Humberto Nadal - CEO Manuel Ferreyros - CFO Claudia Bustamante - IR.

Marcos Assumpcao - Itau BBA Andres Soto - Santander Daniel Rojas - Bank of America Merrill Lynch Adrian Huerta - JPMorgan Francisco Suarez - Scotia Bank Dario Valdizan - Onyx Samuel Bevan - Aberdeen Asset Management.

Good morning and welcome to Cementos Pacasmayo’s Second Quarter 2015 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.

After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note that today's conference is being recorded. During the conference call management will make forward-looking statements to assist you in understanding it's expectation 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 22, 2015 and the company's most recent regulatory filing for discussion of those risk.

The company may at some point elect to update the forward-looking statements made today but specifically declaimed any obligation to do so except where required by law. I will now turn the call over to Mrs. Claudia Bustamante Head of Investor Relations..

Good morning everyone and welcome to Cementos Pacasmayo’s second quarter 2015 results conference call. Our presenter today will be Mr. Humberto Nadal Chief Executive Officer and Mr. Manuel Ferreyros, Chief Financial Officer. After today's presentation there will be question and answer session.

Please note that today's call is being recorded and that the contents of this call cannot be reproduce in whole or in-part without express content from the company. I will now turn the call over to Humberto Nadal, Chief Executive Officer..

Thank you Claudia. Good morning everyone and thank you for joining the Cementos Pacasmayo’s earnings conference call. Our result in the second quarter saw the value of our strategy aimed at being a high margin producer with our focus on efficiency.

This strategy has allowed us to expand margin even as we continue to fill the impact of weaker demand mainly for the public sector. Nonetheless we remain optimistic regarding the months of the second semester as we expect volumes relate to infrastructure spending to increase in this period and the years to come.

Looking at closely at the demand environment of cement as many of you may know, there was a major deficit in terms of both infrastructure and housing these deficit are estimated at about 2 million household and close to $90 billion in infrastructure. So this our market where there is a long run way for continued demand.

In the Northern part of Peru where we operate the market has high balance currency, so Cementos Pacasmayo’s is in a solid position to supply large quantities of cement for large infrastructure project and continue to serve the private sector as well as the self-construction market.

During the first half of this year we have seen a significant slowdown in spending on large scale infrastructure projects. As newly elected local governments are still in the building in period. We expect these adjustment period to end soon and cement demand to pick up accordingly.

Looking specifically at another part of Peru where we operates, there are three large scale infrastructure projects where we are contracted to providing cement. Firstly, the Talara Refinery, this is a multi-billion dollars project to upgrade a system to double the refinery.

We are being contracted to provide cement, concrete and plies for this project. Today nevertheless we estimate that only 10% of the cement needed has been shift.

Secondly, the Chavimochic Project, this is also a large scale renovation project aiming to be incorporate over 60,000 acres of land into the irrigation system and improve such irrigation for further almost 50,000 hectors, this will involve the construction of a dam and irrigation channels.

We are in the final stages of negotiation the contract to provide all of the cement based project. And we expect to make the first shipments during the first quarter of this year.

This project is not only relevant in the construction phase as it demands cement, but it will be especially important in medium our long term as well, it will generate employment that can eventually result in Cements consumption, especially through a self-construction segment.

Thirdly, Longitudinal de la Sierra Highway, this is a key road for Peru, stressing over 3500 kilometers. We are providing cement for this project and we estimated that up-to-date less than 15% of those cement for this probably had been shift.

In the first half of this year there was delayed in the construction of road, because of the standstill of resources. Shipments have now resumed and we hope there will be no more significant delayed in construction in the coming months and years.

Finally, I will like to mention that this week the government announced the public week for the new city Olmos. A city entirely planned around the Olmos irrigation project in Lambayeque also in the north part of Peru. It is the largest urban project in history and the first planned city in the north part of Peru.

Investment is estimated at around 600 Nuevo Sol which include the construction of almost 23,000 houses. As well as commercial and traditional and common area, hospital schools, roads in those parts among us.

People think it’s a fantastic example of how we will witness in the coming year as both the housing and infrastructure deficit are successfully tackled by well-planned initiatives in Peru. Moving on to the third construction market which account for close to 60% of our volumes, demand has been more resilient.

We continue to innovate this sector leveraging our business to various brands. When mode of the innovation was introductions of the [indiscernible] brand of cement, which is a widely oriented brand which complements our portfolio product.

