Earnings Call: Q2 2026

Aug 18, 2026

Summary

Q2 revenue and EBITDA grew YoY, with higher margins and net profit; H1 EBITDA edged up, but net profit and gross margin were pressured by the Camisea incident and FX losses. Growth was broad-based, led by the U.S., Chile and energy operations.

Good evening, and welcome to the Grupo UNACEM Second Quarter 2026 Results Conference Call. At this time, all participants are in listen only mode. A brief question and answer session will follow the formal presentation. Depending on what you require operator assistance from the conference, please press star zero on your telephone keypad. You can also ask a question via the webcast. Please ask your questions, it will be answered accordingly. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alicia Campos, Corporate Chief Strategy Officer. Thank you, Alicia, you may begin. Thank you, Kevin. Good morning and welcome to our earnings conference call. My name is Alicia Campos, and I am pleased to be joined by Pedro Lerner, our CEO, and Alvaro Morales, our CFO. After their presentation, you will have the opportunity to ask your questions. Please note that we might disclose some forward-looking statements related to Grupo UNACEM, based on currently known facts, expectations, and forecasts, circumstances, and assumptions regarding future events. Many factors could cause the future results, performance, and achievements of Grupo UNACEM to be different from those expressed or assumed herein. This should be considered for reference only. Pedro, you may begin. Thank you, Alicia. Ladies and gentlemen, good morning. It is a pleasure once again to share with you our performance this past quarter. Our consolidated EBITDA for the quarter reached PEN 468 million, up 19.7% from the second quarter of 2025. This solid performance reflected both strong top-line growth and higher profitability. Revenue increased 10.6% year-over-year to PEN 1,931 million. The EBITDA margin reached 24.2%, 180 basis points above the second quarter of 2025. This positive trend is in line with our expectations, supported by strong demand and favorable pricing across our Latin American markets. In Peru, we are encouraged by President Fujimori's initial message, as her government's priorities seem to be focused on infrastructure investment, preparing for the upcoming El Niño phenomenon, and improving overall safety conditions. In Ecuador, higher fuel costs were offset by a more balanced energy mix, strong volumes, and favorable pricing. In Chile, we completed our first quarter of operations with additional installed capacity at the Puente Alto Mill, resulting in a significant increase in volumes. Our energy operations in Peru also posted a solid recovery from the prior quarter, supported by the normalization of the Camisea gas pipeline service and the addition of new clients to our portfolio. Regarding our U.S. operations, market trends have started to improve in Arizona, but are still lagging in California. Having said that, our team is focused on achieving operating efficiencies at the plant level and working capital management, all of which will improve our competitiveness in the current market conditions. At the corporate level, our priority is to complete our initial strategic plan. Following the formalization of Grupo UNACEM and the establishment of our new corporate structure in 2022, we launched our first group-wide strategic plan focused on standardizing operations and generating synergies across all business units. Key initiatives included the creation of our Global Business Service Hub, our corporate safety program, Vida Primero, and our roadmap toward carbon neutrality. As we conclude the Unlocking Value phase, we are defining the priorities for our next strategic cycle to maximize value and build on the progress achieved. We will share further details in the coming months. That will be all on my side. Thank you very much for your attendance this morning, and now I will pass it over to Alvaro for a detailed analysis of our financial results. Thank you, Pedro. Good morning, everyone. Thank you for joining us today. I am pleased to discuss our second quarter and year-to-date financials. As Pedro mentioned, this period reflects the strong performance of most of our business lines across our operations. During the second quarter of 2026, our consolidated revenues were driven by strong volume performance. We posted higher cement volumes overall, improvement in the ready-mix market in Chile, and continued growth in our energy platform. In the U.S., improved market activity drove higher volumes across all our business lines. This result led to a 10.6% growth versus the second quarter of 2025. Year to date, our consolidated volumes were also strong across most of our markets. In Peru, cement volumes showed sound performance. While ready-mix volumes declined due to the absence of large-scale projects. Our energy business continued to grow, supported by higher generation at Celepsa following the addition of new clients. Ecuador posted growth in both cement and ready-mix, driven by an ongoing demand recovery. In the United States, the Arizona market is picking up steadier than California, but we are recording higher volumes across all business sectors. In Chile, both cement and ready-mix volumes showed encouraging growth. Overall, these trends resulted in an 8.9% increase in revenues compared to 2025. As you can see in the chart, our portfolio volumes performed well across the board, with the exception of ready-mix in Peru. In Peru, during this quarter, cement dispatches registered 1.5 million tons, an increase of 6.4% versus the second quarter of 2025, reflecting both cement sold and internal transfers for ready-mix production. On the other hand, clinker exports through the Conchán terminal reached 204,000 tons, 20.9% higher than in the second quarter 2025, consistent with the expansion of our Chilean operations. Year-to-date dispatches were 8.6% higher. Average prices were higher, reflecting a price increase