Good morning. Welcome to the Cementos Pacasmayo’s Second Quarter 2016 Results Conference Call. With us today are Humberto Nadal, Chief Executive Officer; Manuel Ferreyros, Chief Financial Officer; and Claudia Bustamante, Head of Investor Relations. As a reminder, all participants will be in listen-only mode. During the conference call, management will make forward-looking statements to assist you in understanding its expectations for future performance. These statements are subject to a number of risks that could cause actual results and events to differ materially, and I refer you to the company’s press release of July 21, 2016, and the company’s most recent regulatory filings for discussion of those risks. In addition, statements during this call are based on management’s views as of today and it is anticipated that future developments may cause these views to change. Please consider the information presented in this slide. The company may at some point elect to update the forward-looking statements made today, but specifically disclaims any obligation to do so except where required by law. I’ll now turn the call over to Ms. Claudia Bustamante, Head of Investor Relations.

Good morning, everyone. Welcome to Cementos Pacasmayo second quarter 2016 results conference call. Our presenters today will be Mr. Humberto Nadal, Chief Executive Officer; and Mr. Manuel Ferreyros, Chief Financial Officer. After today’s presentation, there will be a question-and-answer session. Please note that today’s call is being recorded and that the content of this call cannot be reproduced in whole or in part without express consent from the company. I will now turn the call over to Mr. Humberto Nadal, Chief Executive Officer.

Thank you. Thank you, Claudia. Hello, everyone, and thank you for joining our second quarter 2016 earning results conference call. Our results for this quarter give an indication of our long-term operational and cost earnings power in a supportive industry environment. This was our first full quarter with our Piura facility running near its full initial capacity. The facility, as you all know, the most larger in all of Latin America accounted for almost 40% of our Piura and clinker cement output. They’re using the output from our other facility. As there’s a lot of these new clinker production, we were able to end our imports of clinker completely. This eliminates our exposure to this volatile expense line in a longstanding objective for the company in recent years. As a result of these operational step up, we saw very strong performance in our key metrics. Total volume for cement, concrete and blocks were up 4.8%. Revenues rose 9.1%, almost twice the rate of the volumes stands to an increase in the price of cement and ready-mix. EBITDA was up 15.7% to S/ 93.1 million and EBITDA margin expanded by a 180 basis points, excluding one-off income in the year-ago quarter, due to income from sale of our real estate assets. We included this income with EBITDA rise by 4.3%. The environment in Northern Peru is one of continued strength. The three major projects in our commercial area are, as you know, it’s our Chavimochic irrigation project, Longitudinal de la Sierra Highway, and Talara Refinery vis-à-vis see significant volume in the second quarter, the relative return in the execution, the most advanced, the Talara Refinery still have 40% of achievement still to come by our estimate. As a result, we’ve said each of these projects to be a steady source of…

Thank you, Manuel. To sum up, our results for the second quarter and first-half of the year saw solid growth, efficient production, and expanding margins. These and our performance year-to-date and the current condition of the cement industry, we see full-year volumes of cement, concrete and blocks posting mid single-digit growth, and our companies that are leading to leverage, which generates positive financial results. Operator, I will now open the call for Q&A.

[Operator Instructions] And we’ll take a question from Francisco Suarez of Scotiabank. Your line is open.

Thank you so much. Good morning and congrats on the results and thank you for your call. The questions I have is, I think, again for Port Authority [ph] now that we’re commissioning for having the total on deposits that’s given is still you wanted to move. Can you explain a little bit more of the three projects that are on this with efficient phase that we could always in Northern Peru. I want to get a sense of how much or how cement will tend to be – those projects maybe compared to [indiscernible] or the Sierra projects and the like. Any color on that would be very, very most appreciated? Thank you.

Thank you, Francisco. This is Humberto, and thank you for joining the call. Well, like I mentioned of three projects, the most significant one is city of Olmos. And there’s a little most significant one, because it is the first case in the history of Peru, where our CD will be built from scratch. We think that three projects together may bring, at least, on the comparative side around 50,000 tons of Cementos for the next two or three years. But these are only on the first phase, because that’s only for the basic obligation of the city of Olmos. Once we start building and I’m talking of roads, I’m talking, of course, homes, I’m talking hospital and everything. These amount of cement could really probably triple almost quadruple for the next three, four years. The reason we’re being conservative is, because so far, they’re going to start the basic urbanization on that, where we have two projects with 150,000 tons. But I think Olmos would turnout to be the largest demand of cement of our senior project in the East or the North part of Peru.

Fantastic. Thank you for that. And finally, just very quickly another question, it seems for what I read and understood on your press release that you are – you already reached the overall utilization, I think, our utilization at Piura, I do might expect at this stage, then of course, you will be rolling back utilization only if demand improves going forward? Am I right, or is it a intent to do a little bit of more catch up in the short-term without what happens with cement demands in settings?

