Earnings Call: Q2 2024

Aug 15, 2024

Summary

Nutresa transactions generated a COP 2.6 trillion after-tax benefit and increased the infrastructure portfolio’s weight. Consolidated EBITDA rose 41% to COP 3.4 trillion, while 2024 guidance reflects lower revenue but higher net profit from transaction effects.

Esteban, thank you. Thank you very much. Thank you for being with us today. As usual, it's a pleasure sharing with you the results of this second quarter of 2024. I would add that during this first quarter of the year, the business have kept giving solid operational results, which have been reflected in the positive figures that we'll be sharing with you next. Before introducing the summary of the financial results for the company in a detailed manner, I would also like to make a comment about the results of the agreement for the disinvestment that Grupo Argos made from its share participation in Grupo Nutresa, which has led to the materialization of a relevant profit for the company, besides expansion of larger economic rights for these organizations for Grupo Sura. Now, I want to invite you to look at the slide concerning the impact of this operation. Thanks to the successful conclusion of the public offer by Grupo Nutresa shares, and second, share exchange during this second quarter. All the operations were completed under the framework agreement that was celebrated with them during the 15th of June of 2023. As a result of this implementation, Grupo Argos, Grupo Sura, don't own shares at Grupo Nutresa anymore, or nor IHC, JGDB, and Nutresa only have Grupo Sura shares now for the Sociedad Portafolio. Besides, it's expected that in the upcoming months, we'll finalize the implementation process for the Portafolio society, by which we will distribute to the shareholders of this company, in a proportional manner, according to their participation, the remaining shares. This is composed by 62 million shares of Grupo Sura and 82 million shares of Grupo Argos. It's the participation that Nutresa initially had, both in Grupo Sura and Grupo Argos, and as part of this decision, has been included in the Sociedad Portafolio. As a result of this liquidation, Sociedad Portafolio anticipates that will give Grupo Argos 13.7 shares, meaning by the treasury shares. In order to facilitate this process, last 31st of July, the company carried out an extraordinary meeting, with the shareholder assemblies, in which a change of destination of the reserves of the society was approved in order to receive the shares, which will be treated as reacquired shares. Likewise, Grupo Argos will also receive economic rights of 10.3 million additional shares for Grupo Sura. Such as it has been communicated previously to the market, we consider that Grupo Argos, as an infrastructure holding, does not have the intention nor the vocation to constitute as the controller of Grupo Sura. Grupo Argos will transfer shares into autonomous equity that has the irrevocable structure of not exercising political rights in a way that it will not exercise political rights further than 49% of the shares that are represented in any shareholder assembly for Grupo Sura. In this same shareholder assembly that I mentioned for Grupo Argos, a statute or bylaw reform was approved, focused on strengthening the corporate government practices for Grupo Argos. Among other changes, two articles were included in the social bylaws that propel towards the equitable treatment for shareholders and offer exit options at right prices in the case that there is a takeover bid for the ordinary shares of Grupo Argos. The reform establishes the right of the shareholders to receive an offer for 100% of the shares with a right to vote, ensuring that they will be prorated and will receive a fair price in case that the beneficiary acquires 20% or more of the ordinary shares. Besides, a right is granted in order for the price to be equal to those shareholders that sell their operations in a takeover bid, if in the upcoming months, the same beneficiary launches a takeover bid for the same price. This will always be borne in mind in order to include best practices in these bylaws and update them according to market trends, reassuring the commitment with a continuous update and better corporate practices in benefit of all its shareholders. From another side, given that all these steps have been completed under the framework agreement, we can see in a consolidated manner the impact that these transactions have had for Grupo Argos. The investment in Grupo Nutresa was classified as a financial instrument measured at a reasonable value, with changes in the ORI, or also known as the other integral result, by which the generated profit in the transfer of the shares of Grupo Nutresa was reflected under layers in the accumulated gains as a reclassification of the ORI. The rest of the associated effects with the transaction are recognized in the profit and loss statement, because of this, both effects must be considered jointly in order to visualize the net benefit of this transaction. The release of accumulated gains in the ORI was COP 1.5 trillion, and the company recorded a profit in its consolidated profit and loss statement of COP 1.1 trillion. Adding like this, an economic benefit after taxes of COP 2.6 trillion. This effect includes the profit recognized for Grupo Sura for this transaction, incorporated at the same time in the profit and loss statement of Grupo Argos through the traditional application of the participation method. In the separated ORI, the company recorded a negative net result of COP 196 billion that include both costs as well as associated taxes to this transaction. Nevertheless, when considering this COP 1.5 trillion of the accumulated gains released in the ORI, the net benefit of this transaction will be of COP 1.3 trillion. The transaction also impacts the consolidated equity given the increase of the economic participation in Grupo Sura, because of the difference between the implicit and average value of the reacquired shares by the company. Summarizing, with the close of all these operations of this framework agreement and the liquidation of the Sociedad Portafolio, Grupo Argos will move to have from 22% to 46% of the economic rights of Grupo Sura. That is actually one of the main financial conglomerate groups of Latin America, recording a net gain of COP 2.6 trillion in its financial results. This added to the operational dynamics in all of our assets that will be seen further