Earnings Call: Q3 2023

Nov 10, 2023

Good morning to you all. I want to thank you for your assistance today. Today we will be presenting the financial results for Grupo Argos for the end of the third quarter 2023. On this page, we have Jorge Mario Velásquez, President of Grupo Argos, Alejandro Piraquive, Strategy and Corporate Finance Vice President, Rafael Ribeiro, Corporate Finance Vice President for Grupo Argos, Mauricio Ossa, President of Odinsa, María Clara Aristizábal, Manager for the Urban Development Business, Pablo Arroyave, Vice President of Corporate Finances for Odinsa, Felipe Aristizábal, Financial Vice President of Cementos Argos, and Andrés Bejarano, President of Pactia. I want to remind you all that on our website, we can find all the information for this quarter together with the presentation that will be following during this call. To download it, you can access Menu, Financial Information, and afterwards, Reports. Besides this, we are also transmitting this via X, previously known as Twitter. To begin, I want to invite you on to move on to slide number 3. Now, I want to give the word to Jorge Mario Velásquez, President of Grupo Argos. Thank you, Juan Esteban. Thank you all. Warm greetings and good morning. I wanted to reiterate our thanks for being with us today. During the third quarter of this year, besides presenting solid results, Grupo Argos announced a transformational milestone for its history of growth and value transformation. Cementos Argos agreed on combining its operations in the U.S. with Summit Materials. In 2005, the cement business entered the U.S. market with a strategic long-term vision, establishing a relevant player of the construction material industry in the first economy of the world. Product of the agreement that was made public last September, the combination of Argos USA and Summit Materials will give as a result, a company that will become one of the largest construction material companies in the U.S. and listed in the New York Stock Exchange, in which Cementos Argos will have a participation that is equal to 31% of its capital. This is, without doubt, a strategic movement that opens the doors to new opportunities within the U.S. and that also values our operations in around $3.2 billion. Cementos Argos will contribute with its operations valued to a multiple of EV/EBITDA expected for 2023 of 10x. Enterprise value multiple of approximately 12x considering the EBITDA generated during the last 12 months, capitalizing its investment through a liquid entity in the New York Stock Exchange and generating value to all its shareholders within this Grupo Argos, very importantly. In addition, the transaction represents the entrance of $1.2 billion in cash, from which $700 million will be used to pay the debt of the operation in the U.S. and $500 million in cash that will enter Cementos Argos. That will reduce the net indebtedness in Colombia and will give a larger flexibility in order to advance with strategic projects. This combined entity will count with more than 5.5 billion short tons of aggregates, equivalent to more than 90 years of reserves, giving an immediate exposition to the company to an aggregate sector by which the market usually recognizes valuation multiples higher than those mainly cement companies. In addition, the company will have 11.8 million cement tons of installed capacity, 224 concrete plants, 32 asphalt plants, and will become one of the most important companies in the sector with an estimated valuation of $8.9 billion, according to the stock price of Summit Materials at the end of the transaction. At the value at which the Argos USA assets are being contributed, if this new combined company would list in the Colombian Stock Exchange, it would be the second in terms of capitalización bursátil, only behind Ecopetrol and with a valuation of approximately COP 36 trillion. In this combined way, these two companies would generate a pro forma EBITDA close to $1 billion, including estimated synergies of more than $100 million in incremental EBITDA. In addition, the operations of Cementos Argos in Colombia, Central America, and the Caribbean will be strengthened by a series of auxiliary agreements between both entities and with a larger flexibility in its capital structure, given the received cash. From a market perspective, the transaction announcement, Cementos Argos had a capitalización bursátil close to $1 billion, which means that this investment, it is equal to more than twice this value, without even bearing in mind the valuation of the Colombian, Central American, and Caribbean assets, which contribution to EBITDA, it is equal to close to the half of the consolidated result of Argos USA. Sorry, from consolidated Argos. From the moment the announcement has been made, ordinary stocks of Cementos Argos had experimented in a price rise of more than 60%. Nevertheless, we consider that actual listing in the Colombian Stock Exchange still does not reflect fully the intrinsical potential of this transaction. The combination of Argos USA with Summit Materials adds to the recent achievement that we have traced in our strategy, and that includes the confirmation of the roads and airport platform with Macquarie Asset Management, the largest infrastructure asset manager of the world. Besides the advancements of those generation transmission and distribution of energy vehicles, which represents the tangible materialization of our vision with infrastructure asset managers and the recognition and trust within world quality players, due to our experience, management capacity, and operational capacity. Before moving on to the consolidated results of the company, I would like to mention the advancements that have been happening in the transaction in order to transfer our investment in the food