Earnings Call: Q1 2023

May 10, 2023

Good morning to everyone joining us through the different channels. I am Gonzalo Velásquez, Communications Lead in Celsia, and I would like to welcome all of you to the first quarter results. Today, we are joined by Ricardo Sierra and Esteban Piedrahíta, directors of the company. At this moment, everyone is in listening mode, and at the end of the conference, we will have a Q&A. There is a Q&A box available on Zoom. We are also live streaming through Twitter Spaces. We had some technical issues at the beginning, but now everything is solved. Welcome everyone joining us through Twitter. This webinar has simultaneous interpretation from Spanish to English. If you are using a computer, you can select the language, and you can click in the interpretation button on the Zoom toolbar. You can also do so in your mobile phone. In both cases, if you do not wish to hear the background audio, you can click Mute Original Audio. Thank you. Ricardo, it is all yours. Take it away. Thank you, Gonzalo, and everyone. We are sorry for the delay in the start. There were a couple of technical issues here. We had to set up the Twitter Space, but everything is working now, I am being told. Okay, let us continue. Today we will be talking a little bit about the first quarter of this year, and we will also be talking about the several sales of assets in Central America. We will be summarizing about these assets. First of all, in 2014, trying to diversify and risk and currency, we acquired GDF Suez, Dos Mares, and PG, which is the wind power plant in Costa Rica. This cost, the equity that we put up was COP 424 billion in 2014. This is what we call the tip of the spear to internationalize the company. We know that in the case of PG, we had a reversal of the assets to the ICE in 2028. This means it is like a bond. Also, in Dos Mares, the hydraulic plant in Costa Rica, the contract was going to expire in 2023, which implied that it would change to sales in the spot market. The other asset that we had was Bahía Las Minas, BLM, and we had the challenge of transforming it technologically and financially. However, this was really difficult. It was a coal plant, and you know that this is being decommissioned. Throughout all these years, due to the energetic mix in Panama, this ended up in the liquidation process in 2021. We had BLM as a partner. We had the Panama government with the 50%. We have 8 years of presence in the region. That does not finish with this operation. This is very important. This is a decision not to go away from Central America, but to stay in Central America with other type of operation. Let us look at the summary of what we achieved during these years. We acquired Dos Mares, with an annual generation of around 350 gigawatts per year. In 2021, we achieved 500 gigawatts hour year, and if we had not had the El Niño phenomenon in September that year, we would have closed with a generation between 500 and 550 gigawatts hour. This means, from the operational perspective, we achieved an improvement in operation of 50%, which is marvelous. We also managed to jump into the B2B in Panama, which is basically innovation. There is practically no B2B in Panama. We signed 32 contracts with big customers. Additionally, we started to build a solar portfolio in Panama with two plants that add up to 19.7 megawatts, and we also built what we call a portfolio in new businesses. Currently, we have, and this is within the company, 34 megawatts of solar power systems between Panama and Honduras. By the end of the year, we will almost double that figure. We will reach 55 megawatts, and we want to reach 200 megawatts in the coming 2 years. All of this was achieved without deploying additional equity on behalf of Celsia, more than the COP 424 billion that we initially gave in 2014. In spite of achieving the plan, there were several factors that had an impact on profitability on the invested capital of this acquired assets that initially sat at 600 points under the ROCE of Colombia. Among them, the lower energy prices, this is what had the biggest impact in the projection and profitability. The lower prices in energy, and with the coming of liquefied gas in the generation, because this basically reduced the price of energy for the spot. The terms of the PPAs, and the lack of long-term bidding that didn't allow us to hire the assets given the existence of signed contracts, but that hadn't been executed due to the plants that the Panama government never canceled. All of this made it that our profitability scenarios were lower. In spite of the operational improvements, this was an asset that wasn't profitable. We didn't sell the assets. We not only have the situation, but having that invested capital in that plant is a cost of opportunity that's very high. Which is why several months ago, we start this transaction. We start more or less a year ago. We decided to turn around this asset and transform it into other things. Let's look into how is it that we can perfect this sale, and how is it that we're going to achieve important changes in the consolidated financial results in Celsia. First, the perceived value of the sales is going to be $194 million, so around COP 933 billion. This will strengthen the liquidity of Celsia S.A., and the cash that will be received from this transaction will represent practically 30% of the capitalization of the market of the company, considering the price in the market value yesterday, in the stock market yesterday. This is astonishing. Unfortunately, this price doesn't really reflect the reality, and you can look at the cash flow that we would have in a