implemented in the second quarter of 2026 through the traditional channel. Our ready-mix business in Peru recorded 501,000 cubic meters, compared to 612,000 cubic meters in the second quarter of 2025, a decrease of 18.1%, due to lower demand in housing, private projects, and the mining sector. Year-to-date, volumes were 15% lower. Celepsa consolidated volume was 61.1% higher than in the second quarter 2025, with energy sales reaching 1,498 gigawatt hours. Year-to-date, energy sales increased by 41.2%, reaching 2,799 gigawatt hours, driven by the addition of Mina Antapaccay and Luz del Sur as clients since the beginning of the year. Ecuador. Cement volumes increased by 14.9% to 347,000 tons, compared to 302,000 tons in the second quarter 2025. Ready-mix volumes were 63,000 cubic meters, slightly down by 0.4% versus the second quarter 2025. Year-to-date, cement volumes grew 13.1%, and ready-mix grew 6.9%, reflecting market growth, higher private investment, and domestic consumption. U.S. operations. UNACEM North America reported 370,000 metric tons of cementitious materials during the second quarter 2026, versus 331,000 cubic meters in the second quarter of 2025, an increase of 11.8%. This overall growth showed mixed trends by mark, with Drake volumes growing by 23%, whilst Tehachapi volumes grew by 1.7%. Ready-mix operation recorded 349,000 cubic meters, 27% higher than in the second quarter 2025. Aggregates volumes were 55.6% higher, amounting to 571,000 metric tons. Cement prices were slightly lower, and ready-mix prices declined due to market conditions. In contrast, aggregates prices were slightly higher. Year-to-date, overall cement dispatches increased 13.6%, reaching 696,000 metric tons, driven by higher market demand, mainly in Arizona. Ready-mix increased 19.2% to 604,000 cubic meters, and aggregates increased 31.6% to 959,000 metric tons. Chile. Cement dispatches recorded 216,000 tons during the quarter, 63.6% higher year-over-year, driven primarily by the additional capacity and consequently new clients from the Puente Alto plant since April 1st. Ready-mix dispatches were up by 5.8%, with 292,000 cubic meters dispatched, driven by solid performance in the metropolitan region and the addition of two new plants during the quarter. Year-to-date, cement dispatches reached 363,000 metric tons, up 36.6%, while ready-mix reached 587,000 cubic meters, up 9.5%. Average prices for both cement and ready-mix were high. Consolidated cost of sales increased by 6.9% in the second quarter of 2026, drawing gross margin up to 26.3% for 23.8% in the second quarter 2025. The main drivers were lower cement costs in UNACEM North America, in line with our expectations. As annual maintenance of both U.S. cement plants was completed in the first quarter 2026. Compared to the prior year, when overhauls were executed in the second quarter 2025. Additionally, higher cement margins in Peru and Chile, as well as a stronger energy margin at Celepsa, contributed with a higher profitability and offset higher energies cost in Ecuador. Year-to-date, results were impacted by the Camisea gas pipeline incident in the first quarter 2026. As a result, consolidated cost of goods sold increased by 11.2%, pressuring year-to-date gross margin to 22.8% compared to 34.4% in the same period of 2025. Our administrative expenses in the second quarter were 5% higher than in the second quarter 2025, driven by higher consultancy costs, supporting the development of the strategic agenda and long-term business plans across all business units, as well as higher personnel expenses at UNACEM North America to reinforce the management team. Despite this increase, as a percentage of revenues, administrative expenses reached 7%, slightly lower than the 7.4% recorded in the second quarter 2025. Year-to-date, administrative expenses decreased 2.4%, reaching 7.2% of revenues, due to accounting reclassification from expenses to cost at UNACEM North America. Selling expenses were 36% higher than in the second quarter of 2025, driven by the strong market activity and higher innovation services and advertising costs to strengthen UNACEM Peru commercial strategy. As a percentage of revenue, selling expenses reached 2.6% compared to 2.1% in the second quarter 2025. Year to date, selling expenses increased 21.8%, reaching 2.2% of revenues, driven by higher innovation services in Peru and to a lesser extent by higher personnel expenses at UNACEM North America. In the second quarter, other net expenses amounted PEN 12 million compared to a gain of PEN 1 million in the second quarter 2025. This shift was primarily driven by lower other income, reflecting the absence of non-recurring items recorded in the second quarter 2025. Specifically, insurance indemnification income at UNACEM Peru and a one-time efficiency bonus released at Termochilca. Additionally, other expenses increased due to higher demurrage charges at UNACEM Peru. Year to date, other net expenses amounted PEN 24 million compared to a gain of PEN 6 million in the same period of 2025, reflecting the same dynamics observed in the quarter. Consolidated EBITDA for the second quarter reached PEN 468.9 million, 18.7% higher than in the second quarter 2025, with margin expanding to 24.2% compared to 22.4% in the second quarter 2025. This strong quarterly performance was well placed across most of our operations, led by UNACEM North America, following the completion of our maintenance at both plants, which, as we mentioned earlier, was executed in the first quarter 2026 compared to the second quarter 2025 last year. Celepsa also posted higher margins with the addition of new clients. In Chile, results continued to improve, driven by the stronger market and by the additional installed capacity from the Puente Alto plant, as well as the addition of Precast projects to the portfolio. Ecuador also posted solid EBITDA growth supported by volume and price improvement, which offset higher energy costs. These gains were partially offset by UNACEM Peru, where a higher share of