on, places the company in very good results, but besides strengthening the company in order to continue its strategic route as infrastructure asset management. The new sum of the parts in Grupo Argos. With the materialization of the exchange of its participation in Grupo Nutresa, the Grupo Argos portfolio has experimented a significant transformation, orientating more towards infrastructure. On slide 4, we could see how the investment portfolio has reformed for this organization. Taken as a reference the values on the layers of our non-listed investments such as Odinsa, an urban development business, Pactia, and among others, and the price of the shares in the Colombian Stock Exchange of our listed investments such as Celsia or Cementos Argos, or Grupo Sura, or Sociedad Portafolio, and obviously, as it was mentioned, Nutresa. We see that in respect to the second quarter previous year of 2023, the portfolio of Grupo Argos has a price of COP 2.8 trillion, reaching COP 19 trillion of total value. This increase is supported in the close of the strategic transaction, as the one I just mentioned, and some materials, and a good operational performance of our business. In order to administer this portfolio of COP 19 trillion, Grupo Argos, as an asset manager, acquired operational expenses of COP 86 billion during the last 12 months, excluding the operational expenses of the urban development business, depreciation, amortization, and the non-recurring operational expenses. This relation between the administration expenses and the managed portfolio equals to a ratio of 0.5%, which places the company under the comparable asset managers. When including the associated expenses to merger and acquisition operations during the last 12 months and generated profits for several trillion Colombian pesos, this ratio is increased to 0.7%. This is a figure that is still below any other asset administrator. We also need to consider that the role of Grupo Argos is a strategic architect role by which we actively participate in this capital structuring, in the strategy development, in the identification and materialization of merger and acquisition operations under the development of human talent, brand management, and institutional relations with different republics and governments in favor of a better value construction of all of our businesses, meaning by this, Grupo Argos management goes further than a passive management of a portfolio. From another side, the disinvestment of Grupo Nutresa and operations such as some materials have allowed for Infrastructure Cement to increase its weight from 56% to weigh 70% within the investment portfolio of the company, aligned with the strategic route of continuing being a manager focused on infrastructure businesses. Now, let us discuss about market performance. In this first semester, we keep on advancing in our asset repurchase programs, focused on having a different mechanism in order to transfer value to all our shareholders in a consolidated manner. The companies of Grupo Empresarial Argos have executed more than $100 million since these repurchase programs have begun. I speak of Grupo Argos, Cementos Argos, and Celsia. In the last 12 months, the price of the ordinary shares of Grupo Argos has increased 85%, the preferential shares 74%, the ordinary shares of Cementos Argos have increased 148%, and the shares of Celsia, 60%. In the same period, the market cap for the companies of Grupo Empresarial Argos have increased in more than COP 13 trillion. In the measure that we purchase our own shares at the current market values, in which we continue observing a relevant gap between the fundamental value and the price of our market shares, the participation of each of the shareholders is increasing. Besides this strategy has offered a larger dynamism and liquidity in the market in the moment that it has been required. Moving on to the consolidated results for this first quarter of 2024, as you might see on slide number 6. Grupo Argos closed with consolidated revenues for COP 8.2 trillion. This is stable compared with 2023, and an EBITDA of COP 3.4 trillion, representing a growth of 41% compared with the same period last year. This bearing in mind that, as a result of the agreement between Cementos Argos and Summit Materials for the combination of the North American assets, the company disposed of 100% of its subsidiary shares in the United States, by which the involved assets in this transaction were classified as a discontinuous operation. As a consequence, the company made changes in the presentation of its financial results consolidated up to 30th of June of 2023, reclassifying all the associated accounts of the group of assets that have been disposed in the United States to a net profit line under discontinuous operations. As a result, the net profit closed at COP 6.8 trillion, and the controlling net in COP 4 trillion. This is a figure that reflects the generated revenues of these transactions with Summit and the exchange that we had with the Nutresa shares, leveraged in the good operational results of our infrastructure investments, and driven by the same, not requiring effects that affect the consolidated results. The separate financial results show that the accumulated revenues for the year closed in COP 3.2 trillion. The EBITDA closed in COP 3.1 trillion, and the net profit reached COP 2.7 trillion. Now, I want to invite you to move on to slide number 8, where we can see a summarized structure of the assets that the company manages at the close of this first quarter, and as they will keep on being recorded towards the future in terms of the financial results. We can see that despite that Grupo Argos keeps exercising control and consolidated Cementos Argos, Celsia, and Grupo Nutresa, the investments that our subsidiaries have made in last years have led that many of the results, assets, and liabilities are now consolidated line by line in the financial results. As a consequence, nor Grupo Argos ones. This reflects as a method of participation in the results of each branch, and afterwards, in the consolidated financial results for Grupo Argos. From now on, for example, 31% of the participation of Cementos Argos processes and Summit Materials will reflect in a consolidated financial results through the participation method. Likewise, the asset management business for Celsia, including the Celsia Energía, Tesorito, Laurel, Ocaña platforms that are midsize and large size solar generation, or thermal generation