couple of months. Additionally to these resources, we can reduce indebtedness, the company in $198 million and reaching a value of COP 4.78 trillion. Sorry, trillion pesos. A net leverage of 2.93 times the EBITDA. This is going to be 2.14, what we were discussing. So it's going to be a value that is going to be extremely good this year. We're having practically COP 933 billion in cash for the company, and additionally, it will allow us to lower almost $200 million the debt. The sale was performed in the high multiple range, considering that the assets don't have long-term contracts and the BOT of PG in 2028. The multiple that was calculated for the EBITDA with the normalized EBITDA is 11.5 times. This means that we will improve the ROCE consolidated of Celsia in 400 basis points, overcoming or being above 18%. This means that the invested capital is being really profitable. Finally, I would like to highlight our strategy in the region and what assets we will have in the region. Several shareholders were asking about this. We will have a thermal asset in Colón of 154 megawatts. It has a strategic location. We have a very valuable asset, which is the Bahía Las Minas substation. We hope that in the future, we will develop options with the technological conversion and see what kind of work can we do with that plant to see if in the future, we might make that plant improve new technology and participate in new biddings that the Panama government will be doing in coming months. Additionally, we will have a project in Costa Rica that we were developing in a land next to the wind power plant. This is a project that has what in Costa Rica is called eligible. This means that it can become part of a bidding, and we have 60 megawatts, in the eolic projects where we can participate. We are structuring that project. Additionally, as I was telling you, today, we have 34 megawatts with solar panels. We are building additional 21 megawatts. With the pipeline that we have in Honduras and Panama, very strong in Honduras, in 2 years, we will reach around 200 megawatts. Before we continue with that perspective, Esteban is going to tell us about the profitability of the business and how is the closure of the books and a little bit what we are going to see. As you know, we have to pay a lot of attention to this. Esteban, go ahead. Thank you, Ricardo. First of all, I would like to greet and welcome everyone joining us. First, I would like to mention an important detail that we have with EnfraGen, it implies a fixed price with the assets and the benefits and risk for 2023 will run on behalf of the buyer. This means that for 2022, when we reclassify the assets in passive, available for sale. By the end of 2022, the assets minus the passes added up to COP 1.8 billion, and the difference in the ORI is COP 884 billion, with which we will receive around COP 933 billion, closing with the rate of 2022, the net countable profitability or utility would be around COP 17 billion. These figures will depend on the fluctuation of the representative, market, trade exchange rate. I would like to start with the figure that Ricardo was giving, which is how much did we invest. We invest COP 424 billion in 2014. We are receiving now COP 933 billion in cash after reducing the debt, as we were mentioning. We are continuing investments that were built with this, that is around COP 127 billion. That correspond to what Ricardo was mentioning, our investment in solar power in Honduras, eligibility in Costa Rica and so on. This would give us that profitability from December 2014 to the closure of those assets was around 12.9%. Thank you, Esteban. I would like to add another input, which is the multiple of the transaction of the sale. The EBITDA for 2023 that was expected was around $33 million, which represents a multiple in EV/EBITDA of 11.5 times. This is a multiple that is really within the higher range of percentages. Now, considering everything, the investment in these assets makes all the sense for the company, and this will make that the growth abroad will be under platforms, just like what we do in Colombia. We will be focusing in the non-regulated market with solar power. We have already determined that for the next three years, we will multiply almost four times the capacity in Central America, jumping from 55 MW to 200 MW. We will also assess projects in infrastructure, both in distribution as in transmission. One instance can be the fourth line in Panama or the participation in bidding in Costa Rica, for renewable generation. All of this with this platform concept that we have in Colombia. Additionally, business category, which is framing a broad concept of energetic efficiency in which we are emphasizing a lot, we are strengthening, and we want to work with our teams in Central America. Also, part of the resources that we will be receiving, we will be allocating into reacquisition of shares, reinforcing the message that the object was to do this without going into depth. This is a mandate from our shareholders that was decided during the recent assembly, and Santiago Arango will be talking about that. We will be giving estimates on when can we participate in the market. Now, let's jump to the positive results of the first quarter of 2023. The EBITDA was COP 514 billion, with a growth of 13% compared to the same period previous year. The net consolidated earning was COP 122 billion. That was affected in an important due to the increase in the financial costs, product of the increase in the index. We had new assets in infrastructure and generation. This means that the EBITDA, when considering the platform, reaches COP 605 