So, you’re right on the first part of your statement. I mean, Piura is now operating really, I mean, sort of, first of all above nominal capacity and in terms of how much when use of it goes to tense solely on the demand of the market. And as you know, I mean, what we say that the three plants operating are [indiscernible] the last funded part will come from the plant that gives us a highest marginal profit, where it will be the Pacasmayo, Piura, or Rioja, I mean, I think we’re at the comfortable rates right now.

Yes, it makes perfect sense. Thank you for that and congrats again.

Thank you, Francisco.

[Operator Instructions] We’ll move next to Froilan Mendez, JPMorgan. Your line is open.

Hi, gentlemen, thank you very much for the call. Congrats on the results. So it’s be redundant, could you repeat again the tons of cement that you expect from Olmos and what is the timeline do you – we should be expecting on operating and could be reaching? I know it’s very initial, but just to have your take? And secondly, could you go a little bit into price increases during the quarter and how did you see – how was prices increases? And also regarding the phosphate project, is there any update on your plans there? Thank you very much. Manuel Ferreyros Peña: Sure. I’ll take the three questions one-by-one. And the first one, like I mentioned, I mean, we’re on the conservative side expecting 150,000 tons of cement for three projects over the next 2, 2.5 years, starting the second part of this year. Like I said before, when Francisco made the question, in the case of Olmos, that’s only for the basic urban rehabilitation of the CD, I think that there’s a lot of the amount of cement coming in the future. In terms of price, on the cumulative of the year, we’re a little bit close to 3.5% price increase. For the rest of the year, we are going to see what happens with the company conditions, like you say, I mean, like you know, we are very, very committed to keeping our high market there and our solid position in the market. So we may see a little bit more. But I think going out for the first part of the year is probably high as we’ve seen in many, many year. Regarding the phosphate, I hope that by the end of the year, we will have a final decision on one of the major project.

Sorry. You said 10% year-to-date prices? Manuel Ferreyros Peña: 3.5%.

3.5%? Manuel Ferreyros Peña: Yes.

Great. Thank you very much. Manuel Ferreyros Peña: Thank you.

And there are no further questions at this time. Actually we do, we have a question from Julio Arantes, JPMorgan. Your line is open.

Hi, thank you for your call, Humberto, Manuel, and Claudia. I have a couple of questions. The first, could you please verify what is your CapEx specification for the year? And also, we saw sort of you’ve been part of buildup during the quarter verification for the coming quarters and why did we see the strategy in the second quarter of 2016?

Yes, the total CapEx for this year should be around, as we mentioned reported on 30 million to –$30 million. And basically inventories during the second-half or the second quarter has increased a little bit, because we’ve been making some stock of fee incur, because we have overcapacity in the Piura plant. We stopped the Piura for clinker during June and July, so we are using some of that stock. This eventually should go down during the third and fourth quarter, because we were going to use the clinker that we have in the stock from the Piura Plant.

Okay, thanks. And also we’ve seen that in the past you had a heavier cash balance and you used a part of that cash to payout dividends in the fourth quarter. My specification that you have in terms of the minimum cash balance that you’ll be comfortable with and also what we could see in terms of dividend for this year? Manuel Ferreyros Peña: Yes, we mentioned in previous calls, what we feel very comfortable is with around S/ 20 million in our cash balance. And we should have that – it was more than that after the dividend and we will see it in our stock.

Perfect. Thank you very much.

We’ll move next to [Daniel Solomon of MetLife] [ph]. Your line is open.

Hi, everyone. First of all, congratulation on strong results. And I’m just curious how much of the Piura recorded improvement on EBITDA margin would you attribute to the new Piura plant instead of the stoppage of the Pacasmayo plant? That’s one. And then, do you have any updates on the phosphate project? And would you provide leverage guidance for year-end? Manuel Ferreyros Peña: Yes, basically, the increasing margins beneath has been, because of beginning of the Piura plant, as we’ve already mentioned, we should hit around 34% at the end of this year, in the last quarter of cement EBITDA margin.

[indiscernible] posted like I said before by the end of the year was the final addition one with a bucket.

Okay, very good. Manuel Ferreyros Peña: Can you repeat the third question, sorry, the third part of the question?

Yes, of course. Do you have – would you be able to provide any leverage guidance for year-end? Manuel Ferreyros Peña: Yes, we should be in and around 1.9 times.

Okay, that’s good. Thank you very much. Manuel Ferreyros Peña: Okay.

And there appears to be no further questions at this time. I’d be happy to return the call over to our host for any concluding remarks.

Thank you, and thank you, everybody. Thank you, everybody, for joining. I think we had a very good quarter. We are – we have to say extremely optimistic about the future, we have our brand new government coming in, focusing a bit minor spending for business for years very, very clear and reminds, we have a [indiscernible] just appointed last week. And they all agree that infrastructure should be the main driving force of economy in coming years. That is a gate, I think, we’re up for very interesting run in cement in the coming years. I think Piura will be put to test with this increased demand. But I think we’re very comfort for what’s going to come for our company in the coming three to five years. Once again, if you have any question, Claudia, Manuel, and myself are always available. And once again, thank you for joining the call.

This does conclude today’s Cementos Pacasmayo second quarter 2016 results conference call. You may now disconnect your lines and everyone have a great day.