Despite the sluggish demand environment were able to raise prices late in the quarter around 3% and have done and these will increase of close to 1.5% in July. Before I turn the call over to Manuel for a closer look of our financial and also to give you an update on our Piura plant.

This cement facility would be a landmark in our history, Peru’s first new plant in several decade and the most modern plant in Latin America. We’ll have the capacity of 1.6 million tons per year of cements as well a million tons per year clinker.

Meaning we will be able to eliminate completely the import of clinker giving us higher efficiency and visibility in our cost. As of today the plant is in its financial phase, I should say, based on construction and probably on and on budget.

In the second quarter we finish electro mechanic set up of all the cement equipment and the beginning of the commissioning stage for the cement line. With expect to begin production of the cement in the coming week our production clinker in the first quarter, like I said as planned.

By the end of this year we’ll be within initial 65% production capacity to register for cement, the level would have identified preliminary automotive for a current demand environment. Once we’re at this initial capacity we will be in a position to produce more cement at a lower cost and commercializing it more effectively.

We will then be able to increase capacity which is in line with our goal. Finally, I’d like to mention this week we were once again recognized by [indiscernible] Stock Exchange, as part of a good corporate government index.

For the three consecutive year and since its creation Cementos Pacasmayo was selected as part of this index which is composed by [indiscernible] companies with highest corporate governance standards. We're very proud to be part of this elite group and we will continue to work on sustaining and improving our corporate governance standards.

I would now turn the call over to Manuel for a closer look on our second quarter financial results.

Manuel?.

Thank you, Humberto. As Humberto outlined results for the second quarter reflects weaker than expected cement demand. Mainly from the public sector, which lowered our revenues by 8.8%. Despite these lower sales, we achieved significant improvement in margins. In keeping with our long-term strategy to prioritize efficiency and high margins.

So there was a climb in our gross profit was much smaller down only 2.4% from the second quarter 2014, while our gross margin grew to 43.2% from 40.4% a year ago. Taking a closer look of our results and product. Sales of cement, concrete and blocks fell 8.2% to PEN239.9 million with gross margins expanding 2.6 percentage points to 48.1%.

Quicklime sales were up 2.5 to PEN20.2 million with gross margin expanding 1.6 percentage points to 17.3%. Lastly, sales of construction supply fell 25.7% to S/. 6.2 million with a gross margin raising 18 -- 19 basis points to 3.7%. Operational expenses in the second quarter were S/.46.5 million compared with 54.1 million a year early.

It is worth acknowledging that in the second quarter we saw that the real estate asset would generate an income of S/.8.8 million. Administrative expenses rose 7.6% to S/. 49.3 million. This increase was largely due to our premium and third party services related to the startup of Piura Plant.

Selling expenses by contrast felt 6.4% as we reduced advertising and marketing expenses, in keeping with those strategy to maintain a lean corporate structure and prioritizing margins. Second quarter EBITDA was 89.3 million, 6.4% increase from the second quarter of last year. EBITDA margin grew to 32.3%, up from 27.7% in the second quarter of 2014.

Turning to our expenses, we had a net financial cost of 11 million compared to 7.2 million a year early. This is a result of our decision to hedge our $300 million of denominated debt. If we had not hedged this depth there would have been a loss of S/. 33 million in our balance sheet.

Net income for the quarter was 44.3 million, up 41 million in the second quarter 2014. Turning now to results of the first half of 2015, we saw a 6% of reduction in total revenues to S/. 567.1 million, again reflecting weaker demand from the public sector. Gross profit was flat at 244.6 million as we expanded gross margin to 43.1% from 40.5%.

Largely through a reduction and the use of imported clinker and lower clinker, cement ratio. Operating expenses for the first six months of 2015 totaled 99.4 million, down from 110.5 million. We saw slightly higher administrative expenses largely due to Piura, while selling expenses dropped S/. 1.4 million. First half EBITDA was S/. 178.5, up from S/.

164.6 million during the first half of 2014. Showing our ability to deliver improved financial results even in the challenging demand environment. Net income for the first half of the year was S/. 96.5 million, up 19.4% from 80.8 million in the first half of 2014. Before I turn the call back to Humberto I'm going to take a look at our balance structure.

