Good morning, everyone, and welcome to Ferreycorp's fourth quarter 2024 earnings conference call. Joining me on the call today is Mrs. Mariela García, our Chief Executive Officer, and Mrs. Patricia Gastelumendi, our Chief Financial Officer. We will begin our call with an overview of the quarter, focusing on our financial results. At the conclusion of our prepared remarks, we will open a Q&A session. At that point, and if you wish to make a question, please let us know it through the chat box below, or raise your hand and we will announce you. At this time, and through our leaders' presentation, we ask all participants to keep their microphones off. Please note that this call may include certain forward-looking statements.
These statements relate to expectations, beliefs, projections, and other matters that are not historical facts, and are therefore subject to risks and uncertainties that might affect future events or results. With that, now, I'd now like to turn the call over to Mariela García. Mariela, please go ahead.
Thank you. Thank you, Jimena, and good morning, everyone. Today, we will review a brief presentation, which is available in our website, that supports the discussion of the company's results and main highlights for the first quarter 2024, according to the financial statements published on Wednesday after board approval. Before explaining the results of the period, I would like to highlight an important event of the quarter that occurred after our last call. On March 27, we held our shareholders' meeting, and it approved a cash dividend of PEN 260.3 million , amount that represent a 60% of the free disposal profits of the fiscal year 2023, without considering the appraisal surplus related to the sale of a facility we recorded last year.
That 60% is equivalent to the upper limit of the dividend policy. Given that, on October 26, 2023, we paid an advanced cash dividend of PEN 100 million. The remaining amount to be paid is PEN 160.3 million. This amount is equivalent to PEN 0.17 per share, and the payment date is today, April 26, and the record date was last April 17. Now, let's go to slide 3, where we will begin a brief introduction. Through the first quarter of 2024, Ferreycorp delivered a strong operational result and was able to keep a solid financial position, as shown by a 115 net profit, or PEN 115 million net profit, an ROE of 16.7%, and a ROIC of 12.12%.
The main drivers of these results were, in first place, higher sales, with a significant boost in spare parts and services derived from the growing equipment population and the broad service offering and capabilities of our companies, and additionally, the maintenance of a strong gross margin and controlled SG&A. I would like to start with an overview of the business environment in Peru. GDP growth for 2024 is estimated to be around 2.8%, showing an important recovery from the 2023's -0.5%. A rough estimate of the first quarter is a GDP increase of approximately 1.5%, and as you might remember, in the first quarter, 2023, GDP recorded a decrease of 0.4%, given that many activities paused in several regions at the beginning of last year.
So we are starting this year with a strong first quarter, with 1.5% growth, compared to the -0.4% of last year, and that is reflected in our sales in this first quarter. If we look into growth rates by sectors, excuse me, we observe a general positive trend. Construction grew 5.5%, mining grew just 6.2%, and commerce and services grew 3.9%. If we talk about private investment, it's estimated to have a modest growth of 2%, due to the continuing lack of business confidence as a direct result of the constant political instability, although in the last month, the trend has changed slightly. Regarding public investment, it is expected to show an important boost of around 30% in this first quarter.
During this first quarter, Caterpillar mining equipment sales... In general, equipment sales have risen. First, the mining equipment sales significantly increased by 54%, because in first quarter 2023, they were very, very small. But remember, as we always explain, that sales of large mining products vary significantly among quarters due to its large value and the specific delivery dates. As for sales related to equipment for non-mining clients, they are significantly higher as well, compared to the first quarter 2023, showing a 37% growth, boosted mainly by sales to infrastructure and construction projects originated from activity in local and regional governments, as well as small and medium-sized contractors....
We have also continued to experience some positive impact from sales from government entities aimed at improving their capacities, in order to be able to face the infrastructure improvements needed by the country, as well as being able to deal with the effects of the rain season. Hmm, worth mentioning as well, is that the rental and used equipment business unit sales increased in 28% compared to first quarter last year. As for the sale of spare parts and services during the first quarter of this year, they represented 59% of total sales, and amounted to PEN 1,072 million, 18.5% higher than the sales achieved in the first quarter, 2023, and again, showing a new sales record.
After describing the business environment, the economic environment, and reviewing our sales for the first quarter, I would like to turn the call now to Patricia Gastelumendi, our CFO, to discuss the financial results of this first quarter.
Thank you, Mariela. Good morning to everyone. Consolidated sales amounted to PEN 1.8 billion, which is an increase of 17% compared to the first quarter of 2023. In dollars, the quarter sales amounted to $485 million, 19% higher than in 2023, when first quarter sales reached $400 million. These numbers reflect what we mentioned earlier about the improvement in the economic activity year-to-year. Gross profit increased by 14% compared to first quarter 2023, and amounted to PEN 488 million, led by the greater sales and solid margins. Gross margin was 26.7%, lower than the first quarter 2023 level of 27.3%.