plants. Where we anticipate that a great part of the growth of this branch will happen via the strategy development that we have led from Grupo Argos of associating with the third-party capitals, won't be recorded line and underline in the financial statements of the company. Likewise, the creation of the road and Aeropuertos platform creation, and Odinsa association with Macquarie, the results of these concessions won't be consolidated either in our financial statements. That's why it's so important to consider that the consolidated financial statements only incorporate a minority group of the managed assets of the company. In other words, the revenues and the consolidated EBITDA, don't fully reflect the operational performance of the businesses of an asset manager as Grupo Argos' company. In the upcoming slide, we go over the detail of the changes in the accounting of the company for this 2024. Besides deconsolidating the assets of Cementos Argos in the United States during 2024, that I have previously mentioned, the company records a lower level of revenues in its energy business, given the disinvestment of a great part of its assets in Central America during 2023. Besides, it deconsolidated its participation in Opain and records a lower participation method in Quiport, a result of the creation of the Aeropuertos vertical with Macquarie. There's also an increase in the participation method of Grupo Sura, given the increase of its economic rights disinvestment, and we start recording the dividends that we received from the company. On slides number 10, 11, 12, we present a summary of the contributions to the revenue, to the EBITDA, and to the consolidated net profit, joined with the main considerations and not requiring impacts that have affected this quarter and that have affected the previous quarter also in each one of the segments. The results of the second quarter for 2024 were influenced by the deconsolidation of Argos USA, the deconsolidation after the sale of certain assets in Central America, and the deconsolidation of Opain through the creation of an Aeropuertos platform in the concession business. For midsize, the financial results for the second quarter of the previous year, were impacted both on the consolidated as opposed to the separate, due to the associated profits at the close of the Aeropuertos platform. This represented revenues and gains for Grupo Argos, both for the direct sale of its participation in Opain as because of the recorded profit by Odinsa in this transaction. Because of this, even though we do see a relevant drop in some of the metrics of the financial results of the company, comparing this quarter in an isolated manner with the same period last year, it's important to consider the correspondent adjustments in each one of the segments, both in 2024 as well as in 2023, that are not completely comparable between each other. Likewise, we present a summary of the revenue variation, EBITDA, and net profit in the energy platforms, roads, airports, as well as the total results of cement materials converted into Colombian pesos. These company's investments, even though they're not consolidated into the financial statements, and because of this, are not evident in the contribution by segment to the consolidated value, keep showing very positive operational performance that have to be considered in the value generation of Grupo Argos as a manager of infrastructure assets. Now, I want to invite you to check slide number 14, where we can find our operational results. Cementos Argos have kept focusing in the profitability of its operations, achieving a growth of 3% in comparison to 2023, reaching an EBITDA margin of 21% for this year, which represents an improvement increase of 150 basis points with respect with the first quarter of the previous year, out of the continuous efforts in better price strategies and better, larger expense and cost control. Concerning the investment of the 31% that the company keeps in cement materials, it's important to highlight that the integration of both platforms advances, and it's about to generate $40 million in terms of synergies for this year, of an estimated total of $138 million from run rate that have been communicated to the market in a span of three to five years. The Summit Materials team has reiterated its provision of EBITDA for 2024. Despite the related interruptions with weather, mainly in the Houston market and in the east of the United States, and the moderate conditions in the cement demand, Summit has been able to present solid quarter results. This reflects an advantageous position and geographic diversification and dynamic of the market, and the complementary of the cement aggregate ready-mix, and other construction products. Besides showing or proving the leadership of the company, combined and ready to capitalize the market possibilities of this first economy of the world. Despite the volatility of the market, Summit Materials share has kept an average of $39, considering the average exchange rate of the year of the more over 54.7 million shares that Cementos Argos owns in the company. This is equal to close to COP 6,500 for each share of Cementos Argos. Even though the price share of Cementos Argos has grown more than 150% since the announcement of the asset combination with Summit, we keep observing a significant discount in the valuation that the market allocates to the assets of Argos in Colombia, Central America, and the Caribbean. This operation is besides strengthening with the complementary asset, agreement, sorry, that have come from the Summit transaction that will also allow the increase of exports for this country. Our place, highly flexibility position in terms of finances. We close a multiple of net debt to EBITDA of 2.1 times, lowest one in a decade. Besides this, 12th of August, MSCI announced the inclusion of Cementos Argos asset in the small cap category index. The upcoming 23rd of August, the rebalancing of FTSE will be announced, where analysts anticipate that the company will be included thanks to the increase of its liquidity and the price of its shares. This incorporation into these indexes, joined with the results of the business, anticipate a virtuous cycle for the asset in the Colombian Stock Exchange, we expect that will come closer and closer to a fundamental value of its assets, that high grade that we still see with a very important discount. During the quarter, Cementos Argos dispatched 2.5 million tons of cement