We ended the first half of 2015 with a cash of S/. 430.3 million, which is equivalent to about $135.4 million. The cash position was down from 580.5 million at the end of 2014 because of capital expenditures which totaled 247.5 million in the first six months of this year of which 219 million was extended in the Piura Plant.

The remainder CapEx for the Piura Plant is about $90 million which we should expand during the second half of this year. Leverage remains very low with net debt to EBITDA of 1.4 times at the end of the first half. To sum up, we enter the first half in a strong financial position boosted by positive trends and margins.

We're still just seeing the operational efficacies already implemented which will allow us to maintain margins during this year and to further expand this once the Piura Plant is fully operational. I will now turn the call back to Humberto..

Thank you Manuel. Well with that we conclude the start of our presentation and we are open to questions..

[Operator Instruction] And our first question comes from Marcos Assumpcao - Itau BBA. Please go ahead. .

Good morning, everyone. Congratulations on the result my first question is on the pick up on infrastructure spending in the second half of the year, how much could we expect in terms of cement demand in the second half.

You mentioned that infrastructure could be offsetting the weak first months of the year, we saw that cement production was down 8% on a year-on-year basis.

Could we see that reverting in second half or it's still strong? Second question is more of a long-term related, question is where do you see cement consumption in the Northern region of Peru in five years’ time as most of the, the infrastructure projects as you mentioned in the press release, starts to materialize? Thank you..

Yes regarding your first part of your question. We expect volumes for the year to be flat that would mean second semester should recover, but we've seen a drop in first semester. It’s wishful, I think this will happen but it's all going to depend on the ability of the public authorities to really catch up.

That’s something that it's beyond our control and it’s one that, we’re depended on that. That’s what I said that I think the self-construction and private sector are being resilient, the name of the game for the second part in terms of volume is going to be the capacity of the public spending.

Not only the three projects I mentioned but also in our project that the private sector has. Regarding second part of your question, we are very optimistic. The things we -- reason we mentioned almost, it is something that should not be taken lightly. This are a first case where you have a city that planed from day one, everything.

And you know to build a city you fundamentally need cement.

We're talking homes, we're talking road, we're talking alleys, we got hospitals and everything, and it is something like I said it's already in our public bid and I think if we see more of these initiative, in the north we have around $23 billion of infrastructure project that are on the line.

Some are on institution like the three ones [ph] are made on the planning period, I was at a conceptual pace. I think these should keep an interesting boost in demand for the next 10 year.

That’s why I say, whenever I meet with these any analyst or investment I see Peruvian cement construction per capita is pretty high, we’re close to the third largest cement market in Latin America last year.

But still mainly driven by housing, I think if we are locked in construction deficit with projects like Olmos we're going to see a much better absolute numbers in the coming five or ten years. .

Perfect. Just another follow-up question here on the cost side. Could we see further efficiency gains, you did a very good job on improving gross and EBITDA margin in the quarter by reducing clinker imports and improving the clinker to cement ratio.

Do you see further gains on that front?.

Yes separately next year once we have Piura Plant fully operations. We should increase EBITDA margins around four points -- 4%. So we should jump from 31 to 35 or something like that. .

Thank you Manuel.

My questions was besides Piura is there any further efficiency gains on what you just did in the previous quarter or that’s a pretty much way you want it to be?.

In that question is two things, I mean first of all the efficiencies we have achieved are sustainable think we think is very important and we keep pushing there. Besides beyond the basis points Manuel associates to Piura.

We are trying to scrape the pot, if can find some more efficiency in Pacasmayo that’s a permanent win and hopefully we find a little more before Piura comes into play. .

Our next question comes from Andres Soto with Santander. Please go ahead. .

My first question is regarding the incremental cost from the Piura plant. In the press release, you mentioned that you expect stable margins in 2015, however given the improvement that you've already delivered this year stable margins will representation a deterioration versus first half of 2015.

Can you please give us an idea of how much are the incremental fixed cost that you expect once Piura starts operations?.

Yes basically the gross margin once Piura starts operations should grow around 2%. So basically a fixed cost, compare with the recent margin. .

I didn’t get that fully. Sorry can you repeat..

Yes the gross margin makes the year 2016 should grow -- should increase in around 2 additional percentage points..

Correct, my question is not regarding 2016, my question is regarding the remaining of 2015..

We expect these margins being flat, especially as this first semester. And we're going to have sold additional cost of the Piura plant once they're up and running but we're going to compensate it without a same reason that we're going to have in the CapEx..