When we remove the FX impact, the adjusted gross margin for the first quarter 2024 will be 26.6%, still lower than the adjusted gross margin of 28.2%, recorded in the first quarter 2023. This is mainly explained by the sales mix and the larger number of new machines sold in this quarter. Sales of spare parts and services accounted for 59% in this quarter, almost the same to 58% recorded in 2023 first quarter. Regarding the operating profit, it jumped 25% compared to first quarter 2023, and reached PEN 209 million, impacted by higher sales, good margins, and controlled SG&A expenses. The operating margin this quarter was 11.4%, compared to 10.7%, recorded in the first quarter 2023.
If we remove the FX impact, the adjusted operating margin decreased to 11.3%, a little lower than the 11.5% adjusted margin reached in the first quarter 2023. SG&A expenses amounted to PEN 279 million, an increase by 8% compared to the same quarter in 2022, first in 2023. A percentage much lower than the 17% sales growth. This rise is explained basically because of higher variable expenses associated with sales growth. As a percentage of total sales, SG&A expenses represent 15.3%, lower than the sixteen point six percent level reached in the first quarter last year. Moving to the net financial expenses, they amount to PEN 22 million in the first quarter 2024, which represents a thirty percent increase year to year.
This increase is mainly a result of a higher average cost of debt, which is now 5.13%, compared to last year's 3.98%. This hike in cost of debt is because of the average short-term debt interest rate, which jumped from 4.43% in the first quarter 2023 to 6.54% in 2024. While our average medium-term debt interest rate increased from 3.75% to 3.90%. Let me assure that we keep looking for the most favorable conditions among our diversified portfolio of financing alternatives, to try to control the financial expenses growth. We now need to explain the FX result during this quarter. Let's start reviewing the evolution of exchange rates.
We now need to explain the FX result in the first quarter 2024, which are a consequence of volatility in the exchange rate we continue to experience. We finished 2023 with the revaluation of Peruvian sol. However, in January, this trend shifted, and we experienced a devaluation of our currency. The following two months, the trend shifted again, and we experienced a revaluation once again. By the end of the quarter, the Peruvian sol finally ended at 3.72, having started the year at 3.71. The net result was an FX loss in this quarter, which reached PEN 17.2 million. In first quarter 2023, we had an FX gain of PEN 27.7 million. We estimate that there is a remaining balance of around PEN 2.7 million as of March 2024.
That will be offset by the decrease in the gross margin in the next few months. The pace of that offset will depend on the future evolution of exchange rates. As we always explain, it is very important to remember that the foreign exchange gains or losses only generate an accounting impact, because the inventory is registered in soles, but will be sold in dollars. The FX loss will be recovered in the upcoming months through the gross margin, and the opposite will happen when there is an FX gain. As for EBITDA, first quarter 2024, EBITDA amounted to PEN 275 million, which showed a significant increase of 20% compared to the EBITDA reported on the same period last year. The corporation reported a 15% EBITDA margin, higher than the 14.7% obtained in the same period of 2023.
When we remove the FX impact, the adjusted EBITDA margin slightly declines to 14.9%, lower than first quarter of 2023's adjusted EBITDA margin of 15.5%. Now, let's move on to slide 9 to review the net profit during the first quarter 2024. Net profit during the first quarter reached to PEN 115 million, a decrease of 5%, mainly explained by an FX loss of PEN 17 million as a result of the devaluation of the sol, a net financial expenses increase of 13% or PEN 5 million, which resulted mainly from a higher average cost of debt, depreciation and amortization, a decrease in 6% or PEN 4 million.
All of this was partially offset by the increase in EBITDA of 20%, or PEN 45 million, and a lower income tax, which declined by PEN 3 million. As we explained before, FX rates showed some volatility within the quarter. As a result, the devaluation of the currencies negatively impacted the bottom line. But when looking at the adjusted results in the first quarter, we can observe that the net income reached PEN 126 million, 13% higher than the PEN 111 million adjusted net income level reached in the same period, 2023. Please, let's go now to slide 11 to review financial resources and cash generation.
Total debt as of March 2024 amounted to $553 million, 8% higher than the $511 million reported as of March 2023. Of the total amount, 67% is current debt, and 33% is long-term debt. So far, we have not structured any major debt, hoping for a decrease in interest rate in the following months. Regarding the cash balance as of March 2024, we have $87 million, funds that will be used to pay cash dividend today, April 26. Currently, the corporation do not foresee the need to secure extra cash. We should point out that in the first quarter 2024, the company had a positive free cash flow of PEN 363 million, driven by the increase in EBITDA.