business from Grupo Nutresa. In exchange of Grupo Sura and Grupo Argos shares, which was announced to the market last 16th of June this year, Grupo Argos has been advancing in the materialization of this agreement, in between with the paperwork required with different government authorities and with other countries in the region. We are fully committed in trying to make this move as fast as it can. In this sense, we continue advancing in another amendment agreement, for exchanging Grupo Nutresa shares, which we have communicated last 15th of September through the relevant information mechanism, which are orientated to make the perfectioning of the operation much faster. For this, we speak of making direct exchanges of shares of Grupo Nutresa and for Grupo Sura shares and of the Sociedad Portafolio. This is the entity that will benefit from this split, and will keep on being the holder of the share portfolio that Grupo Sura has and Grupo Argos has, that at the moment are part of Grupo Nutresa, instead of using an autonomous patrimony for the exchange and distribution of shares. Second, allow that if Grupo Argos and Grupo Sura do not acquire in this public offering the shares of Grupo Sura, all those necessary to complete 87% of the share participation, they can make the payment for the value of $12 for remaining action, which corresponds to the same value by which the public acquisition offers will be made for the rest of the shareholders of this society. Third, make a share exchange in two phases. Once we've perfected the division, we'll have a first exchange of the shares of Grupo Nutresa owned by Grupo Argos in exchange for Grupo Sura shares and Sociedad Portafolio. Once we've perfectioned this acquisition public offer, we'll exchange the Grupo Nutresa shares acquired in this acquisition public offer, and eventually, we'll make a cash payment in order to receive in exchange the remnant shares of Grupo Sura and Sociedad Portafolio. That will be now in power of new shareholders, and that way, stop being shareholders of both societies in the same terms that have been specified in the frame agreement. Fourth, we must remember that this public offer of acquisitions for Grupo Nutresa will be done jointly by Grupo Argos, Grupo Sura, and an entity designated by IHC. In such way that Grupo Argos and Grupo Sura will offer acquiring a pro-rata of its participation in Grupo Nutresa, 10.1% of the shares, with money or with the mix of shares and money, in a combination of shares of Grupo Sura and Sociedad Portafolio. The design entity by IHC will offer to acquire in money the rest of the shares that might be over this average, equivalent to 13%. Last September 18, there was an extraordinary assembly of the Grupo Nutresa shareholders, where we approved the symmetric division of this project. The division of Grupo Nutresa in two companies, Grupo Nutresa Alimentos and Sociedad Portafolio, will be perfection one all the government approvals are accepted. Likewise, we expect that a first exchange that has been contemplated in this modification of the framework agreement will happen before the end of this year. In respect with the shares that Grupo Argos will have in Grupo Sura, product of this transaction, and of its historic investment in the society, the company is working currently with Bain & Company, which is a strategic consultant, a first-level strategic consultant, in order to trace the route map that will allow to generate the best options that will generate the highest possible value for its shareholders, preserving the positive externalities that these companies generate in equilibrium with all its groups of interest. Moving on to the consolidated financial results for the third quarter, Grupo Argos was able to keep a positive trend, in particular in its cement business, in the real estate business, and in the energy business, translating this into a solid growth of its main consolidated values. Revenues closed in COP 17 trillion, growing at 9%. EBITDA closed in COP 4.4 trillion, growing at 13%. Net profit closed in more than COP 1.4 trillion, growing at 33%. Net profit of the controller closed in COP 908 billion, growing at 56%. All this happens despite a considerable increase in the financial expenses in respect with the previous year. In the separated financial results, as well as in the consolidated results, we recorded favorable results. Product of a great performance in all our investments, as well as the perceived revenue due to the sale of Grupo Argos Opain, after the closure and materialization of the road vertical and airport vertical with Macquarie. The accumulated revenues for the year reached COP 1.3 trillion, EBITDA closed in COP 930 billion, and the net profit in COP 822 billion. Figures that more than double what has been recorded in the same period last year. This profit, achieved in the separate financial results in the first nine months of the year, is equal to more than COP 900 per share, and evidences the capacity that Grupo Argos has in terms of value generation for our shareholders. Now, I want you to move on to slide number 11, where we will be going over the results of our businesses. I will begin with Cementos Argos. In respect with the actual state of the agreement with Summit Materials, last October 23rd, the Hart-Scott-Rodino law, it came to a final period, which means that there were no requirements from the competition perspective. So in that chapter, that chapter is counted within the pre-requirements in order for us to advance in the formalization of this agreement. We are also waiting for the authorization of the Securities and Exchange Commission in the upcoming weeks with the intention of submitting under rotation in the Summit shareholder assembly, the final agreement, and close this transaction as fast