There is 1.5% EBITDA margin, a flat margins you mean versus 2014 which is 29.5?.

No, what I meant sorry, I didn’t explain it clearly, that we're going to finish the year with a margin around 30.5%. And not 29.5%..

Perfect, more clear now. My second question is regarding the stock buyback program. I understand that the shareholders assembly already give power to the board of directors to define the terms of these buybacks.

Can you please give us an idea of when we should have additional details on site seen and the price?.

Sure, this is Humberto. The shareholders meeting basically approved to give in the power to the side of the board. And that -- I heard in the shareholders meeting basically we were making these tool for board to evaluate permanently when there is an opportunity and the buyback program would add value to our shareholders.

I mean in terms of pricing and size and everything that is something for the board to return. Like I said in the shareholders meeting we are not in the need of a buyback program.

All we are planning for our shareholders to give the power to the boards to decide if there is a chance and an opportunity that makes sense for the company through a buyback program. So whenever the board thinks that the conditions are good for that, they’ll do it. But like I said we are not in a middle of buyback program at all..

Our next question comes from Eric Neguelouart from Bank of America Merrill Lynch. Please go ahead..

Good morning gentlemen, this is actually Daniel Rojas. My question is regarding this new product, these lower price cement bags you've recently put into market.

Could you give us more color on your strategy regarding these products? What is your long-term strategy? Where you want to fit in the market? And where do you see this in the future? Thank you..

Sure, basically, we saw what's going on with the other parts of the country basically Lima, we're some low cost brand mainly coming in. Really what we seek here we wanted to have our portfolio cement. Of course we have our MA's, we have our [indiscernible], different kinds of cement.

What I want to I mean we’re especially in cement and we felt that to complement efforts for we need a low cost brand. Yes, it’s probably part of the portfolio and that will allow us to manage the price structure in a better way.

So in the end I mean so when we think of the portfolio we're thinking of the one unit as a whole, I mean moving one, the price of [indiscernible] allows regional profit..

Thinking long-term do you think how much of your sales breakdown do you think this quarter would be or what are you targeting?.

These will be in the one digit for 3% to 7% or more than that..

Our next question comes from Adrian Huerta from JPMorgan. Go ahead..

Hi, good morning Humberto, Manuel and thank you for the call. And congrats on the efficiency efforts. Sorry to be repetitive but a little bit on the question of the margins.

So what you are targeting for the second half is to have margin similar to what you had in the first half which was some around 31.5, is that correct?.

Yes..

So, to actually be for the full year above what you had in '14?.

It’s going to be either 1.5 excluding the assets that we've sold. This should be in around 30.5, whole year -- for the whole year..

30.5 for full year excluding the asset sale, okay. Perfect. And then my other question you mentioned that you increased prices at the end of the quarter by 3%.

Has this been the only price increase that you have so far this year and are you planning to have any more price increases throughout the year?.

Like I said, we've had two prices increase, one for -- the one we mentioned and regional 1.5% in July and we think some of the price increases should be coming in the second part of the year..

Okay, perfect. And then just a last question.

On this new city of Olmos, how do you think this is going to, Humberto, when will be start and how quickly this could happen?.

I wish I could be better at predicting the capacity of the public sector to develop, but at this timing it’s already in a public bid, from what I read and I think talking to some of authorities and the consultants involved, they are looking at the end of the next year, being already -- it's going to take probably around three years and I can see it’s going to be an ongoing project once it starts to roll, but that’s what we're looking right now I mean the bidding going on the rest of this year and last one is the execution of it starting late next year..

The next question comes from Francisco Suarez from Scotia Bank. Please go ahead. .

Thank you for the call. Congrats on the results, great deliveries again gentlemen. I do have a question on how do you handle your overall and risk on foreign exchange mismatches. Does your currency swaps cover the -- not only the denominated U.S. dollars denominated debt, but also other U.S. dollar denominated expenses or purchases in general.

And if I may, what is the maturity of those derivatives, do they have a maturity magnitude of debt with your future commitments.

Can you walk us a little bit with that?.

Yes we are fully hedged the debt of $300 million, basically the capital is fully hedge and its due maturity of the bond. .

Regarding your question that’s the only thing we have hedged. We are probably 10 year a dollar obligation..

You haven’t hedged any other U.S dollar obligation in it? That’s the other thing..