and 686,000 cubic meters of concrete in its Colombian, Central American, and Caribbean operations, increasing by 2% and at 1% respectively, compared with the same period the previous year in these different geographies. In the Colombian region, we observed dynamics that were very positive, with an increase of 14% EBITDA and margin expansion of 250 basis points year after year, despite that the total volumes of cement decreased by 5%. Local volumes of cement dropped 10%, while the exports increased a 13%, which compensated partially the reduction of the national dispatches, and improves the capacity that the company has developed through decades in terms at adapting with its solid logistic position to the dynamic of the different markets, where we might articulate through connectivity and logistics, the different natural cycles of these economies. Despite the fact that total dispatches of cement in the country have been dropping, mainly given to a lower residential segment activity, it's important to highlight that the new housing sales have started to stabilize with a positive increase of 10% in the first quarter of this year compared with the same period last year. Despite the sales levels, licensings, and housing constructions are still very low, we anticipate an improvement in the cement dispatches in the upcoming 12 to 18 months if we are able to keep these dynamics as a country. Besides this, in the infrastructure segment, it's relevant to highlight that the main cities of the country have been developing ambitious projects to develop public infrastructure projects in the upcoming four years. This should also drive the cement and concrete demand in the upcoming quarters, starting from projects that are generated and financed in the regions with public resources or through public-private associations. In Central America and the Caribbean, the EBITDA grew 13% in comparison with the first quarter last year, reaching $72 million, with an EBITDA margin higher than Higher than the 24%. We expect that this positive dynamic and the current results will be kept during the upcoming 6 months of the year, bearing in mind the impact and the seasonality of some of the countries in the region. Now, I want to invite you to move on and check the results of the energy business. Thanks to the normalization of the weather conditions of the country, and thanks to the asset portfolio that Celsia counts with, our energy business has showed a recovery in its results in respect with the first quarter of last year, that was importantly affected by a lower generation, given the intensity of El Niño phenomena. The generated hydraulic energy by the energy service business of Celsia grew 19% compared with the second quarter 2023, while the generated energy in the asset management business, that includes Tesorito, C2 Energía, and Laurel platforms, increased 47%. From another side, the controlling net profit accumulated for the year has grown 19% compared with the figures of 2023. In the second quarter, the consolidated revenues reached COP 1.9 trillion, which represents an increase of 22% compared with the same period in 2023. For this year, the revenues accumulate at COP 3.3 trillion with a 7% increase. Consolidated EBITDA was COP 464 billion, experimenting a drop of 4%. Nevertheless, when including the EBITDA in the Celsia investment platforms that, as I previously mentioned, are not consolidated in the financial statements, but coming through as participation methods in the non-operational revenues of the company, the total EBITDA of the quarter would be close to COP 573 billion, being stable in comparison with the same metrics as same quarter last year. The energy generation during the quarter was 1,433 megawatts power, or represents an increase of 9%. This is a relevant increase considering that during the same period last year, Celsia yet counted with the generation of some assets in Central America that were disinvested, and because of this, don't contribute to the generation of this quarter. Now, let's move on to the Odinsa results found in slide 18. The airport traffic keeps showing a notable growth, accumulating 3 consecutive quarters of two-digit increases in our result calls. The Aeropuertos platform has mobilized 50 million passengers in the last 12 months. This is an increase of 16% in respect to the same period last year, from which 44 million correspond to the El Dorado International Airport. Let me repeat this figure. 44 million correspond to the El Dorado International Airport. This is a record figure for this asset that's operating at a full capacity. The extraordinary performance of El Dorado Airport, which traffic grows at 25% compared with the first quarter 2023, reflects the consolidation of Colombia as a very important touristic hub and business hub, and also highlights the competitive position of the Bogotá Airport in order to become a regional hub that will connect all the American continents. The future of the airport sector and for tourism in Colombia is promising, and Odinsa is placed in an ideal position in order to capitalize the value that will be generated. We expect that our private initiatives, such as the IP of El Dorado Max, that seeks to expand the capacity of the El Dorado to more than 16 million passengers a year, and the IP of the Cartagena Airport that proposes the construction of a new airport between Cartagena and Barranquilla are currently being under their feasibility study. They keep on advancing with a good dynamic, and we expect to turn this into a project that we can make in the upcoming years. Let's remember also that the alliance of asset management is 2 years by now in the case of roads, and 1 year in the case of Aeropuertos. The used vehicle to materialize these alliances is a private capital fund, and the results of this keep showing very positive advancements with an appraisal that has been over 27% since its beginnings. The invested capital of distribution metrics, DPI, reaches 0.18 times, which places within the higher quartiles of performance for these types of investments at the age of this private capital fund presents. Now, if to this distributions, we add the value of the pending investments. The metric of this value is the higher value one that's known as the TVPI. That's a valuation over the invested capital. In the case of the capital fund of Odinsa, the projections indicate that this metric will be placed in 1.37 times of the contributed value. These figures proves the profitability