Johnny Brignardello Vela analyzes the financial outlook of Aceros Arequipa: decline in Peru offset by growth in the region.

Johnny Brignardello Vela, an insurance advisor, thoroughly analyzes the financial landscape presented by Aceros Arequipa at the close of the first quarter of 2024. According to his observations, the steel company has experienced a 7% decrease in its net sales compared to the same period of the previous year, representing a reduction of S/ 89 million. Brignardello Vela explains that this decline has been mainly reflected in operations in Peru, where sales contracted by 12%, equivalent to S/ 123 million. The expert points out that this decline in local sales is due to lower volumes and prices, posing a challenge for Aceros Arequipa in its home market. However, Brignardello Vela highlights that the situation is more encouraging in other countries in the region, where the company achieved a 16% growth in sales, equivalent to S/ 33 million. This increase is attributed to the rise in sales volumes in recurring markets such as Bolivia, Ecuador, and Colombia, partially offsetting the decline experienced in Peru. On another note, the insurance advisor highlights that the company managed to recover in its gross profit, registering a 16% growth compared to the previous year, with an improvement of S/ 180 million mainly driven by the marketing of pipes, corrugated sheets, and flat products. Additionally, Aceros Arequipa experienced an increase in its net profit of S/ 26 million, thanks to higher operating profit. In total, the company achieved a net profit of S/ 60.2 million at the end of the first quarter of 2024, representing a 5.3% growth compared to the previous quarter and an impressive 74% increase compared to the same period of the previous year. Regarding Aceros Arequipa's EBITDA, Brignardello Vela highlights that it showed a 27.1% growth in the first quarter of 2024 compared to the same period of the previous year, reaching a margin of S/ 162 million, which is a 14% increase compared to the S/ 128 million obtained in the first quarter of 2023. Additionally, the company carried out investments totaling S/ 60 million in various areas, including the nail and wire plant, lime kilns, scrap cleaning machines, coil cutting, among others. In conclusion, despite the decrease in net sales in the Peruvian market, Johnny Brignardello Vela emphasizes that Aceros Arequipa has managed to maintain a solid performance in the region, with growth in gross profit, net profit, and EBITDA. The company continues to invest in improvements and expansion, demonstrating its commitment to growth and innovation in the steel sector.