billion, registering an increase of 22% compared to the same quarter of the previous year. When comparing, we are talking about COP 90 billion in the quarterly EBITDA platform. This means that this is becoming a very important business, which is almost 22% of the consolidated EBITDA. Caoba, which is the transmission platform, had a growth of 33.1% in income, 32.9% in EBITDA. This platform has an average of assets of 22.1 years, and today we have assets for COP 2.06 trillion. C2 Energía is growing significantly, and it went to COP 17 billion, so it's almost COP 14 billion in the EBITDA. We had an operation of 166 MW, and we are currently building 133 MW. Recently, commercial operations were declared, the Lanceros, the San Felipe, and we are about to declare five other plants to strengthen our presence in the market. This project give competitiveness to the companies. They generate a lot of local employment during construction, and they also avoid CO2 emissions. El Tesorito thermal platform gives all the backup to the non-renewable business, and this first quarter 2023, generated a EBITDA of around COP 35 billion. Laurel, the platform for solar energy of small scale, generated incomes for over COP 3 billion and an EBITDA of COP 1.4 billion. We are very proud about the results, and obviously, we are addressing all the risks, we are managing all the risks, that we can find in the country. Esteban, if you'd like, let's talk a little bit about the financial figures. As you know, the detailed analysis of the results, and for more financial information, you can look into the reports that you will find in the investors' website. The first quarter, the consolidated income added up to COP 1.5 trillion. The operations in Colombia reached incomes of COP 1.35 trillion, representing 90%, and Central America added COP 145 billion, adding 10%. In Colombia, the income were boosted by a generation for the charge of reliability due to the income to the operation of Tesorito. We also registered an increase in the income for use and connection in networks with a higher IPP and IPC. Here, I would like to make a comment that I think we've never done it, which is the platforms in Celsia Colombia represent all the platforms. Through the incomes, we will see the total incomes of the platforms, even when each platform will have its corresponding share. You will be seeing the total incomes from the platforms with that representation that Celsia Colombia has. In Central America, the incomes in dollars decreased 31% and 17% in pesos, compared to the same quarter the previous year. It's very important to mention the behavior of the income is mainly due to the combination of the contract of the Dos Mares complex, and this operation also meant that all the income is coming from the spot market sales. We also have the El Niño phenomenon. In sales cost, this reached COP 995 billion, so an increase in 30%, mainly due to the higher purchases of energy, the exchange rate, and also what I was mentioning previously, to the different platforms that Ricardo Sierra was mentioning. You can see the EBITDA sizes that they mentioned. The administrative costs reached COP 83 billion, 5.6%. This means 700 basis points below the inflation of the last 12 years. As Ricardo Sierra was mentioning, the EBITDA reached COP 514 billion. We registered a growth of 13%, led mainly by the positive contribution of all the businesses in Colombia. The EBITDA margin of the quarter was 34.1%. The individual Colombian EBITDA was COP 472 billion, and the Central American operation had COP 42 billion. This is the operational side of things, and as you can see, we had excellent results. Now, let's talk about what's below the operational line, and there are two points that we want to make. First, the net financial cost reached COP 222 billion, out of which 140% were financial, and this is increasing 140%, due mainly to the increase of the indexators in this last year, and the interest rates of the Banco de la República that has increased the line of the CPI. This is correlated to the readjustment of the income in the regular business. When we do the match between what the operational line growth with those index and what the index are growing in financial cost, we have a balance of almost net of those two figures. That's why we have this strategy. The income taxes were COP 64 billion in the quarter, and they were reduced 31.6%. We were able to mitigate the impact of the tax reform of last year, thanks that we've been incorporating the tax benefits. Thanks to the solar power plants that were started operating last year. We had a positive contribution of the different segments last year to a net profit of COP 122 billion, a reduction of 26.3% compared to the same period last year, due to the financial cost and to the effects of the Pacto por la Justicia Tarifaria in the income generation transmission distribution. The net profits of the owners of the controller were COP 75 billion. Now, the consolidated indebtedness was COP 5.7 trillion and a leverage of 2.89 times net debt to EBITDA. The half-life of the company is 5.6 years. We closed the cash with a consolidated cash around COP 382 billion. Compared to the first quarter, without considering those assets that will be de-invested, the main figures would be as follow, so that you can see the impact of this investment. The income would be COP 1.4 trillion. We will see a reduction of 5%. The EBITDA would be COP 476 billion, a reduction in 7%, and the financial cost would be COP 209 billion. That means 10%. The total indebtedness would be COP 4.78 trillion, and as Ricardo Sierra was mentioning, the leveraging of