and how solid the assets managed by Odinsa are, and this is compatible with the individual return on investment rates that we are reviewing on slide 19 and 20 of the presentation that we're following. Moving on to the operational results of the company, found on slide 19. The road platform closed the quarter with a daily average traffic of 103,000 vehicles. This is stable compared with the same period previous year. The revenues of the concessions for the platform grew 19% compared with the same period previous year, while the quarter EBITDA was placed in COP 150 billion with an 8% increase. The expected TIR of Autopistas del Café at the close of the quarter was 22%, the Túnel de Oriente in 21%, and Pacífico 2 in 15%, and Malla Vial del Meta, still under construction, in 11%. In case of Aeropuertos, which figures are detailed on slide 20, the traffic during the quarter reached 13 million passengers, growing 18% from its size. The revenues and the EBITDA of this platform, measured in dollars, increased 19% and 13% in respect with the same quarter last year. As a result, the expected TIR for Aeropuertos reaches 18%, while Quiport is placed at 11%. TIR being return over investment. In the real estate business, the gross effective revenue was COP 119 billion, which represents a growth of 10% year-after-year, and the quarter EBITDA was COP 65 billion, which also represents a 10% increase. In terms of the same assets for the accumulated year, the operational net revenue for EBITDA grew by 10% and 11% in comparison with 2023. In total, contracts have been renewed for 116,000 sq m and place new contracts for 29,000 sq m until this moment of 2024. At the close of the period, the fund closed with non-hotel portfolio occupation of 96.6%. This represents an increase of 78 basis points compared to the same period 2023, and an increase of 63 basis points versus the previous quarter. In the case of the second quarter of 2023, the logistics and storage sector had a higher increase in terms of revenues, increasing in 19% thanks to the better conditions in terms of contract renewals and better placements that were materialized at better prices. This quarter, the urban development business reached a net cash flow of COP 7 billion, reaching an accumulated cash flow of COP 31 billion for this quarter, which represent 13% less compared with the same semester previous year, given the acceleration from the real estate business. Nevertheless, the results reflect the strength of the urban development business that the company has been making, more specifically in the city of Barranquilla, knowing that its figures are substantially better than the drop in the sales indexes and urban development indexes for the city of Barranquilla. in the period, we made a transfer of three lots, two in Puerto Colombia and one in Barranquilla. This resulted in total revenues of COP 48 billion. This is 19% more than the previous year, and an EBITDA of COP 88 billion. It's important to remember that in the accumulated results for the year, we still see negative total revenues and EBITDA, given an adjustment in the reasonable value in the land lots of Pavas and Barú, which the urban cost was modified, resulting in a lower value reflected in the results of the semester. This drop is purely an accounting drop, and it will allow for more usages of the business, which will also allow to accelerate the sales for the future. In addition, this quarter, Barranquilla Mayor's Office, our urban development business, and Tecnoglass agreed on finalizing an important road circuit composed by Carrera 75A, Calle 98, and Vía 40 North Barranquilla as part of the development plan for 2024-2027. This agreement reassures our commitment of forging alliances in order to develop spaces that drive the city's growth and improve the quality of life of hundreds of thousands of inhabitants in the metropolitan area of Barranquilla. Now, I want to move on to analyze the consolidated debt that's found on slide 25 in order to analyze the evolution of the consolidated indebtedness. In this front, net debt closed in COP 8.7 trillion, with a drop of 29% compared with the same period last year, explained mainly by the positive effect received from the Summit transaction. Likewise, the net financial expenses for the quarter dropped by 12% year-after-year. The separated net debt for Grupo Argos, detailed on slide 28, closed the quarter in COP 1.3 trillion, which represents an increase of 42% compared with the same period last year. This increase is given to the cash and was disbursed for the joint takeover bid, and that was thought for this transaction. For this transaction, the company used COP 4,432 billion in cash without a need of requiring additional indebtedness. That's why when we analyze the gross debt of the company, we can see that it only increases 5% in respect with the same period 2023, going from COP 1.6 trillion to COP 1.7 trillion. Despite the increase of the net debt given to a lower cash, Grupo Argos keeps a net debt indicator over EBITDA, and that's pretty healthy, which offers a financial flexibility closing this quarter with an indicator of 1.5 times more. Despite the disbursement for the takeover bid, the company keeps a solid cash position with investments on fixed income papers close to COP 355 million, which generates a positive carry given that its yields are over the cost of the net debt. With this, I would like to give the word to Juan Esteban Mejía, so he can help us coordinate the Q&A session, where we can take any questions or queries that you might have about the information that has been previously shared. As was initially mentioned at the conversation, we have a great part of our directive board in different businesses. Juan Esteban, please, if we can start the Q&A session. Thank you, Jorge Mario. I will just remind you all that you can ask your questions in the Q&A widget that has been enabled in Zoom. Now we have a couple of questions. Our first question comes from Nelson Bocanegra, and he says as follows: Could you give us the new revenue projection for the group for 2024? Does it increase or does it decrease? For this question, I give the word to Alejandro Piedrahíta. Thank you, Juan Esteban. I would like to start answering. Since the moment that we made the budget for 2024, we had some estimates of what the revenue would be in terms of the transaction for Nutresa. The transaction as well as an estimated profit of the Summit transaction was within the P&L, both for Cementos