as we can. Further than this transaction that represents a historical milestone for the company, the Cementos Argos result in what has happened this year are extremely positive. During the third quarter, the cement business of the group kept on delivering results, focusing on profitability and on margin recovery. The results were driven by a very strong price dynamic in all our regions, combined with cost and expense efficiencies, which made possible an expansion of almost 500 basis points compared with the previous year in the EBITDA margin that closed in a historical level of 24%. Given the results of this first nine months of 2023, that add a total of close to COP 2 trillion in terms of EBITDA, the third quarter, Cementos Argos had already achieved 85% of its guidance, by which we decided to increase the EBITDA guide in a range of COP 2.45 trillion-COP 2.55 trillion as EBITDA guide for 2023. Moving on to the results of the quarter. The results of the cement business reached COP 3.1 trillion, maintaining stable compared with the same quarter last year. While the EBITDA closed in COP 722 billion, growing at 23% year-after-year. This is clear evidence of the value focus that has led Cementos Argos. In terms of operational results for the quarter, the volumes reached 4 million tons, while the concrete business registered 1.7 million cubic meter volume lower than what had been reported last year, but with a commercial strategy that is focused on segments that offer a larger profitability for the company, keeping the expansion, caring for the expansion. The results are particularly favorable in the U.S., where we can concentrate more than half of the revenues for the EBITDA of the company. It has gone through the year, we have grown 11% in terms of EBITDA and a 42% leveraged in the positive dynamic in commercial segments and in infrastructure segment, as well as a healthy dynamic in terms of prices in the sector. We also want to highlight the behavior of the Colombian exports, which keep growing at 10% in tons of cement compared with the same quarter last year, 2022. We also need to remember that with its plants in the Colombian Caribbean, such as Cartagena and Tolú Viejo, both with access to ports, our cement business has, with a great export capacity and with a great capacity of connecting with the geographies that show the largest growth in the American continents. Now, I want to invite you to move on and look at the results of the energy business. We began our chapter in energy production on that announcement that Celsia gave in August, going into a new geography in the continent. The company will take its operations to Peru with the acquisition that we did from Grupo Ibereólica Renovables, coming from the wind project Caravelí, with an initial capacity of 218 megawatts. The project is right now in its pre-construction phase. It is located in Las Lomas district, in the Caravelí province in Arequipa, where other wind generation plants are already operating. The diversification of our international presence is news that fills us with enthusiasm. Peru is a country that has very interesting opportunities in the sector, with lots of things that are attractive for these types of projects and with additional possibilities of growth in order to deploy towards the future the portfolio of the Celsia businesses. The total value of the project is estimated at $240 million and will count with the latest wind generation technology. The execution of this new investment in Peruvian territory will be framed under our consolidation strategy, such as alternative asset manager, where we will use resources such as our own, as well as third-party resources in order to make the capital investments that are required by the project. The operation will start or is thought to start in the second semester 2025. In order to make the execution of this more agile, we will use equipment and agreements with suppliers that we had previously contracted for the projects that have had delays in La Guajira while we move on forward the licensing and inquiry processes in these regions of Colombia. From another side, in respect with the advancements and the close of the transaction that we announced at the end of the second quarter, based on the sale of some assets in Central America, last week, Celsia received the financing note of EFAC that accelerates the process of closure of the operation that is expected to be happening during November. The company will receive for its share participation, these sold assets close to $194 million, and we will see, at the same time, a reduction in indebtedness close to $198 million. It is also necessary to mention the effects of El Niño phenomenon that feel stronger in the regions where we are present. In the quarter, the water contribution to the national interconnected system were under the historic average, closing the quarter over 57%. Our water energy generation has dropped attending the climate situation. At the same time, our thermal plants have had special protagonism, delivering reliability, efficiency, and responding to its applications in the measure that it has been required. This proves the importance of having a balanced portfolio such as ours and a responsible policy of contracting and maintenance that has prepared us for the situation. Moving on to the operational results found on slide number 14. You can see the consolidated revenues, which reached COP 1.5 trillion during the third quarter, growing 14% year-over-year. EBITDA closed in COP 414 billion, stable compared with the same period last year. If we add to this the generated EBITDA by our platforms, which with the Caoba expansion, Celsia Energía, Laurel, and the Tesorito start of operations, the EBITDA with platforms for this year, will close in COP 1.8 trillion, growing 