lower margin products in the sales mix weighed on results. Year to date, EBITDA reached PEN 788 million, 0.9% above the first half of 2025, with margin declining to 21.2% from 22.8% in the same period last year. This more modest result largely reflects the negative impact of the Camisea gas incident in the first quarter 2026, which significantly increased energy costs and pressured Celepsa year-to-date margin, and to a lesser extent by weaker results in the Precast segment in Chile and Ecuador during the first quarter. Net profit reached PEN 175 million in the second quarter 2026, 65.5% higher than in the second quarter 2025, with net margin expanding to 9.1% from 6.1% in the prior year period. This improvement was primarily driven by the recovery in operating margins across our cement and energy operations, as we have just discussed. Additionally, financial expenses declined to PEN 88 million in the second quarter of 2026 compared to PEN 102 million in the second quarter of 2025, reflecting improved interest rates and a lower debt balance compared to the same quarter last year. These gains were partially offset by lower foreign exchange gains, which came in at PEN 30 million in the second quarter of 2026 compared to PEN 20.6 million in the second quarter of 2025. Year-to-date net profit reached PEN 174 million, 19.9% below the first half of 2025, with net margin declining to 4.7% from 6.4% in the same period last year. As we have discussed throughout this presentation, the year-to-date results reflect the pressure from lower operating margins, as well as the absence of non-recurring income recorded in 2025. Additionally, the foreign exchange shift from a gain of PEN 48.8 million in the first half of 2025 to a loss of PEN 8.4 million in 2026, as the Peruvian sol devaluated against the US dollar. These effects were partially offset by lower financial expenses, which declined to PEN 175 million from PEN 189 million in the same period of 2025. In terms of CapEx, disbursement totaled PEN 363 million compared to PEN 349 million last year. Our main investments are on our ongoing projects in the new lime plant in association with Calidra, with a total CapEx of PEN 94.7 million so far, and UNACEM Peru several projects, namely the new primary crusher, gas suspension absorber, the roofing of the clinker fields, and the construction of the electric transmission system that will ensure energy supply at our Atocongo plant, as well as new mixer trucks and pump trucks at UNICON Peru. In Ecuador, the maneuver and dispatch yard and projects to improve the use of the roller crusher are underway, while in the U.S., investments are focused on equipment upgrades to existing facilities. Consolidated net debt was PEN 5.1 billion as of June 2026, higher compared to the end of last year, reflecting CapEx execution, primarily the PEN 75.7 million in financing allocated to the construction of Calcem. The net debt/EBITDA ratio was 3.15x above the figure at the end of the previous year that was 3.04x. Thank you. That will be all from my side. Now we open the microphone for your questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question today, we ask that you please type your question into the webcast. Once again, if you do like to ask a question today, please type your question using the webcast. One moment please while we pull for questions. I will turn the floor back over to management. Once again, if you do have any- Thank you, Kevin. Go ahead, request. Sorry. Thank you, Kevin. We have our first two questions on our U.S. operations. The first question is from Marianne Gonif, from Credicorp Capital, and her question is, do you expect the U.S. volumes to be sustained for the rest of the year and into 2027? The second question comes from Gabriel Perez, also from Credicorp Capital. His question is, taking into account that other geographies in the U.S. are posting weak cement demand volumes, why do you think that your current operation is having positive results? What are your expectations for the rest of the year in terms of demand? Alvaro? Thank you for the questions. The first one, although the expectation is for the market to remain flat, our Arizona operations are outperforming and recovering market share, with the plant operating close to full capacity. Regarding California's plant, we are reviewing our go-to-market strategy to increase our client base. The other question, thank you very much for Gabriel. The new management in place at UNACEM North America is working on several efficiencies at the plant level, logistic and working capital level, which will enable us to reach a broader geographic coverage and gain market share. [Foreign language]. Thank you, Alvaro. We have an additional question from Gabriel Ramos. Thank you, Pedro. Give us one minute while we review the next question, please. Our next question comes from Jose Pizarro from Bank of America. Could you share the breakdown of CapEx between maintenance and expansion growth initiatives in the second quarter of 2026 and provide some color on whether maintenance CapEx is expected to remain at similar levels in the second half of the year? Alvaro. Thank you for the question. Our CapEx budget for the year is around PEN 1.1 billion. From that, PEN 74 million are for maintenance, and the rest is for growth and sustainability initiatives. CapEx for sustainability and growth. Thank you. Thank you, Alvaro. Kevin, I think we don't have any additional questions at the moment. If there are no further questions, Alex, Ana, Flo, back over to you. Any further closing comments? I think Pedro has closing comments. Closing comments? Sure. Thank you. Thanks, Kevin. Thank you very much. Thank you very much to all of you for your time this morning, and please do not hesitate to reach out to Alicia should you have any follow-up questions. Have a great day. Thank you. That does conclude today's teleconference and webcast. Let me just connect the lines out this time, and have a wonderful day. We thank you for your participation today.