Argos and was for Grupo Argos. The data as such are relatively aligned with the projection we had. Just for you to have some general numbers. The consolidated projected revenue is close to COP 14 billion compared with the revenue, was 22.6. And why? Well, because of what he mentioned. This year, we stopped consolidating the Argos USA figures. We stopped consolidating from another side, the Central American businesses in the case of Celsia, and we stopped consolidating too, the road vertical that was reflected in 2023. The EBITDA is estimated close to COP 5 trillion. Its EBITDA is very similar to 2023's EBITDA. And how do we compensate this with this lower revenue? This compensated to a larger revenue that we see reflected through the participation method of Grupo Sura, product of the transaction of the Nutresa sale. So we have the lower projected revenues at 40 compared with the 22 that we had last year, but the EBITDA, it is still pretty similar. And the net profit, of course, it is a higher net profit. Last year, we had a 1.5 in consolidated terms, and this year is 7.6 because of this net profit, what happens with the EBITDA, and then what happens with the net profit. These are not operational effects, are product of that specific transaction of some material that is within Cementos Argos, and via participation method, this money comes into Cementos Argos. So our projected controlling net debt is close to COP 4 trillion. This is speaking at a consolidated level. At a separate level, something similar happens. At a separate level, the revenue that we have projected is COP 3.75 trillion. And why? Well, because in the separated one, we received the participation method of Cementos Argos that has the impact of the extraordinary revenue, product of the sale of Argos USA and Summit. So that figure is a significantly higher figure than the one that was recorded in 2023. It obviously has an EBITDA that has a separated effect of COP 7.4 trillion, versus a bit less than COP 1 trillion in 2023. The net profit that we estimate that will be close to COP 3 trillion. That is a bit of the reflection that we have from up top of the extraordinary revenue coming from Summit Materials in Cementos Argos that is reflected via the participation method, versus a separate one. Those are the main figures that have adjustments in respect with the year 2023, as that we have had projected since the beginning, thanks to those two transactions. Well, thank you, Alejandro. In addition, we have another three questions coming from Daniel Guardiola. Let me read one by one, and then we can answer them individually if you think so. First question goes as follows: Could you confirm how much time do you have according to the Superintendencia Financiera de Colombia to advance with the separation of Grupo Sura? Well, thank you, Daniel. I can answer this first part of the question, if you agree. The structure that we have right now is PA and vote inhibitor. This has a duration of three years, as we have mentioned to the market. We have done this because we have a clear conviction that we do not want to be, and we should not be, at the control of Grupo de Inversiones Suramericana. We have this time to evaluate strategic alternatives, execute this in terms that we have already told the market. So we have a time span of three years that are already running. Thank you, Rafael. Second question goes as follows: Bearing in mind that Grupo Argos is the main holder of shares with the right to vote of Grupo Sura, I was wondering if you would take measures to fight against the high leveraging that this company has. Well, let me answer that question, and I am going to be approaching this as follows. Thank you, Daniel, for your question. Within the board of Grupo de Inversiones Suramericana, where Grupo Argos is represented by Alejandro Piedrahíta and by me, both of us are part of that board. We have been evaluating the capital structure that Grupo Sura has. I want to say that this is something that is analyzed as carefully as it deserves within that board, not just about the actual debt levels compared with cash flows. This might be the right time to say, do not present alarming ratios, even though there is an agreement that is important to drop the level of leveraging. The ratios the company has in respect with dividends, gives a strong position that do not generate any alarms in terms of adequate liquidity levels. Nevertheless, there is a consensus in the board and in the administration of the importance of dropping the leveraging levels to the point that has been mentioned. I cannot, and I should not, speak about particular initiatives to reach those de-leveraging levels, because these are obviously confidential, and it would be wrong for me as a board member to take a position as a shareholder right now. What I want to highlight is that there is a structured conversation, ordered and organized conversation, prudent and careful conversation, as the position of this company has always been to have the adequate leveraging levels. There is not an alarm for the short term. Thank you, Jorge Mario. Third question from Daniel Guardiola is aligned with the question asked by Catherine Ortiz from Corredores Davivienda. Let me just group both questions. The question goes or follows: Can you tell us the advancement in the restructuring strategy for corporate structure? This is between Grupo Argos and Grupo Sura, bearing in mind that by this time we should know which route we should follow for this plan. Thank you, Daniel, and thank you, Catherine, for your question. Let me start by mentioning the statement that I have publicly announced previously. We see a transformation of the property structure of Grupo Argos and Grupo Sura, and Grupo Sura and Grupo Argos towards two independent companies that do not have a relevant participation of a cross character between each other. This is a process that we have been working on and analyzing with different advisors that are helping us to look at what could be the best and the way of doing so. Unfortunately, I cannot say which is the route nor which is the execution schedule, given this process requires an in-depth study. It does not just have a society implication, but also capital structure, solvency implications, fiscal implications, where there will be some shareholders that will increase their position. So it is a process that occupies the interest and a very high proportion of our working agenda, meaning by this, of Grupo Argos