Leverage ratio as of March 2024 stood at 1.78 x, lower than the 1.84 reached in March 2023. Additionally, the adjusted Debt to EBITDA ratio amounted to 1.10x , way below our covenant limit of 3.5. Now, let's move to slide 12 to review the state of financial position main accounts. As of March 2024, total assets amounted to PEN 6.4 billion, an increase by 5% if compared to March 2023. The main variations are: cash and cash equivalent increased by PEN 93 million, funds that will be used to pay cash dividends today, as mentioned before. Inventory went up by PEN 90 million, aligned with the increase in sales experienced during the quarter. Accounts receivable decreased by PEN 54 million.
Property, plant, and equipment increased in PEN 175 million with the acquisition of a new facility for Ferreyros, which we explained last quarter, and also because of an important increase in rental fleet units. The cash conversion cycle improved a bit from 149 days to 147 days as of March 2024. This result is impacted by inventory's day turnover, which decreased from 154 days to 145 days. Collections days, that increased from 48 to 49 days, and by payable days that declined from 54 to 47 days. Regarding the asset turnover ratio, as of March 2024, it was 1.17, showing an improvement from the 1.12 level achieved by March 2023. Now, let's turn to slide 13 to discuss our CapEx.
Net investment in fixed asset as of March 2024 reached to $12 million, and the main items were: $2 million in infrastructure investment, $5 million in machinery and equipment for workshops, $2 million net investment in rental fleet. I will turn the call back to Mariela now for the closing remarks.
Thank you, Patricia. After explaining the commercial results, the profit and loss statement, and the balance sheet for the first quarter, 2024, I want to close the presentation with some remarks. We have achieved another quarter with solid results, and we maintain a positive outlook for 2024, though not without its challenges. But we're confident in our business model and capabilities, and, we want to express also our commitment to continue with our strategy, aim to achieve profitable growth and shareholder value creation, leadership in the markets where we operate, high customer satisfaction, and last but not least, to generate a positive impact in our stakeholders. This concludes our presentation for today. Thank you for your time, and now we'll be glad to take your questions.
Mariela, Luis Ramos is the first one to have a question.
Hi, Mariela. Hi, Patricia. Hi, Jimena. Congrats on the results. I was wondering if you could give us more color on the top-line growth that you experienced this quarter. How much was explained by a lower comparable base, given this social unrest as you experienced it in first quarter 2023? And how much was of this perceived recovery that you, Mariela, mentioned at the beginning of your presentation? That would be my first question. And the second one, I would say that have you revised your top-line expectation for this year after this solid results in the first quarter? Thanks.
Thank you, Luis. So, our better top line of this quarter is precisely because of the comparison with this economy and country that was halted in first quarter 2023. So most of the variation comes from the fact that last year some highways were closed. We were even unable to bring some components from some mine sites to our shops, no? So, of course, a great part of this is derived from the fact that last year everything was closed. The good thing is that we are receiving requirements from customers all over the line. So we mentioned rentals, we mentioned used, we mentioned prime equipment for non-mining and prime equipment for mining.
All of this was really envisioned by us, so the results that we are seeing this quarter are, I would say, 5% higher than what we envisioned for this first quarter. Probably that 5% is also coming from a sale that we were thinking to close in this or to invoice in December and was carried over to this year. I would say this first quarter looks very much similar to what we were envisioning.
What we see for the rest of the year, we're seeing a stronger year, definitely, reflected in this forecast of GDP for the year compared to the decrease last year, based on a slight better sentiment from private businesses, based also in some concessions awarded, that of course, will take some time to implement, but it starts to move a different sentiment. So we're positive for the remainder of the year.
Thanks, thanks. And just a follow-up on this, and to be precise, the revenue growth that you expect for this year should be on the mid-single digit range or what are your expectation for revenue growth in 2024?
No, it is, it's still in the one digit, and I would say, in the second half of the one digit.
Okay. Got it. Thank you very much.
So remember that, it's growth, but based on a very important level of last year as well. So we're constantly growing, and the market is allowing us more opportunities as well.
Thanks.
Mariela, I think there are no more questions at this time.
Oh, thank you, Jimena. Okay. Each time we change mics, there is some distortion here. Sorry for that. So well, thanks for all of you in participating in our call today. We're 36 people today in the meeting. We hope to continue having your interest and your participation in the following calls. We'll continue to update you on how the economy and the sectors that we serve evolve, and of course, our financial situation. Thank you very much, and please remember that we are always at your disposal. Between call and call, there is always our team here in the finance and division and in the investor relation effort, all of us here with us today. So please make... We remain at your disposal, and see you, if not before, in our next quarterly call. Thank you.