the net debt would be 2.93 times. With that, we will close the financial figures. Perfect, Esteban. Great, Esteban. Later we will be talking a little bit about the questions on that thing on how is it that things would be comparable and the picture after the sale. The operational results are still very positive, and they reflect the good rhythm that we have. The projects focused on clean energies, the development of new products, and energetic efficiency for customers start to become more important. The investment of assets in Central America will allow us to strengthen many aspects and to consolidate a strategy that will set us in a path for the future of the company. Now, jumping to the projects, we would like to tell you, in the first months of the year, we started the operation of seven solar power plants. Four of these, we will be providing energy to the national integrated systems. It's a total of 89 megawatts of renewable capacity. Before we finish, let's mention some things on the ESG side. On the Obras por Impuestos, we were able to finish a rural way, or we paved a rural road. So the investment closing COP 29.5 billion. This is wonderful for this part of the country in La Guajira. We built and we delivered to the community multiple platforms, and we hope that 180 kids from Uribia and their neighboring communities to come in. This is the second educational infrastructure work that we've done after the one in Kalalu. So this is a safe classroom with solar power, bathrooms, kitchens, and it's an area that is really beautiful, that was really well designed and painted. During this quarter, we handed out 24,000 scholar kits. Imagine 24,000 kids with their school kits, and this was in Tolima, Valle, Cauca, Córdoba, Santander, and the alliance between ReverdeC program and Grupo Éxito, they plant over 1 million trees. More than 270,000 clients made their donations in supermarkets, and we were able to achieve, but not only that, but go over the goal that we had, and recently we started the partnership with Public, and we will be restoring 30 hectares in the Otún River Basin in Risaralda. We hope to plant 100,000 native trees. So we're planting almost 3 million native trees a year. With internet business the company had the intention to connect all educational institutions in Barrancabermeja, Santo Lima for free. Up to date, we have connected 211 schools. This is incredible. 211 schools that have high-speed optic fiber internet. So this means 114,000 students from lower income. This is just the cherry on the cake, but it's important to mention because all of us who are part of Celsia enjoy from all of this, and we are committed to ESG. Now we can jump into the Q&A. Thank you very much. Thank you, Ricardo. Thank you, Esteban. Now we will be opening the space for questions. The people who are connected in Zoom, you can raise your hand. We are seeing some people with their hands raised, and we also have some questions in the Q&A box. We will be starting. We have our first question from Jose Hurtado. He's asking information on the estimated semestrial repurchase of shares in the Bolsa de Valores de Bogotá. Santiago and Esteban, if we can make a quick summary of this, of what we had in the shareholders meeting, what is it that we're doing, what are the expectations, and what's going on there? Yes, thank you. Good morning, everyone. I'm Santiago. Let's remember that in the past shareholders meeting, we had an approval of repurchase of shares, which will have two mechanisms. The first one is transactional, which is through the Bolsa de Valores de Colombia, and the other one is the independent mechanism, which is outside of this market. We are starting, and it's important to remember that we had a time where we couldn't start the process until we presented the results, which we did yesterday, and what we're doing today. Formally, as of today, we can start the formal corresponding process. We already started with the Bolsa de Valores de Colombia. We had sent a letter for the legal representation and what is going on. We need to coordinate with the stock market and then publish the information that is relevant. We also have to remember that this transactional amount cannot go outside of the minimum and maximum limit. This means this is a completely regulated mechanism and we cannot change the price. We are finishing with this, and we hope that in a couple of weeks we will have all the mechanism ready so that we can start with the transactional operation. After we have discussed it and structured with the board of directors, we will start with the independent mechanism. For Jose Hurtado, we are really eager to start that program. As we promised, we will be setting up communication channels for the transaction with the shareholders in general, so that you know how is it that we are approaching this, how is it that we are behaving with the market. We can continue. Thank you, Ricardo Sierra. There is a person with their hand raised, Roberto Paniagua. Roberto, go ahead. You can activate your mic. Good morning. Can you hear me? Yes, Roberto, we can hear. Good morning, Ricardo Sierra and everyone. Thank you for the results. The music in the beginning was really cool. A couple of brief questions. It was an excellent lecture. First, regarding the transaction in Central America, we have an EBITDA. I do not know if you have the figure of the purchase of EBITDA in 2014. The second one is in transaction Central America, can you remind me the MOIC of the transaction? This is the first thing. The second thing is something key that you have mentioned in the previous webinar with El Niño. If you can tell us a little bit on the strategy that you are going to be implementing to manage risks and also to have profitability in the markets. These are the two main things that I wanted to ask. I would like to know more on this. Thank you. Roberto, yes. Thank you for the comment on the music. Yes, I would like to tell you, Esteban Piedrahíta, you asked on something that we have not talked about the MOIC, which is the profitability over capital, right? As I understand it, in equity, it is just basically the total of money invested compared to the total of money that I receive. I will let Esteban Piedrahíta start with that, and then we will talk about the other thing. Sorry, give me a second. I was calculating the MOIC really quick here. Roberto, if my memory serves me right, but at that time, when we came to Central America, we had a multiple of around 9.5 times, 9.6 times the EBITDA, something like that. As Ricardo Sierra was mentioning, it was a really different thing. We had to do a combined multiple of the transaction at the time, but basically, we had the replication of the total. It is important to consider that, at that time, the price in Panama was around $180 watt in Panama. Nowadays, that price is around $70. So it is a significant structural change. The second thing is that the TIR, as we were discussing, we had a TIR of 12.5% considering the income into equity, because this is an equity transaction. As we were telling you, it was COP 400 billion that we invested, now we are getting COP 900 billion. Now we are having also with assets that are around COP 127 billion that was built with the same cash flow. So we have a TIR of 12.9. As we were estimating, this would give an order of 2.3 times when we add the COP 900 billion, so the assets, and if we divide it on the COP 424 billion, we are talking about 2.3 times the MOIC, which I will be writing down so that we will continue doing it in further occasions. Regarding El Niño phenomena, we are traumatized from 2015 and 2016. If you remember, there was a regulatory issue during that time when El Niño came, and it was linked to fuels that was not related to the fuels that was using in 2016, so it was extremely low price, and we were producing at an extremely high cost. This led to a financial crisis of the thermal sector that was corrected by adjusting to the real price that is used. This is now being regulated. What is the coverage here? First, we have done a very thorough exercise from our generation teams by estimating our generation capacity in a very critical scenario. Remember that to calculate the energies in Colombia, you need to take the historic, take the lowest or the most critical scenario, and then you calculate from there. From that perspective, the contract that we have is around 85%-90%, is we can say, of our ENFICC in what is coming up. But I believe, as Roberto Paniagua is mentioning, this El Niño phenomenon, we are seeing that the temperature of the ocean is setting a historic figure. We have never seen such a high temperature. So this is not an indicator that it is going to be strong or weak El Niño, but we have to prepare for the worst case scenario. So we have that coverage. We have other contracts and other structures that allows us to cover this. I am going to give you a detail, and Esteban Piedrahíta, please help me with this. The first is that we have a purchase options in Termoflores, of around $30 million that can be executed during times like this, where the prices can be critical. This is one coverage. Another coverage that we have, that for us is fundamental or structural, is the El Tesorito platform. As you can see, the EBITDA in the first quarter was an EBITDA of almost COP 34 billion. This is thanks to take high margin prices in stock. If there is no change in regulation, but we need to set up an alarm system here, because what we are getting from the ministry with the El Niño, with the dispatch of resources can generate a big dispersion. So hopefully, we will be patient with this. We will review the figures and take the best decisions because we do not know how El Niño is going to look like. So Tesorito provides a protection that is really robust in terms of expected results, so that we can compensate with any issues that might arise. Thank you, Ricardo, for your answer. Look, Roberto, and I thank you for the comment. The problem is that we do not have energy in this country. If you try to buy energy, no one is going to sell it because everyone is preparing for El Niño. You have to understand this, and here I would like to do some education. The prices in stock are going to rise because we need to save water for what is coming. We need to get the resources from the thermal part. When the stock prices are high, it is not that it is a speculation, no, it is that we are saving water because El Niño is coming at the end of this year and the beginning of the next year. This is something that is really important. Let us remember that the prices in stock only have an impact on 7.5% of the net tariff of Colombian receives. This means those headlines that are really scandalous, you need to really look into it. For El Bagre Tolima, we see a coverage of practically 100% in the generation contracts. Each trader has a special situation. In El Bagre Tolima, prices can really go up, but we have a management there and the energy has already been purchased. Also, if you can give me a view on those stock prices when El Niño comes, if you have anything to mention there. It is really difficult. Now, the price in scarcity is really low. This means that if the cost of energy goes over this, it is up to COP 1,200 per kilowatt in the most extreme scenario. But I would like to here do a PSA. We need to continue exploring gas, because look at the importance of Tesorito. Tesorito can produce energy between COP 300 and COP 400 per kilowatt. If we have to import gas, that multiplies the price three or four times. We need to continue with the exploration here so that we can continue with those prices and those rates. Thank you, Roberto. Next, we will have questions from Juan F. Pulgarín. Which new sources of income do you have you foreseen to replace those incomes that the companies that you were selling in Central America will do? Here, we are not forecasting an immediate replacement. We will have development projects, as we are telling you, with those solar projects. We will be participating in transmission lines and distribution assets and a lot of things in energetic efficiency. There is a bunch of things there. Now, the level of the works that we are doing outside of Colombia is to continue pursuing those businesses in an active manner. For instance, if we end up with a transmission line, these are very relevant. We're looking into those new platforms in which Celsia provides a part of the equity, and we bring investors so that we can continue with the expansion and growth. The other thing is that we'll not only be subscribing to countries like Panama and Honduras and Costa Rica, but we're looking into options in other countries. Here, to complement Ricardo's answer, I think that we're seeing a change in the trend, just like the one that we've seen in 2014. We had a very strong activity and we were looking to many countries, and we'll remember that we picked some countries over others because of prices at the time. Now, more than the economic situation, there's been a change in trades in all of the markets, and we know that beyond Central America, there are other markets in the region, because even the U.S. is going back to scenarios that are interesting. We're looking into that from this perspective, with this vision. How is it that we can deploy those resources in the smartest way, so that we can have a return on investment that will be worth it? Also from Juan Fernando Pulgarín, what is the budget for income in 2023, and what's the goal that you've set it as dividends per share for the 2023 operation? The goal that we have, and we were talking about this the previous meeting, is in line with the incomes of last year. We're talking about around more than COP 5.6 trillion. For guidance for dividends per share, there's no one. We have the reacquisition shares. A buyback. The buyback. The next question is the big question, which is, what should we tell our friends to convince them to invest in Celsia? I think that Celsia has a playing margin that is really broad. One thing is to sign, the other thing is to close, but we hope to have that checked by the end of the year. But having COP 1 trillion in cash is something that is really nice, right? Second, here's a detail that's very important. The ROCE that we have in Celsia is around 18%. This is what we are achieving. We demand a lot from the profitable side of things. Yeah, we're doing very nice work on the platforms that has generated a lot of profitability. Remember that a platform like the one in Caoba, we invested COP 500 billion. Then we incorporated assets from Tolima that we had buy at a really good price. We recover all the equity, and we end up with 50% of the company. It's a company that's producing around COP 300 billion in EBITDA per year. This is just to give you an idea of the capacity of playing or moving this company. We created a business like the one of the optic fiber internet. This is creating a highway for all the clients in Tolima and El Valle to bring other products. We have the good news that this is an internal startup, and this month looks like we will have a positive EBITDA this month. This is something that's really interesting. The support that we have from banks, multilateral entities to do things in Colombia and outside, it's very relevant. For the hard times, because this government, it's like if you like cycling, it's one of those pave, those cobblestone stages. That's what the government is doing, is taking us to one of those stages. Please don't doubt in investing in Celsia. The door of the elevator has opened, as Gonzalo Velásquez would say. Now we will give the floor to Sebastián Gallego. He has a question via Zoom. Go ahead, Sebastián. Good morning, everyone. Can you hear me? Yes, Sebastián. Good morning, everyone. Thank you for the presentation. I wanted to ask about three things. The first one is regarding the Acacias and Camelias projects. I would like to hear from you what's the progress on those projects according to the numbers that you were talking and the estimate, the start of operation would be around December. If you could tell us a little bit about the advances and what are the expectations there. Second one is regarding the usage of the transaction resources. You mentioned that the buyback is COP 300 million. I wanted to understand a little bit, considering that you're closing the transaction, the additional resources left from the acquired resource and from the acquisition or the buyback, what would be used for? The third question is regarding regulatory risk that you mentioned the previous meeting. I wanted to know from your perspective, what are the main worries? What are your main concerns with the government plan? Additionally, how is the tariff review that's still ongoing? Thank you. Yes, Sebastián. They're very good questions. We will rephrase and we will repeat them. The first one is, what's going on with the Guajira project? That's basically the question. First, we've been working in La Guajira for five, six years. What is it that we're facing right now? First, there are previous consultations that we haven't been able to close, basically because the requests that we're receiving are outside of any economical logic. There's an additional figure, which is a proportionality test, which is if I already closed 10 previous consultations and there's a new one that I can close, well, then the government has a mechanism that is a proportionality test. Unfortunately, this government hasn't helped with this test. They don't want to do them, this proportionality test. The second one is that the environmental study for the license was filed for the transmission line that we were doing, and not just to us, but many other of the players with different consultants and advisors that have had those lines, and we really don't understand what's going on there. Because what normally happens is that the ANLA, the national agency, allows for changes, but now they're filing them. They just are closing them. Basically, it's starting from zero, and this takes another 8 months, 12 months, to develop this process with the new vision that the agency has. We're having those delays, and there are many things that are stopping the progress. It is a 2-year delay compared to what we had estimated. What has happened, Sebastián, is that in the news, we are seeing the big problems ENEL plant has, that they have all the permits. They started construction a year and a half ago, and from the news, what I have seen is that it has been able only to operate for 50% of the time. The advance, it is minimum, and they are considering retiring from La Guajira based on what we are seeing on the news. It is a very delicate situation, which is really hard to work without the permits. This is a call for the national government that they should be mediators, that they should conciliate if we want wind power to come into the region. I just wanted to add the delay in the permits. We have Acacias and Camelias. For Acacias, that has to be done with Corpoguajira, and from 2021, we filed the request for the environmental license, sorry, in 2022. Sorry, by the end of 2021. As of today, we have not received any notice on that. This makes these types of projects really difficult, and it is important to mention that within the line or within the general project, we have over 120 previous consultations that we develop all of them, and we only have 2 to execute. It is because of these 2 consultations out of 120 that we have not been able to obtain the license. It is worrisome to see the rates at which the government is conducting this process. Also the delays in the transmission connections. Even when we had everything solved, we are not going to start the construction until we have everything ready there. Everything was estimated to start by the end of 2021, but now we are estimating that it will start by the end of 2024. We are facing a hard technical reality because a part that could be built in 8 months, but these delays, it is basically out of everything that we have mentioned. Sebastián, as you can see, we will continue working in those licensing procedures, continue working and seeing how is it that we can move towards the wind power projects in the region. If we cannot do it in La Guajira, we will have to look somewhere else. Now, let us talk about the Plan Nacional de Desarrollo really quick. This Plan Nacional de Desarrollo is going through a very complex situation, which is that it is making the wind and solar projects, or something that this government wanted to do, they put a brake to it, and no one understands why. I am telling you, they are putting a lot of cost there. This has 2 ways to balance the equation. First, there are projects that will be closed, and there are other projects that we will have to readjust with the prices so that the profitability, so that we can pay to the banks, that we can pay cost of operation, and we can see the return on investment, and we can pay to the shareholders, and also pay tax, which is, we trust, something really important here in this country. This will make the prices of some projects go up. This means more expensive energy for Colombians and some other projects will be canceled. This is news that, specifically for me, in particular, it is really sad. There is a lot of Yeah, in this country, they are talking from the renewal sector, that most of the profits will end up for the government or in taxes. Adding that in the tax reform, they put the minimum income, the law, which was 17.5, which was something that De Santos had achieved, that the Duque administration had reviewed, adjusted, to make it easier for projects to be done. Unfortunately, in 8 months of this administration, that law is just a piece of paper now. Now, Esteban, we can talk about the usage of resources. Now, as Sebastiano was mentioning, is to do the buyback, which is COP 600 billion. The rest are going to be resources that will be available so that the board of directors can decide on which of the alternatives, what is it that we can do with these resources that we are receiving from this. But for now, we have the reacquisition, the leverage in the short term, so that we can continue with the process of improving the organization. Thank you, Esteban. There are a lot of questions regarding Guajira, so I think that the topic was already addressed. We also talked about El Niño. Now from Ana Wasca. She is asking about the indicator to index the energy rates. Are you expecting to have it this year? Yeah. When we do it, we do it by the increase that, due to geopolitical factors, there was an adjustment in the CPI. Yeah, the war on Ukraine, the price tariffs, all of that. Typically, the Colombian regulation for the CPI, which had been favorable for the users and the clients in the last one year, was changed. So we did the adjustment, and today, until November, we have the CPI or the PPI, and it is the way to adjust the rate in the distribution components, because some come from generation. That is what we have today. Today, we are seeing that the PPI is decreasing. It is an understanding that the government is calculating a new index for the sector. What is important is to have an index that reflects the increase of the cost in the sector. 30 years ago, before the big blackout, the rates in Colombia were determined by what was called the National Rate Board. It was basically a meeting from technical parts, but the politicians were the ones who set the agenda for those price increases. Obviously, the incentive from the politicians is different from the one of the technicians. The rates in Colombia never had or never considered, and never covered the cost of the service. Hopefully, we will have, with an index, in consensus that will allow to keep the cost of service and it will not generate any issues in the future. Here, I will make a PSA. Doing an analysis of the rates in Latin America, Colombia is the fourth or fifth lowest in the region. The ones that are above us are the countries that have taken the decision of reducing the cost of utilities, and what they have achieved is that the electrical systems are a disaster. Like Venezuela, Argentina, they have blackout after blackouts. Now, what is it that has to be done? First, the appliances, the damage. Second, you need to have compensation with backup stations or plants, small generations. Like the ones when, for those of us who are old enough, you remember that there was a lot of power plants or generators out on the street. Juan Mosquera, these days, was remembering during those 10, 11 months, years, the meals taste like oil because we had to cook with gas. We need a technical indexator, right? We hope that's the case. There's a couple of questions on CapEx. How much is that you're going to be investing? First, we had a perspective. We're looking to the CapEx really closely. The CapEx that we're developing are CapEx that are first, regarding regulation, second one, efficiency and productivity, and third, the projects that first are closed within the financial system, but have a guarantee of the availability and willingness of investment from our board. This has reduced a lot the volume of investment. I don't know, Esteban, if you would like to talk a little about that. In the meeting that we had in March, it's around COP 2.1 billion-COP 2.3 billion. There was a reduction in the investments that were planned for this year. We haven't adjusted those figures, those numbers. Thank you, Esteban. Overall, we've covered all the questions. There's one from Juan Jorge Cruz, and he's asking, "What's the percentage of thermal generation, especially with coal?" We are no longer generating with coal. We're zero coal. Today, basically, we have the backup generation with two plants, which is the one that we have in Barranca, which basically is turned on when there are moments of really high prices or when we experience a La Niña phenomenon. The other one is Tesorito. In Tesorito, we have the most efficient plant in the system, and I dare say it's a new generation plant. It's the last technology, it's a low emission. The other thing that we have is that, really important, is that for the mouth of the well. This means there's no problems of regassing, there's no issues of leaks in the transportation. It's the most efficient thing that you could have in terms of gas generation, is what we have. I would like to remind you all that we are a carbon-neutral company. We're the first company to be like that in the region. Thank you, Ricardo. Overall, we have addressed the questions. We've had 105 participants in Zoom and 64 people joining us via Twitter Spaces. Thank you all for joining us in this meeting, and I don't know, Ricardo, if you would like to close with some parting words. Yeah. I would like just to mention that we're still studying and being very aware and managing the regulatory risks. As I've continually mentioned, in CELSIA, we have the capacity to adapt and change. There was a question on human talent. Everyone in CELSIA, we're committed to continue developing this line of work in renewables. The Net Promoter Score that we have in our retail business is one of the highest. If not, we double any competition in the country. That's a big effort to provide a high-quality service in spite of all the issues that come up. Also, our energetic efficiency business is growing because it's not only with solar rooftops, but everything that we do inside of the companies is efficiency. From compressed air conditioning, energy quality, illumination, engines, all of those types of things, we have the capacity to surveil, monitor, and run operations on that. We have growth lines in operation that is really beautiful. There is a lot of opportunities with all of our clients, and we can open the frontiers to our working teams. That's it. Thank you, Ricardo, Santiago Arango, Esteban Piedrahíta, to everyone who's joining us today. In Twitter, we're trying to provide information, figures, data. Through Twitter, we have set it up threads to really show the reality of the energy sector in Colombia. Hopefully, we will have you again with very good news in coming meetings. Thank you very much.