15% compared with the first nine months of 2022. Caoba, the platform that invests in transmission assets in Colombia, registered a growth in its revenues of 28% till September and 27% in terms of EBITDA. From its side, C2 Energía obtain revenues for COP 88 billion, with an EBITDA of COP 76 billion. From its side, El Laurel, a solar platform that has small projects, counts currently with 84 photovoltaic systems and adds COP 9.8 billion in terms of revenues. The thermal plant, Tesorito, has grown importantly in this quarter in terms of renewable generation portfolio and in terms of natural gas energy generation. Given the El Niño phenomenon, its accumulated generation reached 427 gigawatts hour, delivering an EBITDA of COP 112 billion in these first nine months of the year. The generated energy for the period closed in 1,254 megawatts hour. This is a reduction compared with the same period last year, which is mainly explained due to a reduction, as I already mentioned, in the hydraulic generation under the current weather conditions. Now let us move on to the concession business. Roads and airport concession business that has been managed by Odinsa, that you can see on slide number 15 of this presentation. We want to highlight that besides our good operational results, this quarter had a special achievement. The 12th of October, we brought back to operation El Alambrado Bridge. The construction of this infrastructure, that is part of our concession in Autopista del Café, was achieved in only four months, which normalizes the operation of this road corridor in a structural and permanent manner. The concession has been making different strategies and initiatives with the clear conviction of offering support to the neighboring communities that suffered due to the collapse of this bridge. Donations such as infrastructure and work material, support in terms of food, also delivering drinking water filters for the population, between others. I also want to highlight that is how our concession keeps complying with its commitment of contributing value to the region with leading projects in pro of well-being, mobility, economy and the environment. Likewise, we want to highlight that the 2nd of October, Odinsa made the payment of the issued bonds in 2020 for a value of COP 280 billion, generating an important debt reduction for the company and strengthening even more its capital structure. Moving on to the operational results of the company. This quarter, the daily average traffic for the road platform slightly dropped due to the reduction of the traffic in Autopista del Café, due to the situation that we've previously mentioned with the Alambrado Bridge that will normalize once this bridge has come back to operation. From its side, the airport traffic keeps on improving. The passengers mobilized by the airport platform reached 12 million in last quarter, grown 10% year-after-year. We want to highlight the good dynamic in the key port traffic that allowed a year-to-year growth higher than 22%. In the real estate business, Pactia gross effective revenue was of COP 113 billion, growing 10% year-after-year, and the EBITDA for the quarter was COP 60 billion, with an increase of 14%. After adjusting and due to these investments, the gross revenue and the EBITDA grow 11% and 16% respectively. In terms of the same assets for the accumulated year, the operational net revenue and the EBITDA grew at 19% and 22% compared with 2022. In total, contracts were renewed for 31,000 square meters and new contracts were placed for 21,000 square meters for what we've covered this quarter, 2023. At the end of the period, the fund closed with a non-hotel portfolio occupation of 97%, a reduction of 65 basis points compared with the same period 2022, and an increase of 90 basis points compared with the previous quarter, which keeps itself in very healthy levels. The sector that showed the largest growth was the hotel business, closing with an average occupation of 60.3% and an average rate of COP 282,000. The RevPAR, or revenue per available room, was of COP 170,000, an increase of 16% year-after-year. Nevertheless, 2023 has proven to be a more challenging period, due to the increase in the VAT, the increase in the plane tickets, and the situation generated by the modifications of some of the routes, due to the closure of some low-cost airlines. In terms of freight, specifically the shopping malls of Gran Plaza, we want to highlight the good behavior in sales, which exceeded the expectations, and led to an increase of variable profit of 18% compared with the same period last year. Now, I want to invite you to move on to look at the urban development business, which is found on slide number 20. In the quarter, our urban development business showed favorable growth, growing 29% in terms of accumulated cash flow in respect with the same period last year. We want to highlight the signature of two promise of sale, one in Barú and one in Barranquilla. In the period, we recorded revenues for COP 80 billion. This is 170% more than the previous year as an EBITDA of COP 21 billion. In terms of the year's accumulated value, revenues add COP 211 billion. This is an increase of 45% year-after-year, and EBITDA of COP 70 billion, which represents an 81% growth compared with the previous year. Despite the situation of the market, where we see a drop in the sales of the country, we still see a great appetite for the products that we offer. At the same time that we keep on working for looking new business opportunities in order to comply with the objectives that the urban development business generates, given that it generates more resources for the shareholders of Grupo Argos. I want to invite you to move on to the consolidated financial results and separated financial results for