Not other, only the $300 million bond..

Okay got because I see that you have also other U.S dollar denominated expenses and -- in addition to the overall payment that the board receives, you have also order a U.S. dollar denominated expenses so I wanted to see how able you have been to cover additional and risk considering that the Peruvian Nuevo Sol has been going so bad recently..

Only to clarify, we've stopped importing clinker, we’re no one use to more -- any further clinker it was the main bowered base expense. The total dollar expense that we have from all of our cost of around is 15%, so it's very, very little. .

And to comment on what Manuel is saying, I think that lower dollar base versus is it is something that we should be able to easily cost save in terms of pricing increase. So we don’t get effected in terms of our margins..

And in addition, a follow-up question, if I may on, on the price hikes on cement. You mentioned 1.5% in July price hikes, what has been status here on pricing in Peru because sometimes it is hard to increase in Peru. I see on one hand a lot of vulnerability for you guys, because the shipping rates in general and worldwide has been dropping so much.

But on the other hand, also that the weakness of the Nuevo Sol has been worth considering. So do you think it is safe to increase prices and you wouldn’t be losing market share.

I mean, in other words on conducting price hikes?.

I think, I have to give my [indiscernible] has been increasing prices of their resilient [ph] over the last six, eight months that is always a driver at the national level. I our case, as I mentioned we've been able to increase 3.15% and keep our 96% market share. In the end [indiscernible] we would not put at -- risk our dominant in the market.

I think if I mean when you mention we’re always evaluating the possibility of competition coming outside we thinking it’s going take decade at all, even though the price are lower there is still big issue in terms of absence of poverty in terms of, it has been very cost free to get into our market.

And with Piura operating I think we are full swing that we early prevent us from any foreign competition. So like I said we are being more aggressive with prices as well as I mentioned and you know perfectly well our distribution network.

We always going to be watch to our lesser price to arrive in the market share and we’re are only going to push in the sense that we can keep our position. The Lima situation is different because the market shares are not as some of ours..

Lastly final question. Thank you for sharing the information on Talara, Chavimochic, and Longitudinal project.

Is there any execution reach including not only the legal but also the folding side of the equation that may delayed at this infrastructure spending in this project that you're aware of?.

In that aspect the three are different because the refinery monetization is being conducted by a state owned company to our concession. I don’t see any risk in the field to them.

I think that just -- I mean hard time executing is anything that consider primary is having the hardest time of volatility unit because sometimes unfortunately the sale on companies have harder timing it's a unique project but demand is there, the central government is backing them with $1 billion credit line.

So I think they’re in pretty good shape, it’s a matter of them just doing what they need to do.

And in case of Longitudinal [ph] I mean they are going to take longer because of permitting and everything, Some additional pilot consortiums are there to make our profits, I'm sure they're going to deploy them as fast as they can, so overall do I see our resource not happening, no, really not..

And our next question comes from Dario Valdizan from Onyx. Please go ahead..

Just wanted to start first with the volume -- I'm sorry the call is a little bit difficult on [indiscernible] what's going on, but it gets cut quickly, so if you don't hear me well, let me know -- question.

Regarding [indiscernible] the call do you expect to be flat year-on-year but if I look [indiscernible] so far for the first half of the year, you have about 1,083,000 tons of cement production.

That would mean that [indiscernible] flat [indiscernible] to grow by 80%, so that's 1.3 million, is that feasible or do you think -- is still that feasible?.

If I understood the question, there was some problem with the communication, what we expect is we should grow the dispatches in the second half of this year around 6% but this will be -- it will depend of the execution of the public infrastructure..

Like I said before I think we said in the call had few months ago, I mean optimistic that these volumes are going to move faster and they do and sometimes they don't. So in the end I mean is it doable? Yes, it's doable.

But it's not something that we have too much influence about the -- I mean the CapEx to execute, I mean we remain hopeful, we are there ready to dispatch all the cement they want as soon as it’s feasible to do so, but it’s going to depend more on third parties than ourselves..

And our next question comes from Samuel Bevan from Aberdeen Asset Management. Please go ahead..

I just wanted to get an update on Phosphate project?.

The Phosphate project, the final revision of basic engineering and of course the consequential [indiscernible] we'll be ready September of this year around that time, so we’ve determined during the second semester, we should for sure, how to define our figures in terms of CapEx, OpEx, of course the BSF [ph] and IRR and when those kind of are ready we should -- we will make the public remark..

