Cementos Pacasmayo SAA (CPAC)

Cementos Pacasmayo SAA (NYSE:CPAC) is a cement company based in Peru. The company makes and sells cement and cement based products like blocks and ready-mix concrete. In addition, CPAC owns the concession rights to a number of quarries from which it extracts the limestone needed for cement. The majority of Cementos Pacasmayo's customers are based in the construction industry.^[1]

Business Overview

For the first nine months of 2011 ended in September, CPAC reported a net sales of $258.8M. This resulted in a net income of $14.2M. For the same period in 2010, CPAC reported a net sales of $323.8M and a net income of $80.5M ^[2]

New Updates

The company's initial public offering of stock on the NYSE occurred on February 8, 2012. The company offered 20M shares each for $11.50. This was at the low end of the $11.50-$13 initial price range. The deal raised a total of $230M. The lead manger of the deal was J P Morgan Chase (JPM).^[3]

Trends & Forces

Dependence on Peruvian Stability

CPAC operates in Peru and is heavily dependent on the construction industry in the region. A decrease in the country's GDP or a social disturbance will have a direct impact on the revenue of the company. Peru has a history of political and economic uncertainty, and because it is not diversified in product or location, these uncertainties could have a significant impact. ^[4]

1. ↑ CPAC F-1/A 2012 PROSPECTUS SUMMARY "Overview" pg 1-2
2. ↑ CPAC F-1/A 2012 PROSPECTUS SUMMARY "Summary financial and operating data" pg 16
3. ↑ Renaissance Capital - IPO Home "Cementos Pacasmayo SAA prices IPO at $11.50, at the low end of the range" 8 Feb 2012
4. ↑ CPAC F-1/A 2012 PROSPECTUS SUMMARY "Risk Factors" pg 18