the group. For this, I want to invite you to move on to slide number 22. The revenues reached COP 4.8 trillion during the quarter, which represents a drop of 5% compared with the same period 2022. EBITDA reached COP 1.3 trillion. This is stable year-after-year. Likewise, the controlled net profit of the period closed in COP 190 billion, also relatively stable compared with the previous year. On slide number 23, we could see the variation of the contribution of each one of our businesses in terms of revenues, in terms of consolidated EBITDAs. In these graphs, we could see a greater contribution of the real estate business and in the energy business in terms of revenue, thanks to its great operational performance, as well as a significantly higher contribution in our cement business in EBITDA, due to its excellent results in what has been covered this year. From another side, we could see a lower contribution in terms of the concession business, in terms of revenues, where from this quarter, we could see the breakdown of the financial results of the airport assets due to the closure of the airport vertical with Macquarie. Nevertheless, as I mentioned in the operational comments, the dynamic of the businesses is extremely positive. Now let's move on to slide number 25 in order to analyze the consolidated indebtedness evolution. The consolidated net debt of Grupo Argos closed in COP 12 trillion, 4% less than the same period last year, despite a net debt that drops given the increase in the interest rates. The net financial results increased 23% year-after-year. In separated financial results, you can see on slide number 26, as well as the consolidated results, we recorded positive results. The quarter revenues closed in COP 270 billion, EBITDA closed in COP 167 billion, and the net profit closed in COP 118 billion. All these growths represent more than 40% in respect with the same results of the same quarter last year. Thanks to the cash position that we closed this quarter with, the separate net debt of Grupo Argos that's detailed on slide number 29 closed in COP 710 billion, with a reduction of 36% in respect with the same quarter last year. The cash position of the company at the end of September was more than COP 900 billion, which grants a great flexibility to the company. For the operations that shall be carried out under the framework of the transaction, we'll be exchanging shares of Grupo Nutresa for Grupo Sura and Sociedad Portafolio. The cost of the debt of Grupo Argos keeps on dropping, being at 9.9% at the end of this period. This is 210 basis points less than at the close of 2022. Looking at the trend of the IPC, we hope for this trend to be maintained, which will be of great support for the financial expenses of the organization. They have increased significantly in the last year, as I already mentioned, despite the drop of the debt stock. In addition, during this quarter, the company kept executing actively its share repurchase process, a measure with which we want to reassure the trust that we have in our business plan and the strategy that we have been executing from Grupo Argos in all its companies. Up to date, the company has repurchased close to 4 million ordinary shares and more than 750,000 preferential shares. The expansion and the growth of Grupo Argos would have not been possible without the Barranquilla development story, a city with which we are intimately linked in many of our business lines. Because of this, we are proud of being part of the transformation of the city. Today, we want to highlight two recognitions that our company received under the framework of the activities that our urban development business place. From one side, Realismo Mágico Park received a recognition in the category of urbanism works as an award for sustainable architecture and excellency. This Realismo Mágico Park was designed and constructed in October 2022 by the urban development business of Grupo Argos, the Barranquilla Mayor's office, the District Infrastructure Agency, and Siempre Más. It offers more than 10,000 sq m and a cultural vocation. Since its inauguration, more than 7,000 people have benefited from an offer of 145 activities around entrepreneurship, culture, physical health, and mental health. This is a true milestone for the appropriation of public space. From another side, I want to share with you that the urban development business also received the award of National Social Responsibility for 2023, given by Camacol, due to its project of Reciclemos Juntos or Let's Recycle Together. It's an initiative where we benefited more than 18,000 inhabitants and visitors, in which we have the participation of 150 recyclers, which have recovered more than 100 tons of waste during the last 16 months. This has contributed to the formalization of recyclers, which in the majority are people found in extreme poverty, and going from people with no revenue alternatives, becoming entrepreneurs, business partners, and right now they have a better revenue, and they have access to education and training, information in order to have a dignifying life. This recognition reassures that the construction of sustainable cities is only possible when in the process we articulate the interests and wills of the communities, of the public sector, and the companies. Finally, I want to share with you our guidance for what we have for the rest of 2023, where we keep the communicated figures at the beginning of this year. We hope closing 2023, increasing our consolidated avenues for COP 22 trillion and an EBITDA of more than COP 5.2 trillion. Now, I want to give the word back to Juan Esteban Mejía, so we can move on with the Q&A session. To you all, thank you for being with us. Juan Esteban. Well, thank you, Jorge Mario. I want to remind you all that you can ask your questions in the Q&A session that has been enabled in the Zoom platform. Our first question comes from Juan Camilo Jimenez. Good morning to you all. Thank you for the information. Are you considering to use a repurchase mechanism, the same as Grupo Argos announced in previous days? When are you expecting to have the results that are being done? Okay, let me try to answer both questions, and maybe Alejandro and Felipe can complement, and Israel and Rafael Olivella are also with me here. The repurchase program, as I mentioned during the call, it's a strategic priority that we have defined at a business group level. It has two main purposes, as it was also mentioned. The first one is the materialization of the conviction that we have in the long-term business plan that we have, that unfortunately, this is not reflected in the value in the share market. It's a series of measures that are focused in different magnitudes and mechanisms in each one of the companies in becoming an active player in the share market in Colombia. Being a player that can grant to the market the possibility of having a liquidity for those shareholders that don't have options. We've been advancing, not just in Grupo Argos, but also in Cementos Argos, as we announced, and Celsia has also been studying and structuring a program that has been approved by the shareholder assembly of that company. We've acquired around 4 million shares and 775,000 shares, preferential shares for Grupo Argos, complying with the balance for all the shareholders within the different types. This policy will keep on happening. Right now, the reacquisition is suspended in Grupo Argos due to the regulation of the stock exchange that regulates these purchases in a certain period of time before the presentation of the results, as will be happening today. This will keep on happening. The amounts, the magnitudes, and the mechanisms are all open and to be used. Cementos Argos has announced a mixed mechanism, using traditional mechanisms and purchases in blocks of close to COP 20 billion, that will be starting their operations in few time. We do believe that these are important mechanisms, but the conviction, the capital allocation, and the habilitation of several mechanisms will keep on doing. The amounts and the quantities are different in each one of the organizations, and clearly depend, not just on the cash situation, but also in the authorizations it has and in the future usages of compromised resources. As I mentioned in the call, the cash situation of the company is pretty comfortable right now. But as we mentioned, we have the closure of several operations, such as the share exchange that we'll be having with Nutresa for Grupo Sura. That might require a certain amount of cash that might oscillate between COP 60 million to COP 50 million to COP 140 million, depending on the amount of shareholders. And those that we cannot exchange, we will have to purchase cash besides the taxes that we had to pay for previous years. We still have the cash to do that reacquisition. Cementos Argos also. Celsia probably will announce its reacquisition mechanisms. And we keep under this conviction that the business plan is extremely powerful in all the companies of the group, and in the measure of that conviction and in a better capital allocation, we will keep on trying to maintain the dynamic in terms of share reacquisitions. In terms of the second question, as we mentioned before, we are working on all the strategic initiatives that the company might have, coming from the fact that once we consolidate the share exchange, Grupo Nutresa is removed from our portfolio, and there is going to be a relevant increase in the participation of Grupo Argos in Grupo Sura. That, as I also mentioned, part of these shares, mainly ordinary, will be taken to the patrimony or the equity. Nevertheless, we have some shares that have a very important economic value in this conglomerate. The idea is to map all the possibilities that the organization has, compare with other countries and see which would be the best scenario in order to maximize the value of our shareholders and transfer the largest amount of generated value to our shareholders and maintain all the externalities that this organization has over different groups of interest, being employees, collaborators and suppliers or society in general. We expect to advance decisively for the rest of this year and for the first quarter 2024, have clearly established a route map that will be submitted to the approval of the required instances that these companies might require. Okay, perfect. We also have three questions following the same line. We have a question from Catherine Ortiz, Juan Camilo Daud, and Leonardo Otero about the decree and resolution of the Transportation Ministry in terms of the increase in the toll payments, and how would this apply for private initiative concessions. Thank you, Leonardo. Thank you, Catherine. Very good question. I will give the word to Mauricio Ossa. Mauricio, being president of CCI, has a better context, not just in the short-term implication, but also how this affects our assets. And obviously, we have a different regime from public-private initiatives. Mauricio, can you help me with this answer? Of course, Jorge Mario Velásquez. Good morning to you all. Let me start, if you allow me, Juan Esteban Mejía. I will try to answer in a crosscutting manner. I start by saying that this resolution, this decree, that we estimate should be signed between the 20th and 24th of November. We are still a week before. This decree, we need to understand as the signal that was missing for the financial sector in order to keep on financing the infrastructure projects. In that sense, this is very positive. In its detail, the value of the toll is recognized as the source of payment. The indexation is recognized as a contractual commitment, and the adjustment is recognized as a formal delivery of the functional units. This is going to be a gradual process, and this will happen in December. What is expected is that in December we will have the inflation correspondent for this year, meaning by this 13.2. We hope that in January, we will do the inflation adjustments that happened during 2023. And up till July 2024, all the rates should be normalized. The only thing that would be missing is that adjustment that makes reference to the total delivery of a functional unit. We believe that this gives a clear signal that normalizes the toll as a source of payment, and normalizes the contracts. From Odinsa's point of view, I want to mention something that we have previously mentioned in previous calls. From the 24 road concessions, in two of these, Autopista del Café and Túnel de Oriente, the adjustment was done at the beginning of this year, as it was thought in the contracts, and only two are still missing. One is Pacífico 2, that has an internal mechanism within the contract in terms of collection differential, at lower collection in the revenue, that this is suggested in the quarterly report, in an act that is signed by the interventoría. This mechanism was activated since the first quarter this year and has worked with no problems, and the government has paid on time. So there has not been an economic impact on this project. As in Pacífico 2, there are other projects in Colombia, like six or seven, that have these types of mechanisms. And in the Malla Vial del Meta, first thing is that this clears the view, as I mentioned before. These are the projects that benefit the most from this decree because it brings it back to its original scope. In order to think that this will be executed as it is specified in the contract, we would be still missing the Malla Vial del Meta, the part of the compensation through some of the sub-accounts from the lower collection received this year. That is a figure that would be around COP 25 billion, COP 26 billion. It is an important value, but at the end, it is a marginal value in terms of the contract. Jorge Mario, I believe, and Jorge Mario has tried to change or mention all the most relevant elements. We have the expectation that this will be signed at the end of this month, and we will be implementing this according to what we have agreed with the government. We have permanent conversations with the government. Just additional comment, there is a permanent conversation happening with the national government since the beginning of this year that has translated, as you have seen through this year, that the collection differentials have been attended for the eighth year almost in their totality, and right now we are regularizing the situation of the tolls. So once we have signed this, we will remove the uncertainty that we thought that might affect the infrastructure sector. Wanted to add a comment that is not within the question, but I believe it is important to mention anyway. Because in certain circles, there has been concerns that this reestablishment of the EPC with 30.2%, plus the increases that might happen in 2024, might have a relevant effect on inflation. I want to highlight the declarations not just of the finance minister, that we believe that is very responsible, but also the ones from Luis Fernando Mejía, from Fedesarrollo, who estimates that the effect on the inflation and the increase on tolls won't be higher than 0.01% in inflation variation. The cost of transportation within this inflation component does not exceed 10%. I want to make this comment because there are also voices that have said that with this, the inflation pressure will be large. But as Mauricio Ossa says, there is a clear signal in reestablishing the contractual conditions that the industry has, that this is a very positive signal for the investment enthusiasm. Well, thank you. We also have a question for Odinsa coming from Juan Camilo Daud, speaking about airport licitations. Cartagena has been recently delayed. What can you tell us about the rest? Well, about the process, we could not mention anything different from what we have in public information. If I am not wrong, this will go up till the third week of November, where there should be a winner to those that are bidding. Let us remember that the process is a private initiative process. It is led by a consortium that is mainly led by the group that operates Rafael Núñez Airport. In the bidding process, we had two other additional parties, and we are following phases that we usually follow in these types of situations. First, we evaluate the project. You know that we are interested in the region. We believe in a competitive airport at sea level for Colombia, and that is what we have been fighting for, these types of initiatives in the Cartagena Airport. We evaluated this option, and at the end, we decided not to go for it. We are not specifically interested in the airport, but we are interested in development of that region. We have said no because we want to concentrate on the project that we are at right now, because we are entering the final phase this December. We need to deliver all the feasibility study. We are making an adjustment in the evaluation process that might take up to the first quarter next year. But next year, we should be in contract mid, and afterwards, abbreviated selection. We thought this might be detrimental if we would be in both processes. And given that the Bayunca process has been advancing so much, we preferred concentrating ourselves on this. We hope the best for this project. We do believe that Cartagena has a great potential, and that airport might help receiving larger traffic, but we