board, and to whom speaks right now to you all. We have been advancing in analyzing different alternatives. I cannot, right now, choose a specific path or an execution schedule. I want to say that we are working decisively on it, and as soon as the company has a formal position of how the execution will happen, we will share this to the market. Thank you, Jorge Mario. We do not have any additional questions for the moment. I just want to mention once again to all the shareholders and others that are following, any additional question, we can attend via the investor relations unit. Okay, we have an additional question coming from Catherine Ortiz. In respect to the road concession business, as you know, these days, there has been a discussion about toll or price increase. Can you tell us about your perception in terms of this price adjustment? Okay, I think Mauricio, you mentioned this is good news about this price adjustment, and there are certain expectations. Mauricio, if you can answer this question. Thank you, Jorge Mario, and thank you, Catherine, for your question. Effectively, the announcement of toll increase is a reality. This increase happened the 2nd of August, was 1st or 2nd of August. This is an adjustment of half of the inflation for 2023, was 4.69%. It was done on all the Colombian concessions, and the expectation that we have, according to the conversations that we've had with the government, is that before the end of the year, we would do the rest of the increase. We would level inflation in such way that parting from January 16, it has been specified in the majority of the contracts, there will be an increase that corresponds to the respective inflation that we will have for 2024. Having said that, and mentioning that's good news, that's a fraction of depending inflation, but it's following a path to close this gap. It's worth to mention that in the particular case of Odinsa, the increase of 2024 in Autopistas del Café and in Túnel de Oriente was made as it corresponded in the contracts. Meaning by this, we didn't have an expectation in terms of inflation. In the case of Malla Vial del Meta, yes, it corresponds to 4.69 closing of a gap. In the case of Pacífico 2, due to the modality of this contract, in virtue that it has this element called collection differential, we have been collecting at the end of the quarter the respective increase after a decreased zero repeat was established. The position of Odinsa in terms of the inflation adjustment is the least than a usual concessionary due to the mix of concessions that we have in terms of first, second, third generation. Well, thank you, Mauricio. We've been having additional questions. We have the next question coming from Sebastian Gallego from Ashmore. Good morning. Several questions complementing Daniel's and Catherine's question. The process of the new structure, it takes some months, sometimes a year, or even several years. Can we have a bit more light or information on this? Well, yes. I would like to say that, as I previously mentioned, this is a fundamental transformation for the future of these companies. That's why we need to be agile, and we need to be as clear as we can. But also, bear in mind that the moment that we select a definition, we have to be sure that we have covered all of the different possibilities in terms of taxation, equity, shareholder. But also to chanting the equity story of the company towards the future. This is not a easy process. I don't want to sound as if I'm giving excuses. I want to answer the question. I believe this is something that we want to have a better information during the rest of this year, I hope, and being able to share to the market an important investment during 2024. But within the range of the three options that Sebastian mentions, months, years, or many years, I'd place this between two first options, between months and years. Not many years, but I would say months and one year or a few years. Thank you, Jorge Mario. In addition, Sebastian Gallego asks, when do we expect to have the breakdown of Sociedad Portafolio? Let me answer that question. Sociedad Portafolio has been dissolved since July of this year. It has been following a liquidation process. The specific date, we'll have to ask the Sociedad Portafolio, where we have shareholder participation. But the information that the Sociedad Portafolio has offered the shareholders in the July shareholder assembly, they were expecting for the liquidation to happen before the end of the year. This liquidation, they have shares of Grupo Sura, shares of Grupo Argos, and probably some cash flows coming from this dividend have been paid by both. Let's hope that before the end of the year, Sociedad Portafolio announcing this, and we can receive the assets coming from that liquidation. As Jorge Mario mentioned previously, us expecting the situation 31st of July, we held an extraordinary shareholder assembly, where we destined, reserved COP 240 billion in order to receive our own shares from Grupo Argos that will be given to us during liquidation of Sociedad Portafolio. Thank you, Rafael. We have the next question from David Gutierrez in relation with the Grupo Argos leveraging. It goes as follows: What's the treatment that you have for the due dates of 2024? In addition, we're also asked about the expectation of the financial endowment for the end of the year. For this part, I want to give the word to Alejandro Piedrahíta, who is the CFO of the company. Thank you, Juan. We have two important things here. If we look at in terms of due dates, in 2024, we have COP 194 billion. For 2024, we have COP 199 trillion. If we add this, we have COP 448 billion. We have COP 700 billion that will be expired in these 2 years. This 2024 due date for COP 235 billion, what we'll do is, we'll do a rollover for this debt, and we are seeing what is the most efficient structure from a financial cost for the group. Fortunately, today, we have enough capacity to require two national and international banks, as we've done in the previous year. Besides this, we have a AAA rating, both by Standard & Poor's and Fitch, which allows us to go to the capital market, and in a certain moment, depending on the conditions, if we issue a bond or if we would go more for commercial papers. So what we'll do is a rollover, and we are seeing what is the most efficient mechanism. From debt estimation, this makes that in our estimations, we're closing with a debt that will be between COP 1.6 trillion to COP 1.7 