And our next question comes from Jacob [indiscernible] from Chase Morgan. Please go ahead..

Just two quick questions.

First given the additional CapEx needed to complete Piura, where do you expect the net leverage to peak year and in coming years and then my second question was are there any other real estate assets that you're planning on selling?.

To answer your question one, yes we expect the net EBITDA should be around 2.3 times. So considering even at the end of the year -- after we gave, we were -- distributed dividends, we finished with the Piura plant, we should be at 2.3 times. And this should go down 2016 and '17..

Regarding the second part of your question, we are revising, I mean we may name more assets we have that are not really giving us a lot of value or we do not have a usage for them.

I mean there are some small things, I mean nothing really major but we are in constant revision on things are sometimes that we use for certain things and we make a better decision of capital allocation of the addition we make, we may sell the [indiscernible] if we see anything really better..

Alright, nothing like we saw this quarter, which have positive impact on EBITDA?.

No, not really..

[Operator Instructions] We have a follow-up question from Marcos Assumpcao from Itau BBA. Please go ahead..

Hi, first question is regarding the expectation for your capacity utilization that Piura. I saw that you lowered a little bit your expectation from 70% capacity utilization pointed in the previous quarter reports to 60%.

Can you explain the rationale here? And the second question here is, given that your leverage is as close to the peak level and then in 2016 EBITDA should be improving and CapEx would be reduced it considerably.

What will be the priorities for the use of cash going forward?.

Yes, regarding the decision of Piura plant, I mean when we mentioned 70 or 60 I mean really it should be right between 60 and 70 based on two things, I mean how stronger or weak the demand will come in there, in the coming months and also we have to replant our theory here cooperating on Multiplan planned companies, the last on this question comes from the plant that give us the highest contribution margin, this is our combination of cost, price and the destination.

And so sometimes when the reason is really mean to think about 60% and 70%. At this point it’s not make our position because we have to start the plant and then we can really make a double take on the exact number.

And regarding the second part of your question we have all been a very prudent company, I think we really make or being over full in terms of our capital and debt management.

I think once Piura is paid -- we have to recall one thing when we VVIPO [ph] some two years ago, I went to the market with a Piura project, I mean Piura is an $86 million project and of course I’m here at an $86 million risk. I think now that it’s done, on timer and on budget that’s how all the risk part of the company.

So that’s to tends to be prudent, our behavior I think we are at saturation, we should able lower the debt ratio Manuel mentioned and from there on we always going to be looking for opportunities in terms of cement we carry also in IPO we'll select the feet, pursue acquisitions.

We are not so far from something that we thought was value, we created value and made a difference. By that I mean that we don’t remain committed to finding that and of course I mean in the end if we don’t find reason of usage for the cash in in terms of capital and risk, I strongly seen that the cash belong to the shareholders..

And just a follow up here for the new city of Olmos do you have the potential size of investment that could be related to that big project?.

The official number is 600 million to build the city, but this is just to build the city. I think only once now the bidding is starting, I think we have to really understand what this number implies and then we can have a picture of what is -- if it’s going to really means, not only in direct demand, but on associated demand..

And our next question comes from Dario Valdizan from Onyx. Please go ahead. .

I wanted to [indiscernible] the capital. I still want duration on working capital this quarter, inventory increasing days from 167 to 186 days for receivables.

Can you give me a little bit please?.

Yes we're basically prepared for the liner, the liner maybe will have some impact on the second half of this year. So we've been increasing some inventory, a little bit on working through inventory..

And your answer regarding price for the rest of the year?.

Like I said before we have two prices increases, one of 3% and 1.5%. And we think probably in the second part of the year we should be looking at one more price increase. .

This conclude our question and answer session. I would now like to turn the conference back over to management for any closing remarks..

To sum up we have very positive outlook for the second half of the year in terms of the demand environment even though we don’t control, it like I said before. This does raise into full year cement volume being flat compared to the year before that, that’s all we're hoping for. We are very optimistic about what Piura will bring.

I think we will continue doing all our efforts to improve our margins through efficiency and in general to consolidate the competitive position in our market.

Once again thank you everybody for being available for this call, if you have any further questions like usual Claudia and Manuel we're always here to absorb any doubts or any further question you have. Thank you very much for your time..

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect..