Good morning, everyone. Thank you for being here with us today to discuss our Q4 results. My name is Carolina Velásquez. I am Cementos Argos Investor Relations Officer, and I will be hosting today's call. On the call today are Juan Esteban Calle, our CEO, Felipe Aristizábal, our CFO, María Isabel Echeverri, the VP of Legal Affairs, Carlos Yusty, the VP of the Colombia division, Gustavo Uribe, the leader of Central America, and Jason Teter, the newly appointed CEO of Argos Materials. First, I would like to ask you to carefully read the legal disclaimer that is currently being projected on the screen, which is also available on the presentation that is posted on our website. Please consider that all the discussions of the financial and operational results held during the call will be based on the adjusted figures, excluding non-recurring and non-core operations.
For a detailed reconciliation of the adjustments, please refer to the annexes of our presentation. Today, after the initial remarks, there will be a Q&A session. If you have a question, please raise your hand by pressing the icon at the bottom of your screen at any time during the conference. We will record this session and upload it to our webpage. It is now my pleasure to turn the call over to Juan Esteban.
Thank you, Carolina, and welcome to everyone joining us today. 2025 was an exceptional year for us, and I would like to highlight three key achievements. First, our Latam operations. We showed remarkable resilience in overcoming challenges across core geographies, emerging stronger and more efficient to capture future opportunities. In other markets, we leveraged favorable dynamics, deep industry expertise, and long-standing client relationships to deliver a differentiated value proposition. As a result, we delivered an EBITDA of COP 1.28 trillion, achieving a 25% margin one year ahead of schedule. This accomplishment was supported by a highly sustainable operation, reflected in our score of 86 out of 100 in the 2025 S&P Corporate Sustainability Assessment, a rating that positioned us among the top performers in our industry. We feel immensely proud of this result as a reflection of the unparalleled execution capabilities of our teams.
Strategically, we are well positioned for continued growth across the region, including Venezuela's recovery, where our brand already enjoys strong recognition. In preparation for a transition in Venezuela, we started positioning our brand in the market since 2023. Today, we export nearly 1,000 tons of white cement each month and are ramping up the exports of gray cement to about 900 clients, covering 23 states and the districts of Caracas, with the goal of exceeding 5,000 tons per month very soon. We are convinced that with our proud operational experience in the country and the pending legal claim that we have for the expropriation of our cement assets in 2006, we are in a prime position to take advantage of the eventual reconstruction of the country.
Second, for our shareholders, 2025 was a record year in distributions, with over COP 3.5 trillion returned through dividends, buybacks, and the spin-off of Propulsora shares, boosting total shareholder returns to over 700% in U.S. dollars since the launch of the spin program through January of 2026. Third, our U.S. expansion. We reentered the market through the launch of our aggregates platform, successfully advancing the first phase of our growth strategy. Our first shipment of 47,000 tons arrived in Tampa, and we secured two additional port positions on the southeastern coast of the U.S. A key milestone was the appointment of Jason Teter as CEO of Argos Materials, LLC. Jason brings extensive leadership experience from Vulcan Materials and Lafarge USA, with a proven track record in strategy and business development, operational excellence, discipline, growth, and commercial strategy in the U.S. aggregates sector.
We are thrilled to have Jason on our team. With this brief overview, I would now like to invite Jason to introduce himself and share his perspective on our U.S. strategy.
Thank you, Juan, and good morning, everyone. It is with great pleasure that I today join my first earnings call as part of the Cementos Argos team. As I've said, it is an honor to assume the role of CEO of Argos Materials at such a relevant moment for the company. Cementos Argos has a clear vision, a strong culture, strategic assets, and an exceptional team. I'm excited to build a world-class team to lead this new phase and contribute to creating a differentiated platform that delivers high-quality, high-impact solutions for our customers in the United States. I want to start this short intervention by reminding everyone of the great opportunity that lies before us. Aggregates is a large industry in the U.S. They are the backbone of concrete, asphalt, and infrastructure projects. Its production is closely related to population base and follows population growth.
Combined, construction aggregates made up over 50% of the total U.S. industrial minerals value, surpassing cement, that represents around 16% of all other segments. Its main attribute is the constantly compounding growth of its price throughout the last 24 years, with an average growth rate per year of 4.9% between 2000 and 2024. This performance is supported by four drivers: scarcity of reserves, market dynamics that enable the formation of micro markets shaped by logistics, operational characteristics, and high barriers to entry. Argos has the right capabilities to capitalize on this opportunity, with premium source assets in Central America and the Caribbean, a unique firepower to acquire and develop synergistic assets in the U.S., expertise and robust network at import sources, and a strong reputation and extensive experience in the U.S. market.
It is strongly positioned to become a relevant market player and generate value to its shareholders. We have a goal of building a business in the next five years that will earn more than $200 million. The strategy is a hybrid approach, combining organic and inorganic growth with an aggregates platform focused on imports and local supply capabilities. We will give further details on the business plan soon and keep all the market informed about our advancements. Thank you.
Thank you, Jason. Now, I would like to invite Felipe to walk us through the performance of our Sprint program.
Thank you, Juan, and good morning, everyone. 2025 and the first few weeks of 2026 have been extraordinary for Sprint. By the end of January, we achieved a cumulative total shareholder return of 764% in dollars since the program's launch in February 2023, reaching $1.2 billion in shareholder distributions. We believe this momentum will continue, supported by the strategic objectives outlined in the fourth edition of the program and our strong position as an issuer poised to benefit from the emerging markets cycle already underway. I'd like to introduce Sprint 4.0 and provide detail on its pillars, which now extend over a two-year period to incorporate initiatives requiring longer execution timelines.
In the first pillar, in terms of financial results, we are already operating at a top-tier industry level in terms of margins and return on capital. We acknowledge that presidential transitions in key markets such as Honduras and Colombia may challenge further margin expansion in the short term. Our goal is to maintain profitability between 24% and 26%, enabling us to deliver an EBITDA between COP 1.3 trillion and COP 1.4 trillion by 2027. We also expect to sustain a ROIC above 16% over the next two years. For the second pillar, related to distributions to our shareholders aiming to boost the TSR, we rely on two mechanisms: dividends and share buybacks.
For dividends, we are considering an ordinary dividend of COP 430 per share, representing an 11% increase vis-à-vis the ordinary dividend paid in 2025, distributed in four equal installments, and an extraordinary dividend of COP 150 per share, payable fully in April. For buybacks, we're proposing to roll over the program and top it up to COP 450 billion for the next two years. These distributions underscore our commitment to delivering tangible value to our shareholders while preserving ample flexibility to advance our growth agenda. Our third pillar consists of our share liquidity. We remain highly optimistic about the inclusion in the MSCI Emerging Markets Standard Index in the near future, as our share has exhibited a strong performance this year.
We surpassed the highest nominal price in the company's history and closed January at 13,800 COP, a 30% year-to-date return. Moreover, our average daily trading volume increased by 13% vis-à-vis the 2025 average, a clear reflection of growing investor interest, market visibility, and Latam equities momentum. To further strengthen liquidity and support both existing and new investors, we're implementing a dual market maker model, in which two independent firms with differentiated strategies will operate simultaneously. Finally, under the fourth pillar of this new phase of Sprint, aligned with our strategic priority to expand in the U.S. market, we are introducing key milestones to enhance visibility and enhance monitoring of progress across both organic and inorganic initiatives, as Jason mentioned.
For organic growth, we reaffirm our target of generating approximately $100 - $150 million in additional EBITDA by 2030, with investments of less than $500 million. The milestones enabling these include securing the DOT certification in all operating states, enhancing logistics efficiencies through the development of a proprietary port in Dominican Republic, and obtaining two additional marine terminals in the U.S. Southeast coast. Scaling production from our Dominican Republic and Panama quarries to exceed three million tons dispatched by 2027. And finally, achieving a positive EBITDA by the end of 2027. In our inorganic strategy, we aim to complete a medium-sized acquisition that provides local U.S. presence, along with more than three bolt-on transactions, seeking to generate an additional $100 - $200 million in EBITDA by 2030.
Additionally, in 2025, our cash holdings generated an average return of SOFR plus 17 basis points, totaling around $100 million through a strategy executed with global asset managers under the parameters set by our board of directors. In conclusion, with our clear strategy, a strong balance sheet, and disciplined execution, we are well-positioned to capture opportunities and generate long-term sustainable value.
Thank you, Felipe, for your intervention. I would like now to comment on our consolidated results. Since the beginning of the year, our core markets, such as Colombia and Panama, exhibited signs of complex dynamics. We had to rapidly adjust our business model for these conditions. In this short but profound reinvention process, we found ourselves developing key operational and commercial capabilities and strengthening our relationship with main stakeholders. Today, we feel proud of the results achieved and moreover, of the solid foundations we have built for growth when the time comes.
During the entire year, we dispatched 9.3 million tons of cement, remaining flat versus 2024, as a result of mixed performances, with a particularly sharp decline in exports from Colombia due to our decision to shut down kiln number three in Cartagena in August of 2024, and a contraction in demand from the US last year. In ready-mix, we dispatched 2.3 million cubic meters of ready-mix, which represented a decrease of 12%, mainly driven by the slowdown of the housing segment in Colombia, and still affected by the lack of housing subsidies from the Ministry of Housing and the transformation in this business line strategy in Panama. However, Q4 volumes went up year-over-year, both for cement and ready-mix, with growth rates of 3% and 2% respectively, reflecting an improved environment.
We achieved full year revenues of COP 5.2 trillion and adjusted EBITDA of COP 1.3 trillion, expanding 6.6% versus last year and aligned with the upper limit of our full year guidance. This EBITDA performance was complemented by an adjusted margin of 25%, which meets our guidance one year ahead and entails an expansion of 215 basis points versus last year. The Q4 consistency on profitability focus initiatives was key for the consolidation of the results, as we delivered COP 347 billion of EBITDA, representing a 27% margin. Moving into the regions, we find positive results overall.
We have seen a clear recovery of the industry in Colombia that ended up with a solid growth despite sharp first month decreases, strong economic fundamentals driving up consumption in Honduras and Guatemala, and a still robust demand in the Dominican Republic. Now, I would like to invite Carlos to discuss further on the financial and operating results for Colombia and our market strategic perspective.
Thank you, Juan, and good morning, everyone. Since May 2025, we've seen a clear recovery in the Colombian ready cement market, with volumes trending upward after several months of contraction. Industry demand reached 12.7 million tons, up 5% year over year. As we mentioned in our last call, the retail segment has been the main driver, growing 11% year over year, fueled by self-construction. Our total cement volume for the year reached 3.9 million tons in the local market and 1.2 million tons in exports. The decline in exports versus 2024 was given mainly by lower dispatches to the U.S., affected by the weakness in demand in this country.
In ready-mix, in line with the industry recovery observed since September, we had our first positive quarter of the year, contributing to a total of 2.1 million cubic meters for 2025. Quarterly revenues came in at COP 735 billion, with EBITDA of COP 226 billion, representing a 9.2% increase year-over-year and a 30.7% EBITDA margin. In addition, I'd like to emphasize that Q4 delivered the best historical EBITDA per ton we've ever recorded, reaching $53 per ton. This underscores the consolidation of our profitability strategy, supported by stronger operational reliability and the positioning of our value proposition, which continues to deliver top-level products and services to our clients.
For the full year, revenues reached COP 2.8 trillion, an adjusted EBITDA of COP 812 billion, up 3.6% versus 2024, with margin expansion of 182 basis points, reaching 28.4%. Despite a challenging start of the year, we captured efficiencies across the value chain by approximately COP 70 billion. Focused mainly on fixed costs, delivering positive consolidated results, and building a solid foundation to leverage the ongoing market recovery. Our free cash flow conversion ratio reached 76% of EBITDA, underscoring the strength of our cash management strategy. This, together with our EBITDA margin and return on capital employed, are the highest levels in the last decade, reinforcing the strength of our results.
Looking ahead, we expect cement and ready-mix market to continue the recovery path, driven by demand in major cities and further momentum from self-construction. In the midterm, we remain optimistic, supported by housing sales growth of 25% year-over-year, and a robust pipeline of more than 100 projects, including Túnel de Oriente, Arena Primavera, and Metro de la 80 . Regarding the recent minimum wage increase, we are conducting a thorough review of our operations to identify efficiency initiatives that can offset this impact, and we've already obtained encouraging results. Nevertheless, we foresee some short-term impacts derived from the higher than usual increase.
We have developed a best-in-class operation and are confident in our ability to further strengthen performance and enhance profitability by capitalizing on market upside, operating leverage, and potential pricing traction, with the goal of reaching an overall EBITDA increase of $60 million in the next three to five years.
Thank you, Carlos. Now, we would like to invite Gustavo to comment on the results of Central America and the Caribbean.
Thank you, Juan, and good morning, everyone. In the region, cement volume showed solid growth, reaching one million tons in the quarter and 4.3 million tons for the year. This represents year-over-year increase of 12.6% and 8.6%, with most of our operations outperforming their markets. In ready-mix, the downward trend continued, aligned with industry contraction and our strategic decision to scale back this business line in Central America. Q4 revenues were $132 million, bringing the full year to total of $554 million, a slight decline versus 2024, mainly due to Panama's contraction. EBITDA reached $34 million in the quarter and $141 million for the year, with margins of 25.6% and 25.4%.
The 30 basis point margin expansion was driven by the Caribbean, where the Dominican Republic and Puerto Rico delivered record profitability. Now, let's turn to Central America. Cement volumes in the Q4 rose 8.4% to 441,000 tons, supported by strong demand in Guatemala. Revenues reached $59 million, with EBITDA of $19 million and a margin of 33.1%. While slightly lower than last year, this margin remains the highest among our regions. Breaking it down by country. In Honduras, despite the kiln stoppage in the first half, volumes recovered, ending with 1% growth and margins above 30%. Operational excellence initiatives reduced clinker use to 45% and maintain our kiln OEE above 90% and cut carbon emissions by nearly 20%.
In Guatemala, the market grew 18% by November, supported by stronger remittances and higher cement prices. We captured record EBITDA and continued positioning ourselves as local alternative to imports. In Panama, industry volumes and prices declined. However, efficiency measures offset the impact. We reduced fixed costs by $1 million and SG&A by $2 million, while expanding contributions from premix materials, aggregates, and terminals, driving 10% operating EBITDA growth. Now, let's move to the Caribbean. Cement sales reached 376,000 tons in Q4 and 1.5 million tons for the year, up 4.1%. Revenues were $67 million in the quarter and $275 million for the year, aligned with the volume growth. EBITDA margins stood at 19.7% in Q4 and expanded to 21.1% for the year, thanks to efficiencies across the value chain. By country.
In the Dominican Republic, volumes grew 7% despite currency evaluation and increased competition. EBITDA reached record levels, supported by a 30% capacity expansion completed early in the year. In Puerto Rico, industry growth slowed, but we achieved a 20% EBITDA increase and reinforced market leadership with capital light model. In our Caribbean operations, Haiti moved from negative to positive EBITDA, while Suriname quadrupled its 2024 result. Together with French Guiana and T&T, these markets contributed over 10% of the regional EBITDA. To wrap up, 2025 was a year of portfolio optimization and operational right-sizing. We consolidated the best models to serve each market and strengthened our leadership position in the region. Looking ahead, we are confident that these foundations will support continued positive performance.
Thank you, Gustavo. Thanks to the strong country-level results and corporate initiatives, we successfully met all the objectives outlined in our 2025 guidance. Building on these achievements and considering the near-term outlook for the markets where we operate, we are presenting the following guidance for 2026. EBITDA margin. We expect to maintain a margin between 24% and 26% within the next two years, supported by the consolidation of our commercial, operational, and logistical efficiency initiatives across our geographies. Profitability. We aim at further enhancing profitability, targeting a ROIC above 16% for the next two years. CapEx. In 2026, we plan to invest between $80 and $100 million in Latin, with at least $65 million allocated to maintenance CapEx and around $80 - $100 million in our growth plan in the U.S. Adjusted EBITDA.
We project adjusted EBITDA to a range between COP 1.3 trillion - 1.4 trillion, or the equivalent of approximately $350 million, representing a midpoint increase of 6% compared to our 2025 results. Net debt to EBITDA. Taking into account our current cash position, we have set a midterm target of 2x net debt to EBITDA, which we expect to reach within the next three to five years as our growth plan advances. We remain confident about the road ahead and reaffirm our commitment to meeting our midterm targets. This outlook is supported by improving market conditions, the effective execution of our optimization strategies, and our discipline focus on sustainable high-return investments that will secure long-term growth. Carolina, we can now proceed with the Q&A section.
Thank you, Juan. We will proceed now with the Q&A session. Please remember that in order to ask a question, you need to raise your hand using the icon that is at the bottom of your screen. I will say your name and company, and will enable your microphone. Take into account that you need to unmute your microphone before you speak. Please note that Jason has recently joined and is currently reviewing the business plan for the U.S. Therefore, any detailed questions in this regard will be addressed in future sessions. First question comes from Alejandra Obregon from Morgan Stanley.
Hi. Good morning, everyone. Thank you for taking my question. I guess I have two. The first one is on the ADR listing. I was just wondering if this is contingent on any particular milestone of your strategic path, and what's the timing for this, or what do you have in mind here? And the second one is, so you mentioned that this first phase of your strategic review will become EBITDA positive by 2027. So I was just wondering if you can perhaps walk us through the cadence of investments and the path to EBITDA growth in the earlier years and, and what are sort of like the key milestones and, and the gating factors in the process for these aggregates or exports platform? Thank you.
Thank you, Alejandra. Even though, I mean, Jason is just in the onboarding process, I mean, he's more than ready to take your second question. I would like Jason to start by answering your second question.
Alejandra, nice to meet you, and thank you for the question. In terms of the cadence of investment, we're as, as Carolina said, we're currently and I'm currently going through the plan, and adjusting that. But I would expect, in terms of the import platform, for the majority of the capital to be spent probably in the second half of 2027 and in 2028, and maybe a little bit in 2029. But all that is subject to change, based on engineering and timing of permits and all that, those kinds of key milestones as you talked about. In terms of the key milestones, as you know, we've already put one shipment into Tampa. We're currently commercially working on, on that.
And then throughout this year, we will have a few more shipments likely into Houston, New Orleans, and also Tampa. So I think those are the early key milestones that we're looking to achieve. And then internally, we're working on, obviously, the detailed engineering plans and permitting work in the Dominican Republic. And so those will hopefully happen, and we'll have clarity on all of that later this year.
... And just to add to Jason's comments, I mean, the operation will get EBITDA positive once we have the ports and terminals in place in the Dominican Republic. I mean, as you know, we will start using some ports that are not our long-term ports. We will build a private port in the Dominican Republic, I mean, because the volume that we are expecting to handle is significant. So the first couple of years, we will be using two alternatives, which are not ideal from the standpoint of our long-term competitive plan, Alejandra. And Felipe will take your first question regarding the ADR.
Morning, Alejandra, and thank you for your question. As you mentioned, the potential ADR listing is subject to the progress on the Argos business plan. We expect that, I mean, we would be ready to pursue that path in around 2-3 years. But that is... I mean, the end game of this whole strategy is to pursue that path and have the market recognize the full value of that business plan.
Thank you very much, Juan and Felipe, and nice to meet you, Jason.
Thank you, Alejandra.
Next question comes from Gordon Lee, from BTG Pactual.
Hi, good morning. Thank you very much for the call. Two, two questions, both related to the, to the U.S. business, and, and one is a little bit of a follow-up on Alejandra's question. But you, you mentioned the cadence of investment, but I was wondering if you could share with us what you expect the total investment to be, from, you know, including with the $80 million - $100 million that you disclosed for 2026 through 2030, to, to, produce that platform that would generate the $200 million - $300 million in EBITDA. And the other question I had is: I was wondering if you could share with us, in your EBITDA guidance for 2026, what is the, the, the EBITDA drag from the U.S. business?
In other words, can you share what you expect the EBITDA loss to be from the U.S. business in 2026? Thank you.
Sure, Gordon, and I can take, I mean, the first one. I mean, the total CapEx that we are foreseeing for the first phase of the aggregates platform is $500 million, to get us to probably $150 million of EBITDA, which is going to be phase one. We will complement that, as we have been explaining with bolt-ons in the U.S. and greenfields as well. So this phase one is $500 million in CapEx, and we expect that CapEx to get us to $150 million of EBITDA by 2030. And Felipe will get your second question regarding the drag and the deployment of this new business plan for Argos.
Good morning, Gordon, and thank you for your questions. EBITDA drag for coming from the Aggs business for 2026 is expected to be $6 million.
Perfect. Thank you. If I could just have one quick follow-up, just to the CapEx, the 100 and the 500 that you mentioned, sorry. How much of that CapEx has already been expensed, so through 2025?
It's just a small portion of that.
Twenty twenty-five-
Yeah.
We probably invested around $3.5 million.
Okay. All right, so minimal. Perfect.
A minor fraction of the total amount.
Great. Super. Thank you very much.
Thank you, Gordon.
Thank you, Gordon. Next question comes from Marcelo Furlan, from Itaú.
Hello, guys. Good morning. Can you hear me?
Yes, Marcelo, we can hear you well.
Okay. Thank you. Thank you so much for taking the question live. My questions are three, but the first one is just a follow-up from the last division. So if you guys could share a little bit, you mentioned that bolt-on acquisitions would be in the pipeline for you know the next months and years, so thinking about the U.S. growth. So your-
You are not, you are not sounding that clear, Marcelo. Can you, can you repeat your question, please? Because we, we can't hear you well.
Y-yeah, sure.
Or something, yeah.
Can you, can you hear me better now?
A little bit better.
Okay, so my first question is a follow-up regarding the US division. So if you guys would say a little bit regarding the potential bolt-on acquisitions in terms of size. So what would be the size to expect for this future M&As? And my second question is related to the Colombia division. So if you guys could share what is the glide for 2026 in terms of PMI response for the division, so if you guys are still working on cost efficiency and so forth. And the third question is related to being included in the MSCI index. So if you guys could just give more details regarding what are the next steps, or what is the current stage of being potentially included in the MSCI market index? So these are my questions.
You guys can hear me. Thank you.
... Thank you, Marcelo. So, Jason, we'll take your first one.
Hi, Marcelo, nice to meet you. In terms of M&A and the size, I think that's gonna vary both in size and in timing. Over time, as you know, you know, that end ends up being opportunistic in nature. But I can tell you, we will have a very robust pipeline and already have some potential targets in our pipeline that we will be diligently working on. In terms of the size, as you know, we have significant, I'll call it firepower, from the liquidity event with Quikrete. And so we will be looking to deploy that capital in M&A over time.
Regarding Colombia, we're extremely happy with how the year ended up. Strong Q4 , as you saw in our remarks. Very strong margins, good volumes, and 2026 started the same way. So I would like Carlos Horacio to give you a little bit more color on our milestones for 2026. So go ahead, Carlos.
Okay. Hi, Marcelo. Like Juan was mentioning, the idea is to continue in the same line that we ended 2025. We are delivering now some different strategies in terms of sales in the different regions of Colombia. We are capturing already a very good volume in the massive segment. For that reason, we are expecting a very good Q1 , and for the rest of the year in the same vein. Working as well on and continuing as well in the line of capture more reliability or more synergies in our operations.
Thank you, Carlos. Now, Felipe will take the question on the MSCI, so go ahead, Felipe.
Good morning, Marcelo. So honestly, we were somehow, somewhat taken aback by the announcement. Last week, we were expecting to be upgraded to the standard section of the MSCI based on our calculations. I mean, we're very close to reach the overall market capitalization and float-adjusted capitalization. We are probably the most liquid stock in Colombia when compared to market float-adjusted capitalization. So, I mean, we would expect for this upgrade to happen in 2026. We are right there. We're very committed to delivering on this promise, and this is still something that we really want to achieve in the context of the Sprint program.
Okay. We stop here, guys. Thank you so much.
Thank you, Marcelo.
Thank you, Marcelo. Next question comes from Gabriel Perez, from Credicorp Capital.
Hi, guys. Can you hear me?
Yes, Gabriel. Really good. Really well. Go ahead.
Thank you. First of all, thanks for the presentation. I have three questions, mostly for the Colombian segment. The first would be that over the last two quarters, EBITDA margins in Colombia have been around 30%. How do you expect to sustain these high margins, particularly considering the impact that higher minimum wages could have on the sector? Also, in line with the higher minimum wages, what do you expect the impact to be in the cement demand, taking into account that higher construction costs could affect the construction recovery expected for 2026? And finally, in the earnings report, you mentioned that the absorption of Concretos Argos will be pursued to achieve additional operating efficiencies. So could you elaborate on how this transaction will translate into these efficiency gains, please?
Sure, Gabriel, and I would like Carlos Horacio to answer your two questions. So, Carlos, go ahead.
Hi, Gabriel. Starting with the first one, we are expecting a pretty similar EBITDA margin for 2026. Obviously, we have some impact from the increase of the minimum wage, but we are working from January 4, how to mitigate this impact in our cost, really working more in efficiencies. But obviously that is an... Yes, it was a real impact, but we are working on it. In terms of the impact in the m- because the minimum wage in the demand in 2026, we have to split in two. Probably in the retail segment, probably the volume increase because there is more circulant in the street, and probably it impact positive in the demand in the retail segment.
In the construction segment or in construction segment, more in the housing sector, we are still analyzing, or the sector is still analyzing what will be the impact in terms of the, the cost in the, in the constructions, but as well, what will be the impact? Because the increase in the mortgage, in the mortgage rate, in the, in the mortgage rate, really now is not so clear how, how big could be the impact in the next, in the next months. And the third one is, what about the merge the Cementos into... the Concretos Argos into Cementos Argos? Really, it could, it, it, it give us some efficiencies. The, the principle or the most important efficiencies is because we sell cement from Cementos Argos legal entity to, Concretos Argos legal entity.
When after the merger, we optimize the impuesto de industria y comercio, the ICA. In the case of Colombia, you know very well, the ICA obviously when a transaction within the same legal entity, and as well, some other efficiencies in terms of optimizing the transaction between these two legal entities. Obviously, it help us, but this, the capture of the, this and these efficiencies will be more for 2027.
Okay, guys. Thank you.
Okay.
Thank you very much.
Thank you, Gabriel.
Next question comes from Mariana Gomez, also from Credicorp Capital.
Hi, thanks for the presentation. I have two questions. My first question is related to Venezuela. I see that the company is targeting a 2-3% market share this year, but given the country's economic context, what demand signals are you currently seeing that support expanding operation at this stage, rather than taking a wait and see approach? My second question relates to the impairment recorded this quarter. Could you clarify if it's related with the Panama or the Puerto Rico operations? Additionally, should we expect further impairments over the course of the year?
Thank you, Marianne. Thank you for your questions. I mean, regarding Venezuela, the reality is that we are extremely bullish about Venezuela. Yes, the market has decreased in a significant way. I mean, from a 10 million tons market per year to probably 1.5 last year. But the reality is that, in our opinion, the reconstruction of the country, starting with the oil and gas sector, plus the electricity sector, will need significant volumes of cement and concrete. And we consider that we will have a first-mover advantage. As you all know, we have a pending legal claim with the Venezuelan government for the expropriation of our cement plant in 2006. And we are completely sure that Venezuela is going to become one more a significant market in Latin America.
On top of that, I mean, what we, what we have been doing since 2023 is just repositioning our brand in the market. So far, the product is getting a lot of traction, and Carlos can expand a little bit more about our current strategy. But the reality is that we are foreseeing a future in which Venezuela is going to be an important part of our footprint. And we are, like, being extremely active with the U.S. government and in Venezuela in order to be that first mover in the cement industry. The reality is that the cement industry will have to be rebuilt, and we see ourself as the natural players to make that happen. So a lot of, you know, hope and optimism regarding Venezuela.
And then, Carlos, can you explain a little bit more, I mean, so far from a commercial standpoint, the traction that we are getting in Venezuela to complement?
Okay. Okay, Juan. Marianne, we started with the exports to Venezuela about two years ago, like Juan mentioned, and really started just exporting white cement. Since the last quarter of 2025, we started with the export of gray cement. Really, the reliability of the plants in Venezuela are really low. The current plants in Venezuela that are operating are really low. For that reason, we are taking advantage of that situation, and we established a very good relation with a very good clients in Venezuela that has a big network of customers across the 23 states there.
And we are increasing month by month both products, the white cement and the gray cement. And as well, giving us well, not just exporting the product, but giving us well some how to apply better the product that really we have a very good expertise in technical support. And for that reason, we are very confident that we can increase, like Juan mentioned as well in the first part of this call, that the idea is to take from export to Colombia by the end of the year about 3% - 4% of the local market there.
We are seeing a very good opportunity for us because our cli- with our, our quality, the reliability of our, the our approach, and the technical support that we are- with our value proposition really is very, very strong to take a very pos- to, to, to gain market share there.
Thank you, Carlos. Now, Felipe will take your second question, Marianne.
Good morning, Marianne. Regarding the impairments that we have announced during 2025, these are non-recurring transactions. They don't have any impact, any negative impact on the cash flow generation ability of the company. On the contrary, particularly the impairment in Puerto Rico, given the existence of certain capital taxes in Puerto Rico, this impairment actually reduces the tax burden in cash terms going forward. So yeah, we would expect a positive impact coming from these... yeah, from these impairments, and we're not expecting any further impairments going forward in any of the businesses.
Thank you. Just a follow-up question. So the impairment recorded this quarter is from Puerto Rico, not from Panama?
Okay. So in Panama, in particular, that impairment refers to clinker inventory that was acquired and has a cost that is above the current market price. So it is not currently economically feasible to exploit that inventory. So we are writing down the value of that inventory to account for that reality. This is an inventory that was acquired a few years ago, and given the evolution of the market, we believe that the most sensitive approach is to write it down and then wait for market conditions to maybe change in the future. And eventually, that clinker inventory might be economically feasible to exploit and commercialize in the market.
Yeah, just to complement, Felipe, Marianne, it was the result of a take-or-pay contract like 10 years ago that we had to take some additional clinker because we didn't meet the required volumes, and it will be used. I mean, now with the write-off, the reality is that we create a full incentive for the plant to consume the clinker, because it will be more, you know, cost efficient for them to start consuming that clinker as an addition to cement than to add limestone. So the reality is that it is an economic decision to create incentives for Panama that would not have like any impact in our cash flow. But thank you for the question.
Thank you.
Thank you, Marianne. Next question comes from David Gomez, from Diario La República.
Hi, guys. Thanks for your time. My first question is, this year, what's your goal of production or shipping to the U.S. this year? And the second one is, are you exploring to arrive to new countries in this year?
Thank you, David. I mean, current, like the forecast for export to the in general, out of Cartagena, close to 1.2 million tonnes. That is basically the capacity that we have for exports. They will go mainly to Puerto Rico, the US, and the Caribbean. So that is our forecast of exports for 2026. And the reality is that we have defined the north of Latin America as our, you know, target market. But currently, we are foreseen to continue improving our operations in all our current geographies. We have been having a very good performance in Guatemala, and we are looking at some options in that market. And as I mentioned a little bit earlier, Venezuela is the other geography that, in our opinion, will start becoming important in our footprint.
Those are our plans for Latin America in 2026.
Thank you.
Last question comes from Javier Villegas from Bancolombia.
Go ahead, Javier.
Good morning. Do you hear me?
... Yes, Javier, we can hear you well.
Yeah. Oh, okay. Good morning. Thanks for the presentation. I have two questions. First one is concerning the pressures facing the construction sector in Colombia at the end of 2025. What do you think will be the main changes, challenges, sorry, for this year? The second one is about the decline in the cement export segment in Colombia. Could you give us more details about that decline recorded in the quarter? Thank you.
Thank you, Javier. Just, I take the second one first. I mean, we shut down a wet kiln in Cartagena in 2024, in August of 2024. So the reality is that we lost a little bit of capacity for export, but it was the right economic decision. So the only explanation is that one. We are using our full capacity to export out of Cartagena, but it decreased with the shutdown of kiln number three. And second, in Colombia, for 2026, we are extremely optimistic.
I mean, the reality that we see all the investors and looking at Colombia as a significant opportunity, and hopefully politically, we will have a good, you know, a good change in the current situation, and the country has a significant potential. You saw what happened with a little bit more volume with our numbers in the fourth quarter of the year, and once the demand start the trend that it was having in the past, that the reality is that we are- we see that Colombia is full of opportunities. And consumption, as Carlos mentioned, will continue to be a significant driver of demand, especially in the... during the first half of the year.
Going forward, the reality is that what will drive demand will be all the fundamentals in Colombia. I think that there are plenty of investment waiting for a better political situation.
Thank you.
Thank you, all. Juan, there are no more questions.
Okay. So once again, thank you so much, for your interest in Cementos Argos, and we continue to be extremely bullish with the future of the company. Thank you so much, and have a great day.