trillion closing 2024. Well, thank you, Alejandro. Following the order of the questions that we are receiving, we have the upcoming question from Catherine Ortiz. Oh, thank you. Palaz, what do you expect from the behavior of the rest of the year for the cash flow of the urban development business? Do you consider if this will keep on dropping? María Clara Aristizábal, urban development business manager, might help us with this. Hello, Catherine. Thank you for your question. For this year versus the previous year, we had a record year. We do expect a slight decrease, but nevertheless, will be over COP 200 billion in terms of revenues that we've had in the last years, and that we expect to keep having in the upcoming years. Thank you, María Clara. Sebastian Gallego from Ashmore asks the following question. In terms of capital allocation, in terms of the sales purchase, can we speak more about this? Because we see a Celsia valuation similar to levels of 2015 in terms of price to a good value, while Grupo Argos and Cementos Argos are still undervalued. Is it worth keeping on repurchasing Celsia shares, and why don't we give a better usage of these resources? Thank you, Sebastian Gallego, for your question. I would start from the positive aspect. Obviously, it makes sense to keep on acquiring Cementos Argos shares and Grupo Argos shares because of the reasons I explained during the conference. When you look at a share, like a Grupo Argos share, only the value in the stock market, without considering the consensus of the value of the allies or the Summit Materials shares, represents COP 6,500 versus Cementos Argos at COP 8,400, COP 8,500. Clearly, there is a very important discount in the value of that asset in respect with fundamentals. Because of this, it is a signal of reacquisition of our own shares. For treasury shares, it's a good signal in terms of capital allocation, but also a signal to the market of the fundamental decoupling between the price of the share and the value of the assets. The same situation happens when you integrate the sum of the parts of the assets of Grupo Argos, as we were explaining previously. Its equity has been growing importantly and close to COP 19 trillion. This sum of the parts also show a decoupling between the fundamental value of Grupo Argos in respect with its value in the share market, when you sum the listed assets plus the fundamental values of the non-listed assets such as Odinsa or the urban development business, among others. So that the start from here makes all the sense. In the case of Celsia, I would say that the fundamental value that we estimate further than the price value relation is still higher to the one that we are negotiating the share. When we compare this with evaluation of the operational assets plus the platforms, plus the value we have in the platforms, as it was explained in the conference, are not clearly seen in the consolidated figures of the Celsia operation, nor in Grupo Argos, there are very important gaps. This is the fundamental reason by which we are inclined to keep acquisitions. Having said that, the board of the company in Celsia is constantly monitoring the market conditions, how these gaps open or close, and when the authorization that the board has, measures are taken to increase the usage of alternative mechanisms or alternative transactions. Right now, we're speaking of transactional ones that have a very low volume in terms in investment for reacquisition. But clearly, the board will keep on monitoring the performance of the fundamental value and the share price in order to know if we should accelerate or not the reacquisitions. I need to say also, that's also fundamental, and this capital allocation analysis, this holistic view that we're making in a company such as Celsia, in order to be sure that we simultaneously attend the capital requirements in order to fund the growth projects, what has been done in an accelerated manner without no restrictions in platforms or in the generation assets that the company directly administrates, in order to achieve adequate indebtedness levels. The ratios for Celsia in terms of indebtedness are still healthy. So an adequate balance between capital investment for growth, maintenance, and development of the businesses in terms of debt reduction and simultaneously return to shareholders. The reacquisition is a very small portion that is being used today, but it is an important part of how to drive these three different aspects simultaneously. Okay, last question. For the moment, we have an additional question coming from David Gutierrez, and it goes as follows: What are the estimations for the CapEx investment for 2024? Alejandro, this is your question. Thank you, Juan. The CapEx investments, the right thing would be to divide them by company. The total estimated CapEx that we have in the market is close to COP 3 trillion, approximately. Those COP 3 trillion, in Cementos Argos, we have a bit more than COP 500 billion. Celsia is close to COP 540 billion. In the case of Odinsa, another COP 550 billion, and in the urban development business, a bit more, at COP 400 billion. This is more or less what we have estimated at total CapEx level. I would like to emphasize, something related to the CapEx. This CapEx is not generating an important leverage for the businesses. This CapEx is more with the cash. It comes from the businesses. And proof of this is the estimation, and the estimation that Jorge has been mentioning during the call, reduction in terms of gross debt in the company in a consolidated manner. We have an estimate of COP 13.5 trillion to COP 9 trillion, which shows a significant leveraging in a consultative manner, and this is also reflected in the financial expense estimation that we have due to a less debt stock, and also to the indicators in terms of leveraging, going from 1.8 to COP 1.4 trillion as a CapEx, that is mainly financed with our own cash. Well, thank you, Alejandro. We do not have any additional questions for the moment. Any additional questions we can answer afterwards via chat or email, or via the official channels that the company has. Okay. Thank you all for being with us here. I want to reiterate and reinforce Juan Esteban's message, that we are all open to answer any doubts, questions or queries that you might have, any analysis that you want to make. I want to thank you once again for being with us. Thank you for your questions, and I hope to see you in a future opportunity. Thank you.