (435)   (56,236)   (49,919)   (584)   (394)   (50,897)
Other operating income (expense), net   (499)   (2)   75    (426)   (8,811)   (6)   3    (8,814)
Finance income   4,151    24    50    4,225    4,214    3    56    4,273 
Finance cost   (75,890)   -    -    (75,890)   (76,782)   -    (2)   (76,784)
Gain (loss) from exchange difference, net   (1,235)   (11)   (1)   (1,247)   5,699    -    18    5,717 
Profit (loss) before income tax   223,421    (1,249)   (3,242)   218,930    192,873    (2,253)   (468)   190,152 
Income tax expense   (71,574)   400    1,039    (70,135)   (57,928)   677    140    (57,111)
Profit (loss) for the year   151,847    (849)   (2,203)   148,795    134,945    (1,576)   (328)   133,041 

 

   As of September 30, 2024   As of December 31, 2023 
   Cement,
concrete and
precast
   Construction
supplies
   Other   Consolidated   Cement,
concrete and
precast
   Construction supplies   Other   Consolidated 
   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000)   S/(000) 
                                 
Segment assets   3,141,280    52,418    95,350    3,289,048    3,074,279    46,941    100,266    3,221,486 
Other assets (*)   -    -    332    332    -    -    249    249 
Total assets   3,141,280    52,418    95,682    3,289,380    3,074,279    46,941    100,515    3,221,735 
Operating liabilities   1,876,643    73,524    606    1,950,773    1,968,133    62,907    687    2,031,727 
Capital expenditure (**)   54,611    -    -    54,611    299,326    -    -    299,326 

 

(*)As of September 30, 2024 and December 31, 2023, corresponds to the financial instruments designated at fair value through other comprehensive income for S/332,000 and S/249,000, respectively.

 

(**)The capital expenditures amount to S/54,611,000 and S/299,326,000 as of September 30, 2024 and December 31, 2023, respectively corresponds to purchases of property, plant and equipments, intangible assets and other minor non-current assets.

 

Geographic information

 

As of September 30, 2024 and December 31, 2023, all non-current assets are located in Peru and all revenues are from Peruvian clients.

 

F-24

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

17.Financial risk management, objectives and policies

 

The Group´s main financial assets include cash and short-term deposits (with maturity less than 360 days) and trade and other receivables that derive directly from its operations. The Group also holds financial instruments designated at fair value through OCI, cash flow hedges instruments and derivative financial instruments of trading. The Group’s main financial liabilities comprise trade payables and other payables, loans and borrowings, with short-term and long-term maturities. The main purpose of these financial liabilities is to finance the Group’s operations.

 

The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the management of these risks. The Group’s senior management is supported by financial management that advises on financial risks and the appropriate financial risk governance framework for the Group. The financial management provides assurance to the Group’s senior management that the Group’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group´s policies and risk objectives.

 

The Management reviews and agrees policies for managing each of these risks as mentioned in the consolidated financial statements as of December 31, 2023.

 

Foreign currency risk -

 

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange relates primarily to the Group’s operating activities (when revenue or expense is denominated in a different currency from the Group’s functional currency).

 

Foreign currency sensitivity

 

The following table demonstrates the sensitivity to a reasonably possible change in the US dollar exchange rate, with all other variables held constant. The impact on the Group’s profit before income tax is due to changes in the fair value of monetary assets and liabilities.

 

For the nine-month period ended September 30, 2023  Change in
US$ rate
   Effect on
consolidated profit
before tax
 
U.S. Dollar  %   S/(000) 
         
    +5    (495)
    +10    (991)
    -5    495 
    -10    991 

 

F-25

 

 

Notes to interim condensed consolidated unaudited financial statements (continued)

 

For the nine-month period ended September 30, 2024  Change in
US$ rate
   Effect on
consolidated profit
before tax
 
U.S. Dollar  %   S/(000) 
         
    +5    (1,376)
    +10    (2,753)
    -5    1,376 
    -10    2,753 

 

Liquidity risk -

 

The Group monitors its risk of shortage of funds using a recurring liquidity planning tool.

 

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and debentures of long term. The Group generates positive cash flows by operating activities and has sources of financing sufficiently available according to its good credit record. Debt maturing within 12 months can be rolled over under the same conditions with existing lenders, if necessary.

 

As of September 30, 2024 and December 31, 2023, no portion of the corporate bonds in soles will mature in less than one year.

 

The following table presents the maturity profile of the Group’s financial liabilities based on contractual obligations, imports are presented without discounting:

 

   Less than 3
months
   3 to 12
months
   1 to 5
years
   More than 5
years
   Total 
   S/(000)   S/(000)   S/(000)   S/(000)   S/(000) 
                     
As of September 30, 2024                    
Financial obligations   153,092    268,472    768,182    310,000    1,499,746 
Interests   11,128    67,313    197,186    47,735    323,362 
Trade and other payables   142,590    102,798    -    -    245,388 
Lease liabilities   1,159    2,299    6,324    -    9,782 
                          
As of December 31, 2023                         
Financial obligations   115,092    269,272    625,455    570,000    1,579,819 
Interests   31,769    57,356    231,220    77,643    397,988 
Trade and other payables   175,762    38,439    -    -    214,201 
Lease liabilities   986    2,957    4,186    -    8,129 

 

 

F-26

 

 


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