are focused on our project. Thank you. We have another question coming from Juan Uribe. Grupo Argos was buying shares from Cementos Argos. Have you thought in making a similar process with Celsia, bearing in mind that the share prices are under a reasonable price? Yes, I don't know if Rafael Ribeiro wants to help me out with this question. What we are focused on right now in this reacquisition process, live from Celsia, as I mentioned before, we are studying different alternatives for how to lead the process from there. The position that Grupo Argos has in Celsia does not allow us to buy shares without making an open market operation. That at the end is not within our interest. Increase and accelerate the reacquisition processes through the company where Grupo Argos possibly will not participate. This is a similar mechanism that might have the same effect. I know Rafael wants to complement. Yes. Good morning to you all. Effectively, in the case of Celsia, we have a regulation limit that does not allow us to buy shares from Celsia different from Cementos Argos, where we have been going to the market and we have been acquiring shares. It is a regulation consideration that we should observe. Agree. Okay, thank you. Okay, we have another question from Juan Camilo Daud. The government has been announcing the intention of structuring rail and fluvial projects. Would the company be interested in participating in these types of projects? We celebrate that the government is broadening the base of the projects that are being structured in the country. We consider as very relevant for not just economic development, but also for the social development, in order to strengthen public-private initiatives, not just in roads and airports, but also in rail projects and in fluvial projects. In Odinsa, as Mauricio mentioned, we have a project pipeline that is very interesting and that is very important, that goes through two large-scale projects. We have El Dorado Airport, the new Cartagena Airport, private initiatives in Conexión Centro, in Perimetral de la Sabana. We are also committed with the Malla Vial del Meta. We are also committed and fruitfully advancing in the structuring of the second lane for Conexión Oriente, the Túnel de Oriente. In order to complete the second tunnel and all the necessary road in order to have this competitiveness. These initiatives require equity commitments, financing commitments that are very robust, very strong. In this, we have importantly advanced in the structuring and the science of pre-feasibility studies or feasibility studies, depending on the case, investing a large amount of resources, not just economic, but also human resources. That is why we celebrate, and we are permanently monitoring all the initiatives that might arise, not just road and airport, but also rail and fluvial, and we will consider this. I also want to give out a signal of prioritization. The project pipeline that we have is very robust and strong in order to focalize the capital deployment that we have to carry out in this business and project that we firmly believe in. In addition, via X, we have received several questions. Many of these have been answered already in this section, but just let me mention a couple of new ones. We have been asked about the participation that the company wants to have at this combined company between Summit and Argos USA in the infrastructure plan that has been approved by the U.S. government. We have Felipe Aristizábal, and he will be answering this question. Good morning to you all. The infrastructure plan that had been approved by Biden two years ago, this will lead to an increase in demand of around 45 million tons, and we expect that the combined platform will act around a 10%-12% of this incremental demand. We are speaking of a bit less than 5 million tons, that at current market prices, we are speaking of an incremental revenue of $2 billion in a time frame of five, six years. Thank you, Felipe Aristizábal. Besides this, we are being asked if the integration of Argos USA with Summit Materials will be a company that will give out dividends. On that question, I would like to come back to the current state we are at right now. As we announced, we are in the process of getting the regulatory approvals, and we are also waiting for the deal approval from Summit Materials. We are expecting for this to be the first quarter 2024. We want to start getting involved directly in the operation and government in an institutional manner for Summit Materials. In the agreement that we have subscribed, we have the right to name three members of the board in order to participate in that company. In that moment, they will take decisions with the rest of the members of the board with an adequate balance, as we have always done, with a healthy debt and policy, and with a possibility of expansion towards the future in the U.S. It is a country that we deeply believe in, and that could be a great play for us to keep on growing our capital investment, as well as a dividend distribution. I would not like to take a position since now if we will be giving out dividends or not, or what will be the amount of these dividends. Because at the end, this is a decision that gravitates around the board of Summit Materials, and in which there is a series of variables that shall be considered. Thank you. We do not have any additional questions for the moment. If there are no more questions, I would like to close today's call. Thank you for your participation, for your questions, and once again saying that Grupo Argos and our companies are open for anything that you might need, for any clarification that you might require. If you want to go over any detailed analysis, we are